Showing papers in "International Journal of Social Economics in 2019"

Are human capital, intellectual property rights, and research and development expenditures really important for total factor productivity? An empirical analysis

Abstract: The purpose of this paper is to investigate the impact of human capital (HC), intellectual property rights (IPRs) and research and development (R&D) expenditures on total factor productivity (TFP), which leads to economic growth.,The panel data technique is used on a sample of 16 countries categorized into two groups, namely Brazil, Russia, India and China (BRIC) and Central and Eastern European (CEE) countries and, in order to make a comparison for the time period of 2007–2015, the researchers used a fixed effect model as an estimation method for regression.,The results indicate that HC, IPRs and R&D expenditures appear to be statistically significant and are strong factors in determining changes in TFP and exhibit positive results in all sample sets. Moreover, IPRs alone do not accelerate growth in an economy, especially taking the case of emerging nations.,Considering the importance of CEE and BRIC countries, and inadequate research on these regions with respect to current study’s variables and techniques, the present research provides valuable insights about the importance of HC, IPR and R&D activities and their impact on TFP, which leads to economic growth. IPRs create a fertile environment for R&D activities, knowledge creation and economic development. Distinct nations can attain better economic status via HC, R&D activities, innovation, trade and FDI, although the relative significance of these channels is likely to differ across countries depending on their developmental levels.

Financial inclusion matters for economic growth in India: Some evidence from cointegration analysis

Abstract: The purpose of this paper is to examine the relationship between financial inclusion (FI) and economic growth in India.,To measure FI, a multidimensional time-varying index is proposed following the Human Development Index method. The long-run relationship between FI and economic growth is examined by using the autoregressive distributed lag (ARDL) approach to cointegration and nonlinear ARDL approach. Further, the direction of causality is investigated by employing the Toda–Yamamoto Granger causality test.,The linear cointegration test confirms a long-run relationship between FI and economic growth for India. The improvement in both demand-side and supply-side financial services has a positive impact on economic growth. These results suggest that India can attain long-run economic growth by improving the coverage of FI. However, there is no evidence of nonlinear cointegration, indicating that there is no asymmetric effect of FI on economic growth. Further, the causality test shows that FI granger causes economic growth but not vice versa.,The major limitation of the study is the availability of time series data for all important variables. The index for both demand- and supply-side indicators can be extended with several other important variables in later date once the data are available for those variables.,As the study confirms that FI is one of the main drivers of economic growth, it is suggested that the policy maker emphasizing on financial sector reforms can enjoy economic growth in the long run, especially in developing countries. Therefore, the government and policy makers need to address the issues involved in access to financial services to spur economic growth.,The study examines the long-run relationship between FI and economic growth employing ARDL bound testing approach and nonlinear ARDL approach, separately for demand-side and supply-side indicators. Further, the study uses the Toda–Yamamoto granger causality to find the direction of causal flow between FI and economic growth.

Demographic characteristics of the board of directors’ structure and tax avoidance: Evidence from Tehran Stock Exchange

Abstract: The structure of corporate governance, as one of the important elements to be considered based on the different characteristics than other companies, such as women, expertise, tenure and management is different. But two measures for the presence of women in the board of directors and the size of director’s board are considered as corporate content characteristics that can affect corporate tax strategies in avoiding tax or taxes timely pay off. The purpose of this paper is to understand the demographic characteristics of the board of directors structure on the board and tax avoidance in Tehran Stock Exchange (TSE).,Sample includes the 505 firm-year observations from companies listed on the TSE during the years 2012–2016 and research hypothesis was tested using multivariate regression model based on panel data.,The results indicate that female presence on the board of directors reduces the corporate tax avoidance. Additionally, firms with a larger size of board of directors are associated with more tax avoidance.,The current study is almost the first study which has been conducted in Iran, so the findings of the study not only extend the extant theoretical literature concerning the tax avoidance in developing countries including emerging capital market of Iran, but also help investors, capital market regulators and accounting standard setters to make informed decisions.

