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Along most of the 2005–2019 period, Uruguay experienced an impressive economic growth. The country extended its public policies across industrial, technological, and social domains. However, there was a dearth of significant structural changes, constraining Uruguay’s ability to embark on a sustained developmental trajectory. Our findings reveal that the majority of implemented policies were designed to enhance competitiveness and build capabilities horizontally, rather than promoting structural changes. This allows us to discuss the dynamic nature of developmental processes marked by increasing policy challenges. In doing so, we stress the relevance of policy support and coordination to sustain inclusive growth processes. [ABSTRACT FROM AUTHOR]

Purpose: Despite the huge financial resources associated with oil, Nigeria has consistently recorded poor growth performance. Therefore, this study aims to examine how corruption and oil rent influence Nigeria's economic performance during the 1996–2021 period. Design/methodology/approach: Various estimation techniques were used. These include the bootstrap autoregressive distributed lag (ARDL) bounds-testing, dynamic ordinary least squares (DOLS), the fully modified OLS (FMOLS) and the canonical cointegration regression (CCR) estimators and the Toda–Yamamoto causality. Findings: The bounds testing results provide evidence of a cointegrating relationship between the variables. In addition, the results of the ARDL, DOLS, CCR and FMOLS estimators demonstrate that oil rent and corruption have a significant positive impact on growth. Further, the results indicate that human capital and financial development enhance economic growth, whereas domestic investment and unemployment rates slow down long-term growth. Additionally, the causality test results illustrate the presence of a one-way causality from oil rent to economic growth and a bi-directional causal relationship between corruption and economic growth. Originality/value: Existing studies focused on the effects of either oil rent or corruption on growth in Nigeria. Little attention has been paid to the exploration of how the rent from oil and the pervasiveness of corruption contribute to the performance of the Nigerian economy. Based on the outcome of this study, strategies and policies geared towards reducing oil dependence and the pervasiveness of corruption, enhancing human capital and financial development and reducing unemployment are recommended. [ABSTRACT FROM AUTHOR]

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.

This study examines whether the effect of oil prices on economic growth is influenced by the level of corruption. I focus on 30 oil-rich economies and employ dynamic heterogeneous panel estimation techniques to address the issue of cross-sectional dependence. Evidence from the study reveals that the impact of oil prices on growth varies with corruption levels. Specifically, the marginal effect of oil prices on growth is positive at low levels of corruption but hampers immediate and long-term growth at high levels of corruption. Essentially, the results indicate that a simultaneous increase in oil prices and corruption impairs growth, whereas increase in oil prices coupled with a reduction in corruption benefits the economy more. Using a disaggregated sample of countries based on their corruption levels, the results suggest that the adverse effect of simultaneous increases in oil prices and corruption is more pronounced in oil-rich countries with higher levels of corruption compared to those with lower levels. The study implies that the level of corruption is a crucial factor in how changes in oil prices impact long-term growth in oil-rich economies. Therefore, for sustainable long-term economic growth, an increase in oil prices must be accompanied by a significant reduction in corruption. [ABSTRACT FROM AUTHOR]

In recent years, China emerged as one of the world’s largest producers of academic research papers contributing massively to national and international journals annually. This prolific output serves as evidence to the dedicated efforts of Chinese universities to foster research activities among their teaching staff. However, the role of academic leaders, particularly that of school deans, on research productivity within these institutions remains an important and unresolved question. The aim of this study is to investigate the impact of the academic achievements of deans on the research output of business schools of China prestigious 985/211project universities. For this purpose, we manually collected data on the deans of business schools of 985/211 project universities from 2000 to 2018 as well as data on published research papers by each school. Empirical results show that during the tenure of an ‘academic dean’, the average number of papers published by business schools increased by about 10.6% annually. After being converted into standard ‘Economic Research Journal’ articles, this effect increased by as much as 28%. The above results are robust with several different model specifications and definitions for academic deans. Our research findings hold significant policy implications, not only for China's education system but extends to various knowledge-intensive institutions, such as hospitals, research labs, and consultancy organizations. [ABSTRACT FROM AUTHOR]

