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This study investigates whether capital account liberalization, a leading characteristic of globalization, is associated with firms' future innovation output. Employing a novel firm-level panel data set covering 41 countries over two decades, we show that capital account liberalization is significantly associated with higher corporate patenting activities, particularly for firms from innovation-intensive industries. Further analyses show that the effect is stronger among firms from economies in a better legal environment, signifying the important role of good institutional quality in facilitating the positive impact of liberalization. The effect is also stronger among firms with higher initial productivity, consistent with the "productivity" hypothesis, according to which bigger and more productive firms generate more innovation after liberalization. Our findings are robust to the use of various measurements, subsamples, and estimation models. This study provides global firm-level evidence of the real economic impact of financial globalization. [ABSTRACT FROM AUTHOR]

This study investigates the connections among institutional quality (IQ), globalization, technological innovation, and environmental sustainability in China, using time‐series data from 1995 to 2022. The autoregressive distributive lag model (ARDL) and Granger causality, stability, and diagnostics approaches were employed for rigorous data analysis. Results of the ARDL test reveal that IQ and technological innovation have a negative and significant impact on carbon dioxide (CO2) emissions in the long run. In the short run, globalization has an insignificant impact on CO2 emissions; on the other hand, IQ, technological innovation, foreign direct investment, and economic growth significantly affect CO2 emissions in China. The result of Granger causality also confirmed unidirectional causality running from globalization, technological innovation, and IQ toward CO2 emissions. Furthermore, the NARDL analyses supported this research's findings. The study suggests that implementing effective environmental regulations, improving governance, and promoting transparency and accountability can enhance the enforcement of environmental policies. Although allowing the limited short‐term impact of globalization, planned global engagement associated with ecological goals is also recommended. Furthermore, policy recommendations include investing in research and development of green technologies, incentivizing companies to adopt eco‐friendly practices, and supporting startups focused on environmental solutions, which can drive positive change toward environmental sustainability in China. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to explore the extent to which Chinese multinational enterprises (MNEs) rely on supranational institution – the Belt and Road Initiative (BRI) – versus host country institutional quality to navigate their foreign location choice. Design/methodology/approach: This study uses a conditional logit regression model using a sample of 1,302 greenfield investments by Chinese MNEs in 54 BRI participating countries during the period 2011–2018. Findings: The results indicate that as a supranational institution, the BRI serves as a substitution mechanism to address the deficiencies in institutional quality in BRI participating countries, thereby attracting Chinese MNEs to invest in those countries. In addition, the BRI's substitution effect on host country institutional quality is more pronounced for large MNEs, MNEs in the manufacturing industry and MNEs in inland regions. Originality/value: This study expands the understanding of the BRI as a supranational institution for MNEs from emerging markets and reveals its substitution effect on the host country institutional quality. Furthermore, it highlights that MNEs with diverse characteristics gain varying degrees of benefits from the BRI. [ABSTRACT FROM AUTHOR]

This study inspects the health consequences of greenhouse gases, energy use, institutional quality and globalization for the 23 developing economies. Utilizing panel data from 2000 to 2022, various estimation techniques, including static models (pooled, fixed and random), the two‐step systemGeneralized Methods of Moments (GMM and Panel Auto Regressive Distributive Model (PARDL), are applied to investigate the short‐ and long‐term effects of greenhouse gases, energy use, institutional quality and globalization on health. Panel causality tests, Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) are employed to ensure robustness and causal linkage among variables. The results confirmed a positive association between health and its lag value. Institutional quality negatively influences health expenditure, while greenhouse gases, energy use and globalization exhibit an increasing effect on health expenditure. Life expectancy, institutional quality, energy use and globalization have favourable effects, while greenhouse gases negatively affect health outcomes. In Model 1, energy usage and health expenditures have two‐way causality, and green house gases and energy use in Model 2 have a bi‐directional causal linkage. All variables exhibit unidirectional causality, except globalization and institutional quality, as shown by the Dumitrescu and Hurlin causality test. The study complements the literature by stating that institutional quality is the key instrument for managing the negative consequences of the recent increase in globalization and energy use and their detrimental impact on health in developing economies. [ABSTRACT FROM AUTHOR]

