Search

The aim of this article is to analyse empirically whether the level of institutional quality influences how financial development affects poverty for a sample of developing countries covering the period from 1984 to 2012. Using an interaction term constructed as a product between financial development and institutional quality we find that the pro-poor impact of financial development decreases as the quality of institutions rises. Such a differential effect can be ascribed to the capacity of banks to provide functions that mimic those performed by an institutional framework that works well. The results of this article can be used for policy management. [ABSTRACT FROM AUTHOR]

The determinants of non-life insurance expenditure in a panel data set covering 36 developed countries and 31 developing countries for the period 2000–2011 are analysed. Results of our instrumental variable analysis indicate that economic freedom, income, bank development, urbanization, culture and law systems are the key drivers of the non-life insurance expenditure across countries. However, their impacts differ significantly between the groups of developed and developing countries, suggesting that the heterogeneity among countries in terms of the level of development plays an important role. The global financial crisis is also found to influence the direction of those effects, especially in developed countries. The article yields useful policy and economic implications for governments and multinational non-life insurance companies with regard to the development of the non-life insurance sector, an important engine for economic growth and prosperity. [ABSTRACT FROM AUTHOR]

Despite both being developing countries, China and India have markedly contrasting patterns in their use and targeting of antidumping (AD) measures. We explore the factors driving AD use by these two countries, considering in turn macroeconomic, strategic and other determinants. We find more regular or systematic features of AD use by China, while India displays a less systematic pattern of AD use. Economic growth, AD club effect and free trade agreement participation are shown to constrain AD use by China. Compared to India, AD use by China is also more sensitive across industries. Furthermore, China targets developed countries more than developing countries, while India is less discriminating with respect to the country type it targets. [ABSTRACT FROM AUTHOR]

This article extends the meta-analysis presented in Knell and Stix (2005, 2006) to investigate the possible sources of variations in empirical findings about the income elasticity of money demand in advanced and developing countries. In the case of advanced countries, we find that the income elasticities of money demand are significantly higher if broader definitions of the monetary aggregates are used. In addition, financial reforms and wealth seem to have significantly reduced the estimates of the income elasticity. However, we achieved quite different findings for the developing countries. It appears that the broader definitions of monetary aggregates seem to produce income elasticity estimates that are only marginally higher than the narrower aggregates. While the wealth (financial reform) impacts on income elasticity are statistically insignificant (weakly significant), both seems to have reduced the income elasticity estimates only marginally. Moreover, some contrasting results between advanced and developing countries are also attained with respect to the proxies of cost of holding money. [ABSTRACT FROM PUBLISHER]

This article explores two questions. First, do preferential trade agreements (PTAs) affect manufactured goods exports of developing countries? Second, does it matter for developing countries whom they sign the PTAs with? We find that the answer to both questions is yes. Using bilateral manufactured goods exports data from 28 developing countries during 1978–2005; we find that South–South PTAs have a significantly positive effect on manufactured goods exports. In contrast, no such effect is detected in the case of South–North PTAs. We confirmed the robustness of these findings to estimation methodology, sample selection, time period, zero trade flows and multilateral trade resistance. [ABSTRACT FROM AUTHOR]

We examine the determinants of capital flows to four developing countries during the 1990s using an explicitly disequilibrium econometric framework in which the supply and demand for capital are not necessarily equal and the actual amount of the flow is determined by the ‘short side’ of the market. We are thus able to detect instances of ‘international capital crunch’ – where capital flows are curtailed because of supply-side rationing – and to relate these instances to movements in the underlying fundamentals. The analysis highlights the role of asymmetric information – as distinct from the traditional concern with default risk – in conditioning capital flows. [ABSTRACT FROM PUBLISHER]

This study tests and compares the two major approaches to the modelling of human capital in growth regressions, i.e. the Lucas and the Nelson-Phelps approach, in the context of developing country models with international knowledge spillovers. On balance, the results seem to favour the Nelson-Phelps approach. Using human capital stock variables instead of flow variables, a positive role for human capital in the absorption of international knowledge spillovers other than embodied R&D spillovers is confirmed. The results suggest the importance of distinguishing between different types of international knowledge spillovers, as well as between different human capital sub-categories. [ABSTRACT FROM AUTHOR]

This study seeks to analyse the relationship between exports and growth for 19 less-developed countries. It utilizes multivariate causality analysis based on the error correction model to address several important hypotheses. The results indicate that when exports have a causal influence in the development process that in general this is the result of their effect on both efficiency and accumulation. In addition, improvements in output and capital accumulation in an economy seem to have just as much of an influence on exports as exports have on output and capital accumulation. Finally, the growth process in East Asia seems to be quite different from that in Southeast Asia. [ABSTRACT FROM AUTHOR]

Presents information on a study which assessed the effects of export earnings instability on the economic performance of developing countries which signed the Lome Convention. Impact of STABEX on the economic growth of developing countries; Reasons for the failure of STABEX; Methodology; Findings; Conclusions.