This synopsis empirically showed that the negative relationship between financial development and economic growth can be reversed through consistent policies in Pakistan. To empirically test this argument, the study utilized the data between 1977 and 2022 from the World Bank’s World Development Indicators, the Pakistan Economic Survey, and the Annual Reports of the State Bank of Pakistan. Markov switching methodology was used to capture the regime-specific impact of financial development on economic growth. The novelty of this study lies in the investigation of the role of regime-specific and consistent financial sector policies in recovering the positive finance–growth nexus. Stable and consistent financial sector policies are pivotal to reversing the adverse impact of financial development on economic growth because spurts and reversals in financial and real sector policies hindered the economic growth process in Pakistan. Notably, the findings suggest that the finance–growth relationship depends not only on macroeconomic variables but past performance of the financial sector is an important incentive. Besides, the results reveal that the inflation rate deters economic growth. The study found that the contemporaneous effect of financial development on economic growth is negative and it turns out to be positive after two years. This confirms the nonlinearities between the financial development and economic growth relationship in Pakistan. To this end, policymakers may consider the lag effect while designing financial sector policies. [ABSTRACT FROM AUTHOR]

Uneven economic performance has become a main concern in the regional context of Sumatra. This study examines regional economic dynamics in Sumatra using the newlyweds' night-time light data and digitalization-related variables as the influencing factors. The analysis uses district‐level data from 2019 to 2022 to account for heterogeneity across Sumatra districts and estimates spatial magnitudes among clusters. Two main analyses were conducted to address the challenges of applying spatial perspectives in evaluating economic performances. Sentiment analysis conveys that digitalization-related variables are positively correlated with regional economies. Furthermore, exploiting a Geographically Weighted Regression, this study confirms that the effect of inclusion of digital finance, financial technology, and digital literacy varies across districts. Compared to the Southern part, digitalization-related variables are more pronounced in Sumatra's Northern and Middle parts. In addition, the overall results indicate that the inclusion of digital finance and digital literacy tends to leverage regional growth across districts. The findings suggest that the importance of targeting investment and digitized-based policy in less-affected regions could be a key policy direction for achieving balanced regional development. [ABSTRACT FROM AUTHOR]

This paper explores the way that intellectual property rights (IPRs) protection as a moderator variable affects firm-level productivity gains through innovation (filing patents) and diffusion (importing goods). Applying the estimation method of conditional average treatment effect by Lee, Okui, and Whang (2017) to Chinese firm data, I show the graphic representation of the non-linearity that characterizes the heterogeneous average treatment effects of patenting and importing activities on firm productivity. The graphic results suggest that the productivity effect of patenting is positively influenced by local IPRs protection, while that of importing is initially negatively and subsequently positively affected by IPRs protection. I also find that overstrict protection of IPRs may diminish the productivity impact of both channels, and private-owned firms rely more on IPRs protection to enhance productivity through filing patents. [ABSTRACT FROM AUTHOR]

Structural transformation is among the core questions in development economics, but in recent decades, the discipline has shifted its focus away from production and transformation in favour of analyses on exchange, growth and productivity. Yet, the structural transformation question remains central, and needs to be confronted with the main changes in the global economic and political landscape, such as the emergence of the Belt and Road Initiative (BRI). With its emphasis on an infrastructure-based connectivity agenda, the BRI opens the space for a paradigm shift in development, and for a renewed emphasis on structural transformation. This article introduces a special issue that explores the role of the BRI in promoting structural transformation in low- and middle-income countries, to understand if and under which conditions the BRI creates pathways that can change the structure of the economies. Through an explicit focus on the role of BRI on transformation in low- and middle-income countries, this special issue examines how domestic institutions regulate and coordinate production diversification, national and international sectoral specificities, and drivers and barriers to technological innovation and trade. In this sense, the special issue sheds light on new conceptualisations and empirical examples of industrial policies. [ABSTRACT FROM AUTHOR]