Endogenous specification of foreign capital inflows, human capital development and economic growth

Abstract: The purpose of this paper is to empirically investigate the relationship between foreign capital inflows, human capital development (HCD) and economic growth in ECOWAS countries.,In line with the augmented Solow model, the relationship between foreign capital inflows, human capital development and gross domestic product in the ECOWAS member countries is investigated using the pool mean group method.,The authors find overwhelming evidence that foreign capital inflows and human development have a significant effect on economic growth in ECOWAS member countries. However, foreign direct investment (FDI), official development assistant, HCD and gross domestic investment are positively related to economic growth in sub-regions economies. Conversely, migrate official remittance, portfolio investments and external debts are negatively related to economic growth.,The authors recommend that sound economic policies should be targeted in encouraging foreign capital accumulation and HCD, especially on FDI, official development assistance that exerts a positive impact on the economic growth of the sub-region. Therefore, training is required to prepare the labor force to work with new technologies and promote efficient enterprise for ECOWAS economies to compete with developed countries and emerging economies.,This study argued that the development of human capital is a pathway that may lead countries away from sustained growth. In the context of any economy which lack well-developed capital and education markets, many otherwise qualified citizens may be denied the basic skills they need in order to contribute fully to the nation’s economic development. HCD would encourage foreign investments, resulting in reduction in poverty in ECOWAS countries.,Several studies have been done on foreign capital inflow and economic growth nexus such as Orji et al. (2014), Ajide and Raheem (2016), Musibau et al. (2017), etc.; however, none of the research studies has actually examined the effect of the relationship between foreign capital inflows and HCD on economic growth in ECOWAS countries. This study is designed to fill the vacuum.

Dynamism between selected macroeconomic determinants and electricity consumption in India: An NARDL approach

Abstract: By disentangling the impact of positive and negative shocks of GDP, FDI and oil consumption on electricity consumption, the purpose of this paper is to investigate whether this bifurcation significantly determines the level of electricity consumption in the short run and long run.,Using the recently developed nonlinear autoregressive distributed lag (NARDL) bounds approach, the study investigates the changes in the level of electricity consumption over a period of 1980–2015. The inclusion of a dummy variable for the possible structural break makes the electricity demand function more reliable. After checking the stationarity of data series, the study has employed the bounds test, which confirms the existence of the long run stability in the system. Further, using the VECM, the causality among the comprised variables has also been examined.,The findings confirm that not only the positive shocks but also the negative shocks in GDP have a positive and significant impact on electricity consumption in the long run. Similarly, the increased FDI has widened the scope of electricity consumption in the region, whereas the negative shocks’ impact is found negative in the long run. In comparison to GDP and FDI, the influence of the increased oil consumption on electricity demand is found negative and significant in India, which reveals that electricity acts as a significant substitute for oil consumption in the long run.,To the best of the literature evidences available, none of the studies in the past has examined electricity demand in an NARDL framework. The study may help in estimating the demand for electricity consumption comprehensively, as this approach captures the separate influence of favourable and unfavourable changes while determining the level of electricity consumption. This approach may be crucial for policy makers, especially in an energy importer country, such as India.

Decisional factors driving farmers to adopt organic farming in India: a cross-sectional study

Abstract: The purpose of this paper is to carry out an empirical investigation of the role of various factors such as economics, social, marketing, cultivation and government in adoption of organic farming. Further, this study examines the factors that influence farmers’ choice of adopting organic farming, based on their demographic classification such as education level, farm size, farming experiences and land ownership of the organic farmers.,To address the research objectives, the primary data were collected with the help of a structured questionnaire from 200 respondents. In this study, the QUAL–QUAN sequence of mixed method design was used. Four focus groups were conducted to identify the factors of organic farming adoption. Further, multinomial regression analysis was applied to analyze the differential impact of these factors in relation to the farmers’ demographic classification.,The study found five major factors that affect the adoption of organic farming (economic, social, marketing, cultivation, government policy) in India. The study also observed that marketing and government policy factors were most crucial in influencing all types of farmers irrespective of their educational level. The farmers with more farming experience were more concerned about social factors. Similarly, the farmers using lease farms were found to be concerned about the economic viability of organic farming.,This study suggests that without government support, the adoption of organic agriculture seems to be a highly challenging task in a situation, where majority of the farmers fall under the small and marginal category. Hence, to promote organic farming in a developing country like India, the government has to invest more in schemes where farmers should get exclusive training and support to strengthen their intention behind the adoption of the organic farming.,Based on the collective insights from the studies, the different stakeholders with interest in organic agriculture may frame necessary strategies to promote organic farming.