This paper explores the economic determinants of privatization programmes and the macroeconomic impact of this institutional reform on the growth rate of the GDP. A sample of thirty five developing market economies is considered over the 1988-92 period. Probit and Tobit models are used to identify the determinants of successful privatization programmes. Then regressions are run where probabilities (Probit) and expected values (Tobit) are successively included as additional regressors beside the potential influence of other economic policy variables. A significant positive effect is highlighted, giving evidence of the importance of divestiture. The economic effect is found to be stronger when this institutional reform took place in industry or infrastructure. [ABSTRACT FROM AUTHOR]

`This paper examines the export performance of the four Asian newly industrialized economies (NIEs) by modelling their bilateral export flows to three main OECD blocks: the USA, Japan, and the European Community. Our estimated export demand models reveal interesting asymmetries between these three areas of destination which do not emerge from previous aggregate empirical studies of NIE export performance. [ABSTRACT FROM AUTHOR]

This study investigates the prima facie causal relationship between the exports and output growth in 30 developing countries over the period from 1960 to 1988 in a multivariate framework. The information set considered for the output and exports models are Ω=(domestic output, exports, labor and capital), and Ω=(exports, domestic output, exchange rate and foreign output) respectively. This study identities a feedback prima facie causal relationship between exports and output growth in five countries, export growth prima facie causes output growth in another six countries; output growth prima facie causes export growth in a further eight countries; and no causal relationship was observed between export growth and output growth in the remaining 11 countries. We also found that in 15 countries the foreign exchange rate prima facie caused export growth, and that in 12 countries world output caused export growth. [ABSTRACT FROM AUTHOR]

This paper explores aggregate consumption behaviour in four developing countries under the assumption that consumers' planning horizons do not extend over their expected lifetime Under certain conditions, the resulting 'moving planning horizon model' suggests that changes in current income would exert considerably more influence over current consumer spending than is predicted by forward-looking theories of consumption which typically assume that consumers' planning horizons coincide with expected lifetime Estimation of the model for the group of developing countries provides empirical support for the role of changes in current income in influencing the consumption process The results also reveal that consumers are relatively short-sighted since the length of the planning period of consumers ranges from just over ten months An important implication of these findings is that policy measures can be effective not only if they influence consumers' permanent incomes but also if they affect changes in current income [ABSTRACT FROM AUTHOR]

New growth theory has emphasized the role of human capital and economies of scale in promoting sustained growth. This paper discusses the sources of rapid growth in Asian newly industrializing countries (NICs) in recent times by applying some econometric tests of new growth theory. The Korean economy is considered as an example of the successful NICs in Asia, where three types of empirical tests are applied based on the modern theory of cointegration, the dominal role of demand and the existence of significant scale economies due to human capital. The empirical growth profile of Korea in recent times seems to vindicate the broad tenets of the new growth theory. [ABSTRACT FROM AUTHOR]

Drawing on the relevant literature on the link between economic growth and external debt accumulation of less developed countries (LDCs), this study seeks to identify the variables leading countries to experience debt servicing difficulties. Discriminant analysis was used to distinguish between the rescheduling and non-rescheduling countries. The available data are the values of financial ratios for 75 LDCs in 1988. The common log and sin transformation were applied to the ratios, resulting in variables that satisfied the discriminant function model. Ten variables representing debt burden, foreign exchange position and domestic economy situation were found significant in exploring the rescheduling decision. The model can be useful for both the financial institutions and the borrowing countries. [ABSTRACT FROM AUTHOR]

This paper examines the economic rationale of the EC's aid policy towards the LDCs. A multiple linear regression is conducted on the EC's flows of aid to 62 LDCs during the 1975-80 period, using two alternative models, one trying to explain the EC's pattern of geographical allocation of aid using variables that assess the needs of the recipients and another using variables that assess the interests of the EC. The results show that the EC multilateral aid to the LDCs is more motivated by the needs of the recipients in terms of their current account balance of payments and their state of basic human needs as these are assessed by the Physical Quality of Life Index (PQLI). An important consideration, however, is also given to Community export interests and to a tendency not to allocate aid to security-sensitive countries. It is also demonstrated that in the second half of the 1970s an emphasis persisted on francophone LDCs. By comparison, bilateral aid distributed by the EC member states has been motivated to a greater extent by their export interests although balance-of-payments considerations continue to be important. The overall profile of European aid allocation (EC multilateral and member states' bilateral) is more affected by the determinants of the latter, as the sums involved are much greater. [ABSTRACT FROM AUTHOR]

This paper, following Bruno's (1979) eclectic approach, has developed a macroeconomic model which provides a framework for the analysis of stabilization policies in LDCs. The price and output adjustment equations derived from the model are estimated for ten LDCs. The empirical analysis has used annual data during 1974 and I983. The results obtained using the random. [ABSTRACT FROM AUTHOR]

In this paper a two-period model of the wealth effect of foreign capital flows on domestic investment in LDCs is developed. It is shown that the link between foreign capital flows and increases in domestic consumption is conditional on the productivity of the capital flow, repayment conditions and complementarity with domestic investment. Generalizations are made regarding the relative productivity and repayment terms of such broad categories of capital flows as unrequited transfers, direct investments and long-term flows to governments. The impact of variations in the terms on which foreign capital is received is related to the 'wealth effect' of the capital. The model is tested with pooled cross-section data for seventy countries in 1976 and 1977. Data limitations permit estimation of the effect of foreign finance on domestic investment only up to a monotonic transformation of the true values. Nevertheless, the hypothesized role of the wealth effect of the major categories of external finance can be tested. The results show that different types of foreign capital flows have differential impacts on investment as suggested by the model. [ABSTRACT FROM AUTHOR]