This study aims to identify the influence of global governance on the sustainability performance of countries. The methodological approach is quantitative, employing descriptive and inferential statistics with multiple regression analysis for a sample of 127 countries. The independent variable corresponds to the governance measured by the world governance indicators. The dependent variables are measurements of sustainability performance, including the SDG Index Score, the Environmental Performance Index, the Human Development Index, and Gross Domestic Product per capita. The main results indicate that the governance indicators Voice and Accountability and Government Effectiveness positively affect the overall sustainability performance of countries. In environmental sustainability, the influence of the voice and responsibility and regulatory quality indicators was identified, while in the social and economic dimensions a positive influence of governmental effectiveness and regulatory quality was observed. On the other hand, the corruption control variable exerts a negative influence on general and social sustainability. In general, it can be concluded that the institutional quality of a country influences the government's ability to achieve sustainable development goals and targets, in addition to attaining favorable results in the environmental, social, and economic dimensions of sustainability. [ABSTRACT FROM AUTHOR]

Economic policy uncertainty significantly influences governmental decisions regarding environmental sustainability, particularly in CO2 emissions reduction efforts. This study examines the impact of economic policy uncertainty on environmental inefficiency across 136 emergent and non‐emerging countries from 1990 to 2018, using an unbalanced and heterogeneous sample. Additionally, we explore the moderating effects of institutional quality and political orientation on this relationship. Employing a directional distance function in a parametric context, our analysis reveals that economic policy uncertainty exacerbates environmental inefficiency. However, we find that institutional quality and political orientation act as important moderating factors, fostering greater environmental sustainability. Sensitivity analyses support these empirical findings, providing insights into potential implications for economic policy and guiding regulatory and policymaking efforts toward achieving enhanced environmental sustainability. [ABSTRACT FROM AUTHOR]

Purpose: The objective of this paper is to investigate the impact of institutional quality, foreign direct investment (FDI) inflows and human capital development on Indonesia's poverty rate. Design/methodology/approach: The quantile regression on data ranging from 1984 to 2019 was used to capture the relationship between the impact of the independent variables (FDI inflows, institutional quality and human capital development) on Indonesia's poverty rate at different quantiles of the conditional distribution. Findings: The empirical results reveal that low-quantile institutional quality is detrimental to poverty eradication, whereas FDI inflows and human capital development are significant at higher quantiles of distribution. This implies that higher-value FDI and advanced human capital development are critical to lifting Indonesians out of poverty. Practical implications: Policymakers should prioritise strategies that advance human capital development, create an enticing investment climate that attracts high-value investments and improve institutional quality levels. Originality/value: This study contributes to the existing literature because, compared to previous studies that focussed on estimating the conditional mean of the explanatory variable on the poverty rate. It rather provides a more comprehensive understanding of the quantiles of interest of FDI inflows and institutional quality on the Indonesian poverty rate, allowing for more targeted policies. Peer review: The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-09-2023-0733 [ABSTRACT FROM AUTHOR]

This is the first study to investigate whether country institutional quality influences the impact of supervisory power on insurer soundness. It tests the hypothesis arguing that institutional quality enhances the implementation capacity of supervisors versus the one that maintains that institutional quality mitigates the impact of supervisory power on insurer soundness, particularly when this effect is negative. An analysis is carried out on firms operating in the insurance markets of 12 Muslim-populous countries over the eight-year sample period 2009–2016. As a proxy of insurers' financial stability, we use the Z-score and conduct the study by employing the two-step system generalised method of moments. We find a negative impact of supervisory power on insurer soundness—exercised by increasing portfolio risk—that is mitigated by national institutional quality, in particular by government effectiveness, regulatory quality and control of corruption. The findings emphasise the view that national institutional quality avoids private use of supervision. [ABSTRACT FROM AUTHOR]

The main goal of this article is to analyse the effects of external debt accumulation on economic growth amongst Central Asian countries. We have applied a time-series methodology utilising annual data from 2000–2017 to show that external debt has had a negative and significant effect on economic growth in Central Asian countries. We found that debt overhang will cause a higher marginal tax rate on the future output of each country, thus leading to an investment slowdown and reducing output growth by limiting productivity expansion. Moreover, we can affirm that the negative effect of external debt is often associated with the poor level of institutions and governance of Central Asian countries. [ABSTRACT FROM AUTHOR]

