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Purpose: This study aims to examine the effect of foreign direct investment (FDI) inflows on tax revenue in 34 developed and developing countries from 2006 to 2020. Design/methodology/approach: Feasible generalised least squares (FGLS), a dynamic panel of a two-step system generalised method of moments (GMM) system and a pool mean group (PMG) panel autoregressive distributed lag (ARDL) approach were used to compare the developed and developing countries. Basic estimators were used as pre-estimators and diagnostic tests were used to increase robustness. Findings: The FGLS, a two-step system of GMM, PMG–ARDL estimator's results showed that there was a significant negative long and positive short-term in most countries relationship between FDI inflows and tax revenue in developed countries. This study concluded that attracting investments can improve the quality of institutions despite high tax rates, leading to low tax revenue. Meanwhile, there was a significant positive long and negative short-term relationship between FDI inflows and tax revenue in the developing countries. The developing countries sought to attract FDI that could be used to create job opportunities and transfer technology to simultaneously develop infrastructure and impose a tax policy that would achieve high tax revenue. Originality/value: The present study sheds light on the effect of FDI on tax revenue and compares developed and developing countries through the design and implementation of policies to create jobs, transfer technology and attain economic growth in order to assure foreign investors that they would gain continuous high profits from their investments. [ABSTRACT FROM AUTHOR]

Economic integration is an extremely important institutional structure for countries in international trade, which is highly competitive, with the level of globalisation, innovation and communication technology.

Previous work in the literature on regional economic integration has proposed the use of machine learning algorithms to evaluate the composition of customs unions, specifically, to estimate the degree to which customs unions match “natural markets” arising from trade flow data or appear to be driven by other factors such as political considerations. This paper expands upon the static approaches used in previous studies to develop a dynamic framework that allows to evaluate not only the composition of customs unions at a given point in time, but also changes in the composition over time resulting from accessions of new member states. We then apply the dynamic algorithm to evaluate the evolution of the global landscape of customs unions using data on bilateral trade flows of 200 countries from 1958 to 2018. A key finding is that there is considerable variation across different accession rounds of the European Union as to the extent to which these are aligned with the structure of “natural markets,” with some accession rounds following more strongly a commercial logic than others. Similar results are also found for other customs unions in the world, complementing the insights obtained from static analyses. [ABSTRACT FROM AUTHOR]

This paper aims to contribute to the understanding of the digital economy in Southeast Asia (SEA). It evaluates SEA’s digital economy industry from various perspectives, analysing the reasons for its rapid development as a non-core innovation area of the digital economy.

This study investigates the influence of exchange rate fluctuations on the informal economy within the BRICS countries from 2010 to 2019. Employing linear and nonlinear analytical methods, this research utilizes linear autoregressive distributed lag (ARDL) models to analyze the relationship between exchange rate variations and the shadow economy in each BRICS nation. The study consistently reveals significant evidence of the impact of exchange rate fluctuations on the informal economy across both short-term and long-term timeframes. Moreover, employing a nonlinear ARDL model uncovers distinct and uneven effects of exchange rate volatility among the BRICS nations, emphasizing the varied characteristics of currency fluctuations in the clandestine economy. The findings underscore the need for BRICS member states to develop and implement tailored fiscal strategies to mitigate the risks associated with exchange rate volatility. Recognizing these dynamics is crucial for policymakers and stakeholders to effectively address the unequal ramifications of the informal sector within each country. Considering these findings, policymakers must devise economic policies that account for the diverse attributes of each nation’s informal economy. Implementing measures to reduce and manage the impacts of exchange rate fluctuations can foster stability and resilience within the informal sector, ultimately contributing to broader economic development objectives. This study contributes to the existing literature by employing linear and nonlinear methodologies to explore the relationship between currency exchange rates and the informal economy within the BRICS context. The identification of varied impacts across nations underscores the importance of tailored policy responses to address the unique challenges of exchange rate volatility on informal economic activities. [ABSTRACT FROM AUTHOR]