Resilience has become a crucial concept in understanding the ability of complex systems to withstand shocks and adapt to future challenges. This concept has recently gained much attention in various disciplines, including geography and regional science. For example, the European Union has recognized the importance of resilience-based policies in the face of crises such as the COVID-19 pandemic. This study focuses on core-periphery disparities within European regions and aims to examine the impact of economic peripherality on regional resilience. Economic peripheries often face challenges such as adverse sectoral structures, low activity rates, and lower levels of innovation, making them more vulnerable to various shocks. The main hypothesis is that peripherality increases vulnerabilities and is correlated with lower resilience. Nevertheless, peripheral regions are more motivated to enhance resilience compared to regions already considered resilient. We argue that these peripheries need to renew existing structures or create new paths to enhance their resilience. However, historical and path dependency factors make it difficult to bring about such changes in a timely manner. The study explores different conceptual and methodological approaches to core-periphery models and emphasizes the importance of assessing socio-economic disparities from a spatial resilience perspective. Various factors, including trade integration, GDP, industrialization, human capital, and institutional efficiency, appear to contribute to core-periphery differentiation. Moreover, the paper highlights the long-run impact of the recent 2007–2012 economic crisis on peripheral regions, particularly in Southern areas of Greece, Italy, and Spain. To understand the spatial patterns of resilience comprehensively, the study presents a range of European multidimensional resilience maps, including consistent spatial indicators, building on previous resilience atlases that illustrated resilience at various territorial levels. These maps provide evidence-based insights into regional resilience performance and capacity in European regions, facilitating a better understanding of their potential to bounce back from major shocks and disruptions. [ABSTRACT FROM AUTHOR]

Life satisfaction, a key indicator of well-being, is an important outcome of engagement in entrepreneurship. Drawing on uncertainty management theory, we develop a model in which property rights and government activity serve to modify the relationship between self-employment and life satisfaction across countries. Our multi-level study of 23,354 respondents in 26 countries and one region demonstrates that secure property rights positively moderate this relationship and government activity negatively moderates this relationship. Implications for theory and practice are discussed. Plain English Summary: Start your business and be happy. Our study shows that life satisfaction of entrepreneurs differs by country. Environments that protect assets and engage in less government spending tend to have self-employed individuals with higher life satisfaction. While research has often focused on the economic performance of entrepreneurs and their businesses, other non-financial factors, such as indicators of well-being, have more recently been emphasized. Based on 23,354 survey responses, we investigate differences in the relationship between life satisfaction and self-employment across 26 countries and one region. We found that in countries that have stronger asset protection and less government spending, the relationship between self-employment and life satisfaction is strengthened, which suggests that country-level influences (institutions) have profound effects on micro-level (well-being) outcomes. Thus, governments can influence the life satisfaction of individuals. Because a decline in entrepreneurial life satisfaction may dim a country's future growth, governments should be very cognizant of actions that affect their entrepreneurial community. [ABSTRACT FROM AUTHOR]

Government intention to spur innovation can result in the proliferation of low-quality patents, which is especially pronounced in countries with a low level of government accountability. This study examines the paradoxical effects of government-funded innovation in weakly institutionalized environments. I offer a game-theoretic model, in which the government has a stake in technological development and invests in research and development, although this encourages the growth of low-quality patents. Using Russian patents data between 1998 and 2016, I illustrate this mechanism by demonstrating the causal impact of Russia's government policy, which resulted in a simultaneous increase in the number of patents and a decrease in the absolute number of high-quality patents in the patent pool. This study provides a theoretical background for evaluating the impact of political incentives for investing in the creation of new technologies in the technological development of countries.