This study investigates the impact of financial development (FD) and green investments (GIs) on environmental pollution in Eastern and Southern African countries from 1990 to 2020. The research not only investigates the direct impacts of FD and green finance on environmental pollution but also examines the moderating role of institutional quality (IQ) and possible nonlinear effects of FD and green finance. Our analysis from the Panel autoregressive distributed lag (ARDL) long‐run PMG reveals a negative association between FD, green investment, and environmental pollution, indicating that a well‐developed financial sector supports sustainable initiatives, leading to improved environmental outcomes. IQ moderates this relationship, with strong governance enhancing the positive effects of FD and green finance on environmental preservation. Interestingly, the study identifies nonlinear impacts, suggesting that beyond a certain threshold, the contributions of FD and GIs to environmental preservation may diminish. Recognizing these nonlinearities and the role of IQ can inform more targeted policies for maximizing efforts toward environmental conservation in African economies. [ABSTRACT FROM AUTHOR]

Background: Dietary habits are pivotal for population health and well-being, yet remain a pressing global issue, particularly in Sub-Saharan Africa (SSA), where economic instability and institutional challenges exacerbate dietary problems. Despite extensive research, there is a notable gap in the literature regarding the direct and interactive effects of institutional quality and inflationary shocks on dietary habits. Methods: This study delves into these complex interplays across 44 SSA nations from 2002 to 2022. Employing an innovative entropy method (EM) and the generalized autoregressive conditional heteroskedasticity (GARCH) modeling, the study introduces an inclusive institutional quality index and an inflationary shock predictor as crucial determinants of dietary habits in the literature. Results: The results from the panel-corrected standard error (PCSE) method and feasible generalized least squares (FGLS) model reveal that per capita GDP, school enrollment rate, government expenditures, globalization index, and urbanization are positively associated with population dietary habits, while inflationary shock, food insecurity, and unemployment rate exert negative influences. Notably, institutional quality acts as a catalyst, amplifying the positive effects of the former group and absorbing the negative impacts of the latter on population dietary habits. Additionally, a dynamic panel causality analysis confirms a bidirectional causality nexus between population dietary habits and all variables, except for inflationary shocks, which demonstrate a unidirectional causality link. Conclusions: These findings carry significant policy implications, underscoring the complex dynamics between institutional quality, inflationary shocks, and dietary habits in the region. The bidirectional causality highlights the need for holistic interventions that address economic, social, and institutional factors simultaneously. Moreover, the unidirectional causality of inflationary shocks on dietary habits suggests that stabilizing inflation is critical to protecting dietary habits. These results provide critical insights for policymakers to design targeted interventions aimed at improving nutrition, bolstering institutional frameworks, and ensuring public health resilience in the face of economic and social shocks. [ABSTRACT FROM AUTHOR]

Africa began implementing the Sustainable Development Goals (SDGs) in 2015 emphasizing on sustainable management and effective use of natural capital to spur economic growth (Goals 12, 14, and 15). This study using World Bank data sets from 46 African countries selected for the years 2000 to 2022, examined the nexus between natural resource endowments and economic growth in Africa. We used the system generalized method of moments (sys-GMM) and dynamic panel threshold regression (DPTR) to analyze the data. The findings of the two-step sys-GMM estimation using 'xtabond2' revealed that when the institutional quality variable is added and excluded from the model, natural resource dependence negatively impacts economic growth, but the impact is greater when the institution is excluded. In the estimation of the interaction variable of natural resource dependence and institutional variable included in the model, natural resource dependence positively impacts economic growth. The results of the DPTR using "xthenreg" showed that when the threshold value of natural resource dependence is ≤ 1.73% of gross domestic product, natural resource dependence has a positive impact on economic growth and a negative impact when the threshold value is above 1.73%. Similarly, when the institutional quality threshold is ≤ 0.277, natural resources dependence impacts economic growth negatively; above the threshold (0.277), the impact is positive. In conclusion, natural resource endowment is a curse with no or low-quality institutions and a blessing with high-quality institutions. Thus, building strong institutions and proper utilization of natural resources helps to minimize the adverse impact of resource endowments on economic growth. [ABSTRACT FROM AUTHOR]