The effect of service quality toward public satisfaction and public trust on local government in Indonesia

Abstract: Purpose The purpose of this paper is to investigate the effect of service quality toward public satisfaction and public trust on local government in Indonesia. Design/methodology/approach A quantitative approach was used to achieve the objectives of the study. The study consisted of nine exogenous variables and one endogenous variable. The exogenous variables were delivery, timeliness, information, professionalism, staff attitude, organizational politics, internal roles, external roles and citizen satisfaction, while the endogenous variable was public trust toward the regional government. The samples were taken using two sampling methods, cluster sampling technique and proportional stratified random sampling technique. The cluster sampling was institutional sample in which the researchers selected 2 out of 11 regencies in West Sumatra, and 2 out of 7 cities in West Sumatra. The regencies were Pasaman Barat and Tanah Datar and the cities were Padang Panjang and Padang. In the lower level, there were ten nagari and ten lurah. On the second stage, the sample was selected using the proportional stratified random sampling technique that had been set at the first stage. Slovin formula with 2 percent of errors was used to determine the number of samples. The total respondents in this study were 4,177 respondents. Findings The hypothetical model can be used as a new model for public service that was provided by the local governments (cities and districts) and it was able to increase citizen satisfaction and citizen trust with local government, especially in the basic need services such as education and health as described in Figure 1. In order to increase public satisfaction on the basic needs, such as education and health services, regional government should improve delivery, timeliness of service, availability of information, staff professionalism, staff attitude, external and internal roles of manager and at the same time minimize organizational politics within the local government. Furthermore, it is also evident in this model that increasing public satisfaction on basic services can increase public confidence toward regional government. The finding that shows the novelty of this research is the internal and external role of managers in improving public satisfaction and trust in regional government. Meanwhile, the addition of internal political as variable is a development to improve the existing models. Originality/value Regional government should reconstruct their basic public service in order to meet need of the public. No previous study has comprehensively studied the relationship between interaction quality, physical environmental quality, and outcome quality to public satisfaction and its implication to public trust, especially in Indonesia.

Socioeconomic inequality in catastrophic healthcare expenditures in Western Iran: A decomposition analysis

Abstract: Financial protection of households against catastrophic healthcare expenditure (CHE) is defined as one of the main goals in health systems. The purpose of this paper is to measure and decompose socioeconomic inequality in CHE among households in Kermanshah province, Western of Iran.,This cross-sectional study was carried out among 1,188 households in 2017. Data were extracted from the Household Income and Expenditure Survey which is conducted by the Statistical Center of Iran. The CHE is defined as household healthcare expenditure greater than or equal to the 40 percent of household’s “capacity to pay.” The concentration curve and the Wagstaff (W) and Erreygers (E) indexes were used to illustrate and measure the extent of socioeconomic inequality in CHE. In addition, the authors decomposed the W and E indexes to identify the main determinants of socioeconomic inequality in CHE.,The results indicated that the prevalence of CHE among households was 4.12 percent (95% confidence interval (CI): 3.13 to 5.42 percent). The estimated value of the W and E indexes were −0.2849 (95% CI: −0.4493 to −0.1205) and −0.0451 (95% CI: −0.0712 to −0.0190), respectively; suggesting the concentration of CHE prevalence among the poor households. Decomposition analyses indicated socioeconomic status as the most important factor contributing to the concentration of CHE among the poor. In contrast, health insurance coverage was found to increase the concentration of CHE among the rich in Iran.,The current study demonstrated a higher concentration of CHE among the poor households in Kermanshah province. These results call for the government’s efforts to reduce healthcare expenditure among socioeconomically disadvantaged populations. Further studies are required to understand the mechanisms through which health insurance coverage increased the probability of CHE among rich in Kermanshah province.

Weak economic institutions in Africa: a destiny or design?

Abstract: The primacy of institutions for economic progress has been established in the literature. Yet, less research attention is paid to the existence and persistence of weak economic institutions in Africa. Thus, the purpose of this paper is to empirically explore the determinants of the quality of economic institutions in Africa.,Hausman–Taylor instrumental variable estimator of panel regression was employed for a sample of 43 Sub-Sahara African countries over the period 1995–2017.,The study finds that the existence and persistence of weak economic institutions in Africa is more of design than destiny. That is, weak economic institutions are created and sustained more by bad political institutions rather than cultural diversity and geographical factors. Therefore, strong political institutions need to be entrenched to reverse the equilibrium of weak economic institutions and dismal economic performance in the continent.,The study provides deep understanding of the determinants of economic institutions. This is imperative for policy makers, development agencies and stakeholders in designing viable economic policies and programs for the continent.,The novelty of the study is rooted in the examination of the factors responsible for the development and persistence of weak economic institutions in Africa. The idea is original because previous studies focus on political institutions and neglected economic institutions.