COVID-19 disrupted both social and economic development in several dimensions. Governments of the vast majority of countries implemented strategies to battle the pandemic and its negative consequences. The question is, which countries can be assessed as successful in that matter? In this study, we use empirical tools to investigate which governmental actions and state characteristics appear proper, as reflected by pandemic misery indices. The results of our study imply that fiscal measures taken solely are not enough to confront the negative outcome of the pandemic. Interestingly, a strong rule of law, high government effectiveness, and low corruption seem to help countries get through COVID-19. These conclusions may be useful for policymakers in the context of the current and future negative shocks. [ABSTRACT FROM AUTHOR]

We examine the effect of sectarian politics in the presence of weak state capacity on long-term economic growth. To this end, we exploit the 1956 civil uprising between Maronite Christian and Sunni Muslim factions in Lebanon to estimate the impact of sectarian political tensions on long-term growth. To isolate the impact of the uprising, we use synthetic control estimator and match Lebanon's pre-1956 growth and development trajectory with the rest of the world where such uprising did not occur, and estimate the counterfactual growth trajectory in the hypothetical absence of the sectarian conflict. Our evidence indicates large and pervasive negative growth effects of factionalism. Our estimates imply that Lebanon's per capita income down to the present day is on average 57% lower than that of its pre-1956 synthetic control group without sectarian clashes, and does not seem to be driven by preexisting or subsequent trends and shocks. The negative long-term growth effect of sectarian conflict is robust to a battery of spatial and temporal placebo checks, choice of samples and is not sensitive to the composition of control groups. [ABSTRACT FROM AUTHOR]

This study investigates the impact of financial globalization and democracy on economic growth. It also investigates the joint effect between financial globalization and democracy on economic growth. Having utilized the system GMM estimation method to control for country-specific effects and potential endogeneity of regressors and a panel data of 40 African countries from 1990 to 2014, we find that financial globalization has a positive and significant impact on economic growth. We also find that democracy enhances economic growth. Moreover, the joint effect between financial globalization and democracy suggests that while de jure financial globalization interacts with democracy to increase economic growth, de facto financial globalization interacts with democracy to have a negative impact on economic growth. Based on the findings of this study, we recommend that in addition to scaling up international capital flows, policymakers should increase their political and economic influence by setting political and legal guidelines for foreign investors. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to analyse the efficiency effects of institutional distance on Chinese outward foreign direct investment (FDI) in Africa. Design/methodology/approach: The study utilised the true fixed-effect stochastic frontier analysis (SFA) model. Data from 2003 to 2016 (14 years) were acquired from 42 targeted African countries, which are included in the analysis. Findings: The results reveal that FDI flow efficiency can be maximised with a high institutional distance between China and African countries. Contrariwise, comparable institutional distance, measured by the rule of law, regulatory quality and government effectiveness between the host and home countries, reflected a significant positive impact for Chinese outward foreign direct investment (OFDIs), indicating Chinese MNEs can invest directly in a country with comparable institutional characteristics. Originality/value: There have been limited exceptional studies that assessed the effect of institutional distance between emerging countries. However, none of these studies investigated the effect of institutional distance between China and Africa at a national level. Using the advantage of the SFA model, this study assesses the efficiency effects of institutional distance between the host and home country. [ABSTRACT FROM AUTHOR]

This study examines the AI investment (AII)-human well-being (HWBG) nexus contingent on governance indicators/dimensions within G-7 nations from 2012 to 2022 using the Cross-Sectional Augmented Autoregressive Distributed Lag (CS-ARDL) technique. Based on the results, policymakers should prioritize integrating AII into governance to boost HWBG in the short- and long-term. However, caution is needed when considering AII's interaction with institutional governance, as it didn't support HWBG. While AII and overall governance quality seem promising, it is vital to implement safeguards against potential negative effects stemming from the interaction between AII and institutional governance on HWBG.