The present study attempts to examine the link between trade openness and sustainable human development (SHD) in 19 emerging economies. The study used the data for the period from 1996 to 2019. The study employed fixed-effect regression with Driscoll–Kraay standard error techniques robust to cross-section dependence. The study found the favorable impact of trade openness on sustainable development through sustainable human development. Trade openness affects sustainable human growth in many ways. It is a critical component that should not be ignored in sustainable development policies. Moreover, foreign direct investment, economic growth, and renewable energy consumption positively impact the sustainable human development. In contrast, innovations and institutional quality have an adverse impact on SHD. The study also provides policy suggestions for the emerging economies that will promote all the dimensions of sustainable development: economic, social, and environmental. [ABSTRACT FROM AUTHOR]

This article aims to examine the relationship between governance and economic growth in the MENA region (Algeria, Bahrain, Egypt, Iran, Iraq, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, Turkey and the United Arab Emirates) over the period 2002-2019. Two main questions have been defined that this research is supposed to answer. The first focuses on institutional quality in the MENA region and its position towards the countries of the region. The second examines statistically the effect of each aspect of the governance dimension on economic growth. We use an econometric model to find the indicators that have the most impact. An in-depth analysis will be carried out in the MENA countries. Based on the empirical results as well as the theoretical literature, concrete recommendations will be provided. [ABSTRACT FROM AUTHOR]

With the widening saving-investment gap and the limited domestic financial resources to drive development imperatives in Sub-Saharan Africa (SSA), foreign direct investment (FDI) is considered a viable and sustainably promising option for boosting employment generation and closing gender gaps in employment. This paper provides critical insights into the gender and age-based employment effect of FDI in SSA and the role of institutional quality in shaping the relationship. The two-step generalized method of moments modelling framework was adopted to analyse relevant data of 29 SSA countries over the 2000-2021 period. The results revealed that FDI has a significant employment-enhancing effect irrespective of gender and age considerations. We also find that institutional quality amplifies this effect. Efforts should, therefore, be concentrated on improving institutional quality, the success of which will appeal to foreign investors and attract more foreign investments. [ABSTRACT FROM AUTHOR]

This study investigates whether institutional quality influences the adoption of Central Bank Digital Currencies (CBDC). To address this question, data from 85 countries spanning from 2013 to 2021 was analysed. This study employs logistic, probit, and ordinary least squares regressions to assess the impact of the independent variables. The results indicate that institutional quality significantly affects CBDC adoption, with higher institutional quality associated with a greater likelihood of adoption. An in-depth analysis reveals that 'voice and accountability' is the most critical factor within the institutional indices that significantly explains CBDC adoption. A higher value for 'voice and accountability' correlates positively with a higher probability of CBDC adoption. The findings of this study hold important implications for researchers, analysts, and policymakers. [ABSTRACT FROM AUTHOR]

Institutional quality and good governance are considered important in attracting foreign direct investment (FDI) to determine the role of the institutional quality and governance as an incentive for FDI inflow. It is arbitrary to link institutions and economic growth as attractive indicators of FDI inflow in different countries. This study uses a two-step system GMM model and examines the impact of institutional quality on FDI in the global panel, developed, developing, and Asian countries from 2002 to 2019. The results suggest that only regulatory quality significantly increases FDI inflow while other institutional indicators along the institutional quality index are negatively associated with FDI inflow in the global panel. In case of developed countries, control of corruption and regulatory quality negatively affect FDI inflow while all other indicators have no effect on FDI inflow. In case of developing countries, control of corruption, political stability, and voice and accountability significantly attract FDI inflow, while government effectiveness, regulatory quality, political system, and institutional quality index significantly reduce FDI inflow. In case of Asian countries, all institutional quality indicators have a significant and positive effect on FDI inflows, except the control of corruption, which reduces FDI inflow. The results of this study have significant policy implications for the countries in the sample in the context of institutional quality indicators and FDI inflow. [ABSTRACT FROM AUTHOR]

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Effective government rules and regulations, as well as the ability of the regulator to curb corruption and promote voice and accountability, can influence the ability of bank management to allocate resources and ensure high performance. Based on this assumption, we aim to find out whether institutional quality is able to improve bank performance in Italy. To do so, we rely mainly on the diversity of banks, thus capturing the different behaviors of the two main categories, i.e. cooperative and for‐profit banks. Using a parametric method, the results show a clear impact of most dimensions of institutional quality on reducing banks' cost inefficiency. Some robustness checks, especially regarding the role of market structure, confirm our findings. [ABSTRACT FROM AUTHOR]