Armed Conflict and Food Security in West Africa: Socioeconomic Perspective

Abstract: West Africa represents a very good case of a sub-region currently plagued with the problem of food insecurity. Traditional theories have attributed the increasing food insecurity in the region to problems of poor governance, corruption and climate change. In view of the persistent and increasing nature of armed conflict in the sub-region, the purpose of this paper is to examine the effect of increasing armed conflict on food security in Economic Community of West African States (ECOWAS) member countries.,The study utilized the dynamic generalized method of moments (GMM) to investigate the effect of conflict intensity on food security in the 14 member states of the ECOWAS using annualized panel data from 2005 to 2015.,The findings reveal that armed conflict is a significant predictor of food security in West Africa.,The findings of the study bring to fore, the urgent need to rethink global initiative for combating food insecurity. The effort must also identify the causes of armed conflicts and design sound strategies for de-escalating the armed conflicts. Resolving the escalating armed conflict entails developing a conflict resolution framework that is extremely sensitive to the causes of conflict in Africa and adopting localized ex ante institutional diagnostics that would help in understanding the nature of the conflicts.,Traditional theory perceives climate change, social injustices, property right, food insecurity, religious extremism and bad governance as the predictors of armed conflicts. In this study, the authors departed from the traditional theory by demonstrating that the nature and trend of armed conflict could also pose a serious threat to food security.

Public governance quality and tax compliance behavior in developing countries: the mediating role of socioeconomic conditions.

Abstract: The purpose of this paper is to explore the relationship between public governance quality and tax compliance behavior in developing countries in terms of what transpires between governments and citizens, leading the later to pay or to abstain from paying tax. The study argues that socioeconomic condition is a mediator in the relationship and explains how and why it is so.,This study adopts the conceptual approach and connects the concepts through synthesis of literature and previous research findings.,The study concludes that socioeconomic condition mediates the relationship between public governance quality and tax compliance behavior in developing countries. Socioeconomic conditions appear to be a broader, clearer and more practical concept for measurement purpose than public goods/spending as currently understood in the literature.,The study is a conceptual effort, and there may a be need to undertake further empirical investigations. Developing countries vary in their socioeconomic conditions, and there is a need to acknowledge country-specific circumstances.,The implication of the finding includes the need for further research on the concept of socioeconomic condition, and how and why it influences tax compliance behavior in developing countries. Stakeholders and governments should monitor the impact of policies and actions on the socioeconomic condition of citizens to ensure they are satisfied. Their dissatisfaction leads to the boycott of the tax system which adversely affects economic development.,This study makes an original contribution by exploring socioeconomic conditions as a mediator between public governance quality and tax compliance behavior in developing countries. It is a significant contribution that is capable of shifting the direction of tax compliance research in developing countries due to its practical realities.

Measuring impact of financial inclusion on rural development through cooperatives

Abstract: The purpose of this paper is to measure the impact of financial inclusion on rural development through cooperatives.,The primary data were collected from 540 beneficiaries of Cooperatives banks operating in three northern states of India, i.e., J&K, Himachal Pradesh and Punjab using purposive sampling during January to June 2016. Exploratory factor analysis, confirmatory factor analysis, ANOVA, t-test and structural equation modelling were used for scale purification and data analysis.,The findings of the study revealed that financial inclusion through cooperatives has direct and significant impact on rural development. Further, the results support the notion that financial inclusion is a strategy of inclusive growth, but inclusive growth itself is a subset of a larger set of inclusive development which means that the benefit must reach the all, particularly the women and the children, minority groups, the extremely poor and those pushed below the poverty line by natural and human-made disasters.,The research has certain inescapable limitations. First, the in-depth analysis of the study is restricted to three northern states of India only because of time and resource constraints. Second, the study is confined to the perception of financial inclusion beneficiaries only, which in future could be carried further on the perception of other stakeholders such as SHGs, banking correspondents, etc. Third, possibility of subjective interpretation in some cases cannot be ruled out.,The study makes contribution towards financial inclusion literature relating to sustainable rural development and fulfils the research gap to some extent by assessing the impact of financial inclusion on rural development through cooperatives.