Our study examines the spillover effects that arise from foreign and domestic exporting firms on the export decisions of local manufacturing firms in Vietnam between 2010 and 2018. There are positive horizontal spillover effects from both foreign and domestic exporting firms, while negative spillover effects are detected through the backward channel. Domestic exporting firms are found to generate positive forward spillover effects, whereas foreign direct investment exporting firms have negative forward spillover effects. Moreover, we observe opposite spillover effects from foreign and domestic exporting firms on the export exit of domestic firms, with a negative impact under the horizontal channel and a positive impact under the backward channel. Our research also reveals the effects of firms’ characteristics on the export participation and exit of domestic firms. The study suggests that the Vietnamese government should focus on enabling the FDI sector to create positive spillover effects, attracting foreign firms with export potential as well as supporting domestic exporting firms using and providing local intermediate inputs, and improving the technological and absorptive capabilities of domestic firms. [ABSTRACT FROM AUTHOR]

Cohesion Policy is one of the core policy areas of the European Union and one of the largest expenditure items in its budget. Its impact is the subject of intense academic and policy debate, but its effectiveness is an empirical question still open. This article contributes to this debate by performing a region-specific investigation of the direct and indirect impact of Structural Funds expenditure. We employ a heterogeneous panel data model, which accommodates the spatial dependence in a heterogeneous setting and measures heterogeneous spatial spillover effects, both inward and outward. We also consider different channels of spatial spillovers with respect to standard geographical closeness. In particular, the introduction of new measures of proximity that explicitly consider economic linkages between regions is a novel contribution to the literature. The results clearly indicate that the impact of the Cohesion Policy, while positive overall, is highly heterogeneous and the Structural Funds expenditure generates substantial heterogeneous spatial spillovers: the positive effects do not remain confined to the target regions. Finally, strong spillover effects are channelled by value-added trade connections, particularly in regions belonging to the so-called 'Central European Manufacturing Core'. [ABSTRACT FROM AUTHOR]

This article provides an overview of the macroeconomic challenges facing the 10 countries in the Association of Southeast Asian Nations (ASEAN). It discusses various macroeconomic indicators and the importance of achieving high levels of economic growth. The article also explores ASEAN's participation in Regional Value Chains (RVCs) and Global Value Chains (GVCs), particularly in the automotive and electronics industries. It examines the adoption of inflation targeting frameworks by ASEAN countries and evaluates their macroeconomic performance. The text further analyzes the fiscal sustainability of Indonesia, Malaysia, and Thailand, providing policy recommendations to enhance revenue collection and reduce subsidies. It also discusses the challenges faced by Vietnam's economy and suggests policy measures to overcome them. The article touches on economic issues in Cambodia and Laos, including technology spillovers, Central Bank Digital Currency (CBDC) implementation, and financial system reform. The perspectives presented offer insights into these countries' economic situations and potential policy measures. [Extracted from the article]

This paper examines the macroeconomic and development policies to spur economic integration and growth in the Association of Southeast Asian Nations (ASEAN). It reviews how economic transformation and integration have fueled growth and job creation in the region. ASEAN's increased participation in global and regional value chains, with the People's Republic of China (PRC) as a regional hub, laid the solid foundation of regional production networks. However, with the changing role of the PRC in global value chains, the region needs to renew policy initiatives to address the development challenges and seize new growth opportunities with its single market goals. The analysis suggests the region requires strategic plans for infrastructure development, digitalization, and greater integration reinforced by the removal of trade barriers, increased labor mobility, and foreign direct investment mobilization. The region's successful future also depends on cooperative policy efforts around developing e‐government and digital value chains, strengthening micro‐, small‐ and medium‐sized enterprises and startups, and building smart cities. [ABSTRACT FROM AUTHOR]