This paper assesses the National Recovery and Resilience Plans (NRRPs) of EU member states and regions to uncover commonalities and differences between green and digital transitions, focusing on the role of institutions, among additional socio‐economic drivers, in modeling them. To that end, relevant indicators have been assembled, and several econometric models have been developed and tested to evaluate institutional performance in relation to green and digital transformations. The study reveals discrepancies in the two explored transition fields and highlights the power of institutional factors in boosting them. Specifically, the findings demonstrate that the green transition in EU regions is positively associated with variables such as life expectancy, institutional quality, tertiary education attainment, and small and medium enterprises (SMEs) with innovative activities, while the fruits of digitalization are mainly allied to population with higher studies, core creative class employment, accountability of institutions, and innovative SMEs. These insights offer valuable guidance for decision‐makers to draw lessons from high‐performing or successful regions and strategically assign resources. This includes paying attention to regional financial allocations and their alignment with territorial planning and long‐term policies. [ABSTRACT FROM AUTHOR]

This study focuses on tax evasion within the framework of earmarking taxation, specifically focusing on the evasion of car ownership taxes. We utilize a unique and extensive micro-database that combines information on regular payments of the tax due, late payments following friendly warnings, and non-payment of vehicle ownership taxes, integrated with fiscal data, individual data, and municipal-level data. The empirical analysis examines individual, socio-economic, and institutional factors related to this issue. Drawing a rich dataset from the 2014 Tuscany car tax, we employ a multilevel logistic model for our empirical investigation. Our findings reveal that tax evasion poses an equity problem, as the inclination to evade vehicle ownership taxes is concentrated among specific demographic categories and types of vehicles. We also suggest that regional-level policies, such as friendly warnings, could be more effective if implemented with greater rigour. Lastly, our results indicate that reinforcing civic responsibility and enhancing institutional and political quality could prove particularly beneficial in enhancing tax compliance. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to provide an empirical investigation into rising capital flight and the role of institutional quality to mitigate its effect on the real sector in sub-Saharan Africa (SSA). Design/methodology/approach: The study uses the system generalized method of moments and uses data spanning from 1989 to 2020 from 26 SSA countries. Findings: The findings show that capital flight has no direct impact on the real sector while institutional quality adversely impacted the agricultural and industrial sectors. The study also found that institutional quality is unable to mitigate the effect of capital flight on the industrial sector. Originality/value: This study investigates if institutional quality mitigates the impact of capital flight on the real sector proxied by industrial value-added and agriculture value-added. [ABSTRACT FROM AUTHOR]

Purpose – The paper assesses the role of natural resource rents in Nigeria's economy through the channel of institutional quality. Design/methodology/approach – The analysis is done with the use of autoregressive-distributed lag (ARDL) bounds testing approach to cointegration, vector error correction model (VECM), Granger causality test and cointegrating regression over the period 1996–2019. Findings – Findings support the notion that overreliance on natural resources could exacerbate the growing number of dysfunctional economic outcomes in the country. The study confirms that a mix of weak governance quality and natural resource rents could have a negligible effect on economic growth and possible retardation impact on the economy in the long run as well as in the short run. The evidence further reveals that there is unidirectional causality running from the interaction term to growth, suggesting that growth trajectory could be jointly determined by natural resource rents and the quality of institutions. Originality/value – The divergent arguments associated with the mechanisms of resource curse in each of the resource-rich countries offer ample support for the contention that economic outcomes in resource-abundant states may not be a product of resource windfalls per se, but rather the quality of governance or ownership structure. Hence, the ultimate aim of the analysis is to further understanding on the link between resource rents and growth in Nigeria via governance channel.

Purpose – The primary purpose of this study is to explore the effect of technical changes on provincial-level income inequality in Vietnam. The authors also investigate whether the quality of institutions and human capital level moderate this relationship. Design/methodology/approach – This research applies the fixed-effect and random-effect models on a balanced panel data set of 63 Vietnamese provinces/cities from 2010 to 2020. Findings – The study’s empirical results show that technical improvement has a nonlinear influence on income disparity in Vietnamese localities. When the local level of technology is limited, technological change can mitigate income disparity. However, as local technological levels increase, inequality tends to rise. Moreover, the study also reveals that the quality of a province’s institutions and the level of human resources are factors that moderate the correlation between technological change and income inequality. For provinces with better institutional quality and/or better human resources, inequality tends to decline under the impact of technological change. Practical implications – The results of this study suggest that while encouraging technology advancement, localities should also ensure sustainable development, reduce income inequality and focus on improving institutional quality and human resources development. Originality/value – There are increasing concerns about the impact of technical change on inequality in income distribution; however, empirical evidence on this relationship in developing countries remains scarce. This study is among the few attempts to examine this issue at the provincial level of a developing country considering the moderation effect of institutional quality and human capital level.