We investigate the relationship between China and the United States’ trade with sub-Saharan Africa (SSA) and the region's economic growth (EG). The research analyzes trade dynamics, distinguishing between the effects of exports and imports, while highlighting the significant role of institutional quality (IQ) in shaping EG within the context of China–US trade with Africa. Despite increasing trade with China and the US, SSA’s growth has lagged, prompting exploration into the specific trade forms contributing to EG and the role of IQ. Using data from 30 SSA countries from 2002-2020, we employed AMG and IV-2SLS estimations for our analysis. The study reveals that IQ complements Chinese and US trade to promote EG. Importantly, Chinese and US imports from Africa consistently boost growth, with the impact of exports diminishing. Chinese trade proves influential in countries with strong institutions but lacks impact in those with weaker institutions at higher levels of IQ. In contrast, US trade benefits growth in both strong and weak institutional contexts. These findings are instrumental for policymakers, offering insights into the specific trade activities that drive growth in SSA. Additionally, we emphasize the pivotal role of robust institutions in ensuring the positive impact of trade on growth. [ABSTRACT FROM AUTHOR]

We develop a dynamic general equilibrium macroeconomic model with segmented labour markets and efficiency wages to examine how labour market structures influence the impact of human capital investment in low-income countries. For plausible calibration values, public investment in education is much more effective than infrastructure investment in promoting long-run economic development, but because investment in education affects labour productivity with a lag, policymakers face an intertemporal trade-off which depends on their social discount rate and the weight of distributional objectives in the social welfare function. We show the distortionary structure of labour markets matters in leveraging welfare gains from public investment and in shifting the optimal public investment programme further in favour of human capital, relative to the case of flex-wage full-employment labour markets. [ABSTRACT FROM AUTHOR]

Trust in institutions is important for economic prosperity. We present results from a field study where we compare stated trust in institutions in general, stated trust in employees at institutions, and amount sent to employees at institutions using a trust game. Including more than 250 entrepreneurs in Addis Ababa in Ethiopia, we examine levels of trust towards entrepreneurship development agency, district administration, tax authority, and electric utility. There is a positive and sizeable significant correlation between stated trust and trust game. Furthermore, we find that generalized trust is weakly correlated with trust in specific institutions both compared with stated trust, and trust game. Given the large heterogeneity in levels of trust to specific institutions, we argue it is important to elicit institution-specific levels of trust. [ABSTRACT FROM AUTHOR]

This paper investigates the effects of institutional quality on current account balance in a sample of 44 sub-Saharan African countries over the period 1996–2019. The system generalized method of moments approach is privileged for estimations. Our findings show that institutional quality is a determinant of current account balance for sub-Saharan African countries. Specifically, political stability and absence of violence, regulatory quality, control of corruption, and government effectiveness are indicators that are robust and significant determinants of current account balance. Some robustness tests performed confirm our results. These findings indicate that governments in this region should improve institutional quality through strengthening the political environment, reducing corruption, and enabling conditions of private sector development. [ABSTRACT FROM AUTHOR]

What role does education play in economic growth? Conventional wisdom and macroeconomic theories posit that as a nation becomes more educated, they become wealthier. The basic argument says a more educated populace is more productive (i.e. the quality of human capital increases) thereby increasing economic output. However, the majority of empirical work done on this topic has not found a strong relationship between education and economic growth. The purpose of this paper will be to identify where this body of research went wrong and offer theoretical insights ignored by this literature based in market-process theory tradition. It will draw upon an existing body of research (both empirical and theoretical) that fits within this theoretical paradigm as well as suggest a path forward for researchers in this field. [ABSTRACT FROM AUTHOR]