Vietnam's long‐term economic growth comparisons with ASEAN nations have been striking since its 1986's economic reforms. Such key factors as economic liberalization, a young population and low‐cost labor, knowledge diffusion, and the manufacturing sector have driven Vietnam's growth. Until 2023, Vietnam has the potential to capitalize on several favorable circumstances, including the diversion of trade and investment from China, the growth of the middle class, and the global digital transformation. Nevertheless, Vietnam's economic growth will confront various obstacles and a declining trajectory that predates the COVID pandemic. To circumvent the risk of falling into the middle‐income trap, this paper proposes "active" economic integration, labor productivity, innovation and research and development, the services sector, and green growth as new growth drivers for Vietnam till 2030. Considering the many policy ideas put forth by the Vietnamese government and the World Bank, this paper presents several distinct recommendations on institution reform and human capital accumulation. [ABSTRACT FROM AUTHOR]

This study analyzes the determinants of intra-ECCAS trade, with special attention paid to the role of institutional quality from 1996 to 2021.

Using a quantitative trade model, this paper evaluates the trade and welfare effects of deep trade agreements in an application to China joining the RCEP and CPTPP. By feeding trade cost shocks from the changes in RTA deepness into the model, we find substantial gains from incorporating legal enforceability and dispute settlement provisions in both agreements. With the CPTPP being deeper than the RCEP, our counterfactual exercise of China joining the CPTPP shows that 69% of its welfare gains come from deepening RCEP provisions to the CPTPP level. For the RCEP members, the gains from deepening non-tariff-related core provisions are quantitatively important. [ABSTRACT FROM AUTHOR]

This study analyzes the integrated effects of the USJTA, USJDTA, and the agreement on minerals for electric vehicle batteries. While most previous studies adopted the perfect competitive Armington model to analyze the economic effect of FTAs, it is unrealistic since monopolistic competition is taking place in export markets. To overcome those gaps, this study introduces the computable general equilibrium framework with monopolistic heterogeneity. The empirical results utilize the GTAP-HET transformed data using seven commodity sectors and seven countries which consist of four developed countries such as US, Japan, Canada and the EU and three developing countries such as China, Mexico, and the ROW. The new finding shows that the changes in industry outputs, domestic industry sales, demand for labor and capital, industry sector price, and terms of trade appeared significantly different according to perfect, monopolistic competition, and firm heterogeneity models. [ABSTRACT FROM AUTHOR]

Purpose: To estimate the volatility of exchange and stock markets and examine its spillover within and across the member countries of BRICS during COVID-19 and the conflict between Russia and Ukraine. Design/methodology/approach: The study utilizes the "dynamic conditional correlation-generalized autoregressive conditional heteroskedasticity (DCC-GARCH)" approach of Gabauer (2020). The volatility of the markets is calculated following the approach of Parkinson (1980). The sample dataset comprises the daily volatility of the stock and exchange markets for 35 months, from November 2019 to September 2022. Findings: The study confirms the existence of contagion effects among member countries. Volatility spillover between exchange and stock markets is low within the country but substantial across borders. Russian contribution increased significantly during the conflict with Ukraine, and other countries also witnessed a surge in the spillover index during the pandemic and war. Research limitations/implications: It adds to the body of literature by emphasizing the necessity of comprehending the economies' behavior and interdependence. Offers insightful information to decision-makers who must be more watchful regarding the financial crisis and its regional spillover. Originality/value: The study is the first to explore the contagion of volatility among the BRICS countries during the two biggest crisis periods of the decade. [ABSTRACT FROM AUTHOR]

We investigate the economic effects of the Russia–Ukraine conflict – following the 2014 annexation of Crimea – on Russian border regions. While southern regions gained market access to Crimea, northern regions lost market access to Ukraine. Using nighttime lights data and geo-referenced plant-level data, we find that regions with deteriorating market access saw 43% less growth in lights – translating into 6–12% lower growth in GDP depending on the assumed lights-GDP elasticity – and a 35% increase in the exit probability for manufacturing plants after 2014. Exploiting variations in closed local border crossings in the northern regions, we find that these effects may be partly driven by less cross-border labour flows. [ABSTRACT FROM AUTHOR]