Purpose – This research aims to investigate the role of the economic policy uncertainty (EPU) in the outward FDI (OFDI) of the United Kingdom (UK) by considering the institutional quality (IQ) and globalization level of the host country as contextual factors. Design/methodology/approach – The UK’s OFDI to its twenty partners is analyzed by using the factor augmented model for the 2005–2019 period. Findings – The results show that the EPU of the host country has a negative and significant effect on the UK's OFDI. Furthermore, the findings surprisingly illustrate that the globalization level of the host country has a negative and significant impact on the UK's OFDI. In terms of IQ, this study indicates that, while government effectiveness and regulatory quality have a negative and significant influence on the UK's OFDI, the rule of law has a positive and significant effect on the UK's OFDI. Originality/value – This will be one of a few studies considering OFDI in the scope of EPU. Also, the contradicting results of the study add unique perspectives to the literature about the relationship between OFDI, globalization, and IQ.

Purpose – The purpose of this paper is to analyse the institutional threshold effects of foreign aid on foreign direct investment (FDI). Design/methodology/approach – This paper develops a theoretical model from an extended Solow model that introduces the conductive effect of institutions in an aid recipient country towards the capacity of attracting FDI. This study evidences threshold effects with the most recent panel threshold models that consider endogeneity issues. The data on economic institutions and foreign aid are decomposed into disaggregated level to reveal the detailed threshold pattern. Several sample subsets are used for a heterogeneity analysis. Findings – Conducting empirical research on a sample of 62 countries during the period 2003–2016, this study finds robust evidence of the existence of an institutional threshold in the aid–FDI nexus which a country must attain to reap the full attraction of FDI by foreign aid providing financial resources. Furthermore, foreign aid tends to promote FDI in institutions characterized by a right-sized government, a strengthened legal system and an appropriate regulatory environment. On the other hand, aid may crowd out FDI. The results are robust to regional combinations and a subset of low and lower-middle-income countries. In addition, this study finds that aid targeted at social infrastructure and services has a positive effect regardless of institutional threshold. Originality/value – This paper contributes to the literature by introducing a non-linear and discontinuous effect of aid on FDI, i.e. a threshold effect, highlighting the relevance of legal systems and regulations and the possibility of a crowding-out effect on FDI for specific institutional regimes. The thresholds provide a guide for donor countries to ensure aid effectiveness at the risk of being counterproductive and for recipient countries to better assess the institutional dimensions that need to be improved.

Abstract Africa began implementing the Sustainable Development Goals (SDGs) in 2015 emphasizing on sustainable management and effective use of natural capital to spur economic growth (Goals 12, 14, and 15). This study using World Bank data sets from 46 African countries selected for the years 2000 to 2022, examined the nexus between natural resource endowments and economic growth in Africa. We used the system generalized method of moments (sys-GMM) and dynamic panel threshold regression (DPTR) to analyze the data. The findings of the two-step sys-GMM estimation using 'xtabond2' revealed that when the institutional quality variable is added and excluded from the model, natural resource dependence negatively impacts economic growth, but the impact is greater when the institution is excluded. In the estimation of the interaction variable of natural resource dependence and institutional variable included in the model, natural resource dependence positively impacts economic growth. The results of the DPTR using "xthenreg" showed that when the threshold value of natural resource dependence is ≤ 1.73% of gross domestic product, natural resource dependence has a positive impact on economic growth and a negative impact when the threshold value is above 1.73%. Similarly, when the institutional quality threshold is ≤ 0.277, natural resources dependence impacts economic growth negatively; above the threshold (0.277), the impact is positive. In conclusion, natural resource endowment is a curse with no or low-quality institutions and a blessing with high-quality institutions. Thus, building strong institutions and proper utilization of natural resources helps to minimize the adverse impact of resource endowments on economic growth.