A growing strand of literature relates pro-market institutions to business and overall employment creation. However, the effects of pro-market institutions on industry-specific employment creation still need to be better understood. Employment creation in some industries may be more sensitive to pro-market institutions. Moreover, if these industries employ a large proportion of the population, the role of local-level institutions becomes more critical for boosting employment creation across industries. Therefore, we disentangle the effects of local-level pro-market institutions on employment creation across nine major industries by using 5-year balanced panel data of 374 US metropolitan areas from 1972 to 2017. Our fixed-effects results indicate that pro-market institutions boost employment creation only in the manufacturing, retail, and construction sectors. Furthermore, our findings reveal that local public policies can benefit or harm local employment creation, depending on the concentration of industries in the area. [ABSTRACT FROM AUTHOR]

This paper makes the most of the observed actions of bribe takers and givers from the World Bank Enterprise Surveys and studies how a taker's action influences a giver's decision to pay bribes. To motivate our empirical study, we consider Kaufmann and Wei's (1999) Stackelberg game between a tax authority and a firm that undergoes tax inspection. The model predicts that, when the authority can use its action as a credible threat for the firm's profitability, the authority disturbs the firm by inspecting more, and the firm is more likely to pay bribes. Consistent with the theoretical prediction, we find correlational evidence that the propensity to pay bribes increases with the number of inspection visits, particularly for non-democratic countries. [ABSTRACT FROM AUTHOR]

Natural gas is a major fuel in Peru, accounting for nearly 45 % of all energy sources used to generate electricity. This research aims to analyze the dynamic association between economic growth and natural gas consumption (NGC), considering Peru's trade openness (Tr) from 1965 to 2022. The augmented Dickey–Fuller unit root test is utilized to test the stationary properties of the log series of real gross domestic product (GDP), NGC, and real Tr. We used the autoregressive distributed lag (ARDL) cointegration approach to determine the long-run (LR) equilibrium association between the variables. As the second cointegration method, we used the Engle-Granger test. The results of the ARDL test support the cointegration of all variables, we find the opposite case with Engle-Granger method. The Granger causality results support the neutrality hypothesis between GDP and NGC, a two-way causality association between Tr and GDP, and the neutrality hypothesis between NGC and Tr. Nevertheless, in the LR, cointegration confirms the growth hypothesis between GDP and NGC. Similarly, we find that in the LR, the first lag of Tr positively impacts the current GDP value. Meanwhile, in the short run, Tr has a positive effect on Peru's GDP. Then, using the findings of cointegration among all variables, we can conclude that NGC and Tr are the drivers of economic growth in Peru in the LR. Finally, we discuss the policy implications of our results.

Emerging countries usually rely on the innovation of enterprises within the regional innovation ecosystem to enhance the national innovation level. However, existing literature lacks insight into how antitrust policies might influence innovation within them. We estimate the impact of the implementation of the Anti-Monopoly Law on enterprise innovation within Zhongguancun Science and Technology Park, China's prominentregional innovation ecosystem. Using a cross-industry difference-in-difference design, we show that greater exposure to competition shock materially boosted enterprise innovation. Antitrust policy promotes enterprise innovation by increasing the R&D investment, human capital, and export. The promotion effect of antitrust is relatively strong in the sample of electronic information industry, firms with low levels of financing constraints, and those that undertake open innovation. Our findings elucidate the nexus between competition and innovation in regional innovation ecosystems and underscore the pivotal role of antitrust policies in the development of Zhongguancun Science and Technology Park.

The relationship between institutional quality, financial development, and economic growth has been well documented in the literature. However, much less work has been done the effect of judicial independence (JI) on financial market development (FM) in particular. This paper fills that gap using the JI score and FM in the context of 23 emerging markets (as identified by the Financial Times Stock Exchange Group) over the period 1980–2021. Overall, the results suggest that, in selected emerging markets JI fosters FM. Interestingly, the results across various quantiles of JI show that low JI hampers FM, but a medium and high level of JI boosts FM in these markets. These results are robust to several specifications. To the best of our knowledge, this is the first study to examine the direct impact of JI on FM and confirms the theories on new institutional economics as well as law and finance in emerging markets.