The literature on the impacts of transport corridors points to a tradeoff between income and environmental quality. We estimate the impacts of India's Golden Quadrilateral and North-South-East-West highways on income and environmental quality to test this tradeoff hypothesis. Applying the difference-in-difference method to district level data, we find that the highways increased both local income and particulate matter air pollution. The estimated increase in air pollution is robust to using an instrumental variables approach, while that in income is not. Examining heterogeneity in these impacts, we find that the income–environment tradeoff was less steep in districts with initially higher educational attainment rates because they experienced a smaller increase in air pollution due to the highways. [ABSTRACT FROM AUTHOR]

In our study from 2000 to 2021, using the CS-ARDL technique, we explored green energy adoption in 15 ASEAN+6 countries. These nations, including Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam, China, Japan, South Korea, Australia, India, and New Zealand, revealed the critical role of good governance in accelerating green energy deployment. Effective regulation and reduced corruption fostered a favorable environment for renewable energy adoption. GDP size acted as a long-term driver but sometimes led to short-term reliance on carbon-intensive sources. Financial development catalyzed the long term, while CO2 emissions posed barriers in the short and long term. Population size slowed short-term deployment, emphasizing the need for energy policy reforms. Foreign Direct Investment (FDI) played a key long-term role, with limited short-term impact. A multifaceted policy approach is crucial for promoting green energy, including transparent regulation, anti-corruption measures, incentives, environmental regulations, attractive investment climates, green job creation, and sustainable financial development. [ABSTRACT FROM AUTHOR]

This study employs OECD panel data from 2005 to 2021 and utilizes the CS-ARDL (Cross-sectionally Augmented Autoregressive Distributed Lag) method to reveal a notable positive correlation between the Human Development Index (HDI) and pension income levels. A 1% increase in HDI corresponds to approximately 0.6% and 0.7% increases in short- and long-term pension income. Additionally, green energy deployment positively influences pensions, with a 1% increase leading to about 0.09% and 0.17% increases in the short and long term, respectively. Economic size (GDP) demonstrates a robust positive relationship, and ICT development significantly impacts pension income levels. Policymakers are advised to prioritize local green power generation, sustainable pension funds, and green loans to enhance the welfare of aging populations in OECD countries. [ABSTRACT FROM AUTHOR]

This research examines economic integration within the RCEP subset of 13 countries from 2000 to 2020, focusing on the impact of green energy and digital currency adoption. A 1% increase in sustainable energy deployment yields significant short-term (0.01%) and long-term (0.05%) improvements; while, a 1% rise in electronic banking transactions results in substantial short-term (0.19%) and long-term (0.26%) enhancements. A 1% GDP increase leads to notable short-term (0.32%) and long-term (0.59%) improvements, emphasizing economic strength’s importance. Improved internet access (1% increase) contributes to short-term (0.09%) and long-term (0.10%) economic integration. Conversely, a 1% increase in economic risk corresponds to a significant long-term reduction (0.33%) in economic integration. The research suggests crucial policy implications, emphasizing prioritizing green power generation, strengthening digital infrastructure, and promoting eco-friendly blockchain technologies for sustainable economic integration. [ABSTRACT FROM AUTHOR]

This study employs the CS-ARDL estimator to model the adoption of renewable energy within BRICS nations spanning the period from 1995 to 2021. The key findings reveal that a 1% increase in foreign direct investment (FDI) has a negative impact on green consumption, with approximately a 0.21% decline in the short-term and a 0.48% decrease in the long-term. Furthermore, a 1% increase in GDP leads to a reduction of 0.04% in short-term and 0.12% in long-term green consumption. On a positive note, an augmentation in environmental tax revenues exerts a favorable influence on green consumption, with an increase of about 0.17% in the short-term and 0.20% in the long-term. The presence of a larger green financial market significantly accelerates green consumption. Policy implications encompass strategies such as attracting green FDI, financing environmentally friendly projects, developing digital green financial markets, and expanding trade networks for green utilities with other nations. [ABSTRACT FROM AUTHOR]