The present research aims to investigate the determinants of economic development and productivity by proposing an empirical analysis of the economic effects of institutional quality on the economic complexity of export at the intra-national level, focusing on 103 Italian provinces from 2004 to 2016. Using the System Generalised Method of Moments (System-GMM) estimator, the study assesses the influence of various institutional dimensions on provincial economic complexity, as measured by the Economic Complexity Index (ECI). The findings indicate that institutional quality, particularly rule of law, regulatory quality, and voice and accountability, significantly enhances economic complexity. Better formal and informal institutions such as completeness of contracts, social cohesion, contract enforcement, by reducing transaction costs and uncertainty, and by favouring knowledge dissemination and security of investments, are source of comparative advantage in complex industries that lead to diversified and sophisticated production, fostering economic growth and innovation. Moreover, the study emphasises the importance of related activities, which interact with institutions to support complex and innovative export-related activities through knowledge spillovers and related diversification. The analysis also highlights the pivotal role of human capital, social capital, and innovation, which should remain focal points for policymakers.

Almost three years after the pandemic started, the world had a strong 3.6% recovery after the recession (IMF, 2021). But, this rebound remains uneven across countries. At the same time, many emerging economies kept dealing with Covid-19, and in some advanced countries, the number of Covid cases is starting to rise again. This paper empirically investigates how the government's responses to the pandemic affected economic growth in 105 developing and developed countries from 2017 to 2021. Based on panel smooth transition regressions (PSTR) by Gonzalez et al. (2017), the results indicate that the overall effect of public pandemic measures on growth is negative. However, the effects vary depending on how developed a country is and how good its institutions are. Lockdown measures have hurt emerging economies more than advanced economies. Also, high standards of institutional indicators, including how well the government operates and how good the regulations are, reveal that stringency measures have a smaller negative effect on growth, whatever the country's level of development. Upper-middle income and advanced economies are less affected by pandemic under stable political conditions. Therefore, policymakers should consider providing a responsible institutional environment so that effective steps can be taken to contain efficiently epidemics. [ABSTRACT FROM AUTHOR]

In the context that countries around the world are making efforts to reduce carbon emissions and promote the use of renewable energy, the impact of these issues on the economy is becoming more and more concerned. Our study investigates the impact of renewable energy consumption and carbon dioxide emissions on financial stability and the role of institutional quality in mitigating these effects. Using panel data from 147 countries, including both developed and developing countries, and applying the quantile regression method, this study found that both renewable energy consumption and carbon dioxide emissions reduce financial stability. Moreover, the negative effects of carbon dioxide emissions on financial stability intensify in countries with higher financial stability. Additionally, institutional quality was found to play an important role in mitigating the negative impacts of renewable energy consumption and carbon dioxide emissions on financial stability, especially in countries with high levels of financial stability; the impact was insignificant in developing countries with low levels of financial stability. Our results can be useful for regulators in both developed and developing countries to control the negative impacts of carbon emission reduction and renewable energy policies on financial stability. [ABSTRACT FROM AUTHOR]

Purpose: The paper aims at addressing the following research questions: does institutional quality improve countries' environmental efficiency? And which pillars of institutional quality improve countries' environmental efficiency? Design/methodology/approach: By specifying a directional distance function in the context of stochastic frontier method where GHG emissions are considered as the bad output and the GDP is referred as the desirable one, the work computes the environmental efficiency into the appraisal of a production function for the European countries over three decades. Findings: According to the countries' performance, the findings confirm that high and upper middle-income countries have higher environmental efficiency compared to low middle-income countries. In this environmental context, the role of institutional quality turns out to be really important in improving the environmental efficiency for high income countries. Originality/value: This article attempts to analyze the role of different dimensions of institutional quality in different European countries' performance – in terms of mitigating GHGs (undesirable output) – while trying to raise their economic performance through their GDP (desirable output). Highlights: The paper aims at addressing the following research question: does institutional quality improve countries' environmental efficiency? We adopt a directional distance function in the context of stochastic frontier method, considering 40 European economies over a 30-year time interval. The findings confirm that high and upper middle-income countries have higher environmental efficiency compared to low middle-income countries. The role of institutional quality turns out to be really important in improving the environmental efficiency for high income countries, while the performance decreases for the low middle-income countries. [ABSTRACT FROM AUTHOR]

Purpose: In this research, we explore the adverse impact of foreign ownership on operational security, a critical operational implication of the liability of foreignness (LOF). Design/methodology/approach: The empirical analysis is based on a multi-country dataset from the World Bank Enterprises Survey, which contains detailed firm-level information from over 8,902 firms in 82 emerging market countries. We perform a series of robustness checks to further confirm our findings. Findings: We find that a high ratio of foreign ownership is associated with an increased likelihood of security breaches and higher security costs. Our results also indicate that high levels of host countries' institutional quality and firms' local embeddedness can mitigate such vulnerability in operational security. Originality/value: This study is one of the first to uncover the critical operational implication of the LOF, indicating that a high ratio of foreign ownership exposes firms to operational security challenges. [ABSTRACT FROM AUTHOR]

This study explores the relationship between institutional quality and bioeconomy performance in Italian regions, utilizing both fixed-effects and 2SLS regression models. The findings consistently show a positive association between institutional quality (and its key pillars) and the performance of bioeconomy sectors. These insights offer valuable guidance for policymakers to enhance bioeconomy outcomes through targeted institutional reforms. By contributing to the growing body of research on the regional dimensions of bioeconomy development, this study provides a roadmap for fostering equitable and sustainable growth across diverse regions. [ABSTRACT FROM AUTHOR]

Prior literature establishes a link between family involvement and the firm financial performance. However, the mechanisms through which family involvement in a firm affects its financial performance in different institutional settings are largely unknown. Using an unbalanced panel of 3,322 listed firms from 32 countries over a 9-year period, we find that family involvement in ownership and management on average has negative effects on financial performance. Moreover, the negative effect of family ownership is less profound in countries with good institutional quality. We further find that R&D intensity partially mediates the negative relationship between family involvement and the firm financial performance, but the mediation effect is conditional on the degree of institutional quality in a country. These findings advance the family business, innovation, and institutional literature, and offer important implications for theory and practice. [ABSTRACT FROM AUTHOR]

Purpose – This paper investigates the moderating role of institutional quality in the relationship between public education financing and educational quality in Sub-Saharan Africa (SSA). Design/methodology/approach – This paper uses a two-step system generalised method of moments (GMM) to investigate the dynamic relationships among the variables using data from the World Bank covering the periods 2002–2020 for 46 SSA countries. Findings – The results show that institutional quality moderates the effect of public education financing on educational quality at SSA’s primary, secondary and tertiary levels. This finding shows that improved institutional quality enhances the effectiveness of public educational investments. Practical implications – The findings of this study imply that policymakers seeking to enhance educational quality must not only increase educational investments but also institute measures to improve institutional quality. Originality/value – Prior studies fail to examine the moderating role of institutional quality in the nexus between public education financing and educational quality. This study analyses the role of institutional quality in the public education financing–educational quality nexus in SSA. The findings of this study contribute to improving the return on public education financing in SSA.

Purpose – The objective of this study is to analyze the influence of institutional quality on the attainment of the Sustainable Development Goals (SDGs) using a data set comprising 45 African nations during the timeframe 2000 to 2020. Design/methodology/approach – The data are divided into two periods, with the Millennium Development Goals (MDGs) data covering the years 2000–2015 and the SDGs data spanning from 2015 to 2020. Controlling for other factors, the researcher employs an index of institutional quality and applies the generalized method of moments (GMM) method to analyze the data. Findings – The findings demonstrate a noteworthy inverse relationship between institutional quality and the achievement of both the MDGs and SDGs. The findings reveal a significant and positive link between economic growth and the achievement of the MDGs, while the impact on the SDGs is shown to be insignificant. Population growth significantly drives the SDGs. The results further reveal that trade openness and industrialization contribute positively to the achievement of both the MDGs and SDGs. Practical implications – The findings emphasize the importance of improving institutional quality, promoting economic growth and supporting trade openness and industrialization for sustainable development in African countries. Originality/value – The contribution of the study is twofold. Firstly and to the best of the author’s understanding, this research marks an initial endeavor to empirically investigate the nexus between institutional quality and the SDGs in the context of Africa. Secondly, it adds novelty to the literature by examining how institutional quality influences both the SDGs and their precursor the MDGs, providing insights into the actual contribution of institutions to development within the framework of these two major global compacts.