Can temporary trade restrictions reshape regional development? To analyze this, we exploit the Cote d'Ivoire civil war that disrupted access to Abidjan port for neighboring land-locked countries: Mali and Burkina Faso. Estimates from a difference-in-difference design suggest negative effects on economic activity and a reverse structural change in the treatment communes. We find evidence of persistence through irreversible investment in built-up areas and divergence in the growth of nightlights. Treatment communes at the intermediate distance from the nearest city experienced stronger adverse impacts, driven partly by a relocation to the communes close to other ports. [ABSTRACT FROM AUTHOR]

The majority of previous studies have asserted that the high quality of local institutions can improve the productivity effects of trade policies; yet, only a few studies have acknowledged the heterogeneous impact of these institutions. Using data from Chinese manufacturing plants, we examine the moderating effects of regional-level regulations on the effectiveness of national services trade policy. The key findings are threefold: First, as the initial degree of service liberalization advances, the productivity effect of trade liberalization diminishes. Second, opening access to foreign enterprises can substitute for pro-competitive regulatory reform. Regardless of whether the regulatory institutions related to administrative processes, law enforcement, and commercial service have improved, services trade liberalization can have significant productivity effects. Third, in contrast, when regulations to protect for local incumbents impose prohibitive costs for new entrants, the impact of services trade liberalization is highly contingent on local regulatory improvement. The confirmation that trade liberalization can potentially serve as an alternative measure for local regulation reform in Chinese context distinguishes this study from others.

This study applies Keynesian macroeconomic theory in the ARDL model to compare the growth effects of the US's AGOA and China's FOCAC multilateral trading systems in South Africa from the first quarter of 2001 to the fourth quarter of 2022. The study uses South Africa's net exports with the corresponding partner as a proxy for each multilateral trading system. This quantification stems from the fact that South Africa's trade with the US and China has significantly improved since the establishment of AGOA and FOCAC in 2000. Our findings show that none of the multilateral trading systems contribute significantly to South Africa's economic growth. Rather, they appear to be used as strategic initiatives to gain access to mineral resources and facilitate the movement of mining machinery and other inputs into South Africa. To some extent, they are used as market-seeking initiatives, particularly FOCAC. It is worth noting, however, that the mineral resource preferences of these systems vary: while China prioritizes mineral products, the US prioritizes precious metals. This suggests that China and the US scramble for natural resources in South Africa, and possibly Africa in general, is complementary rather than competitive.

This study re-evaluates the determinants of international trade in the global south, focusing on intra- and extra-SSA trade while considering financial development and institutional quality as additional predictors. It also examines whether these factors differ for south-south and north–south trade ties. We used a 22-years (ranging from 2000 to 2021) panel of 98 countries (41 from the SSA and the remaining from the ROW). A panel gravity model with Poisson pseudo-maximum likelihood (PPML) estimation is used for the analysis. The results show that financial development in origin and destination countries boosts intra-trade in SSA countries, and the developed financial sector of the destination countries contributes to both intra-bloc and international trade. Financial development of exporting countries also spurs intra-bloc trade in SSA countries and the global south. In addition, apart from common expectations, the institutional quality of exporting countries plays a deterrent role, while the institutional quality of destination countries plays a positive and significant role in trade in the global south. We identified the interaction term for financial development and institutional quality of the exporting countries with a significant and positive coefficient for the global south and the global north, and null for intra-SSA trade. For destination countries, it becomes significantly positive with SSA and the global south but negative with the global north. The findings suggest that as part of the policy measures to boost intra-bloc trade in SSA and the global south, ensuring financial development needs better emphasis.