Economic status of women in India: paradox of paid–unpaid work and poverty

Abstract: The purpose of this paper is to understand the dynamics of women labor considering their unpaid work status. The intention is to understand the precise meaning of unpaid work and its magnitudes and trends in India. This study explores the causes of women to be engaged in unpaid work and the reason behind the non-reduction of unpaid labor as prophesied by the standard theories of economic development. Furthermore, this study aims to examine the nexus of the work status of women and its impact on poverty to give possible recommendations for promoting faster and more inclusive growth of the Indian economy.,For addressing the above-mentioned issues, this study has used the data of 50th, 55th, 61st and 68th surveys conducted from 1993–1994 to 2011–2012 by National Sample Survey Office. In the first stage of analysis, the magnitude of unpaid work by women has been estimated. Subsequently, the relative contributions of socio-economic and demographics on the work status of women (paid and unpaid) in India have been assessed by using logistic regression model. In the second stage, the level of poverty among paid and unpaid women has been measured by using poverty estimation methodology. Furthermore, the incidence of poverty among unpaid women has been decomposed, and the contribution of socio-economic predictors has been measured.,The study reveals that the participation of women in paid activities has been consistently declined. During the study period, it is observed that the amount of unpaid work activities of women has significantly increased. Moreover, the increase of unpaid activities is more intense for those women who are less educated, marginalized and belong to the poorer household.,The key contributions of this study are to underpin the issue of low and declining participation of female labor force in India as well as to understand the dynamics of changing work status (paid to unpaid) of females in the neo-liberal development framework. Furthermore, this study explores the consequences of the increase in unpaid work on poverty, which has not been the focus of previous studies.

Do market size and financial development indicators affect human capital of select south Asian economies

Abstract: The purpose of this paper is to empirically investigate whether market size and its growth rate, along with financial development indicators, affect human capital in selected south Asian economies over the time period from 1984 to 2015.,The stationarity of the variables are checked by LLC, IPS, ADF and Phillips–Perron panel unit-root tests. Pedroni’s and Kao’s panel co-integration approaches are employed to examine the long-run relationship among the variables. To estimate the coefficients of co-integrating vectors, both PDOLS and FMOLS techniques are used. The short-term and long-run causalities are examined by panel granger causality.,From the empirical results, the authors found that both the market size and financial development play an important role in the development of human capital in the selected south Asian economies. It is evident that a large market size and faster degree of financial development in the selected countries result in better human capital formation.,There are a number of studies on the impact of financial development indicators on human capital and economic growth, but there is hardly any study that considers market size and its growth rate along with financial development indicators with human capital in the context of south Asian economies. The study fills this research gap.

Trends and causes of socioeconomic inequalities in maternal healthcare in Ghana, 2003–2014

Abstract: The purpose of this paper is to assess the trends of socioeconomic-related inequalities in maternal healthcare utilization in Ghana between 2003 and 2014 and examine the causes of inequalities in maternal healthcare utilization in Ghana.,Data are drawn from three rounds of the Ghana Demographic and Health Survey collected in 2003, 2008 and 2014, respectively. The authors employ two alternative measures of socioeconomic inequalities in health – the Wagstaff and Erreygers indices – to examine the trends of socioeconomic inequalities in maternal healthcare utilization. The authors proceed to decompose the causes of inequalities in maternal healthcare by applying a recently developed generalized decomposition technique based on recentered influence function regressions.,The study finds substantial pro-rich inequalities in maternal healthcare utilization in Ghana. The degree of inequalities has been decreasing since 2003. The elimination of user fees for maternal healthcare has contributed to achieving equity and inclusion in utilization. The decomposition analysis reveals significant contributions of individual, household and locational characteristics to inequalities in maternal healthcare. The authors find that educational attainment, urban residence and challenges with physical access to healthcare facilities increase the socioeconomic gap in maternal healthcare utilization.,There is a need to target vulnerable women who are unlikely to utilize maternal healthcare services. In addition to the elimination of user fees, there is a need to reduce inequalities in the distribution and quality of maternal health services to achieve universal coverage in Ghana.

What economics education is missing: the real world

Abstract: Purpose The global financial crisis led to increasing distrust in economic research and the economics profession, in the process of which the current state of economics and economic education in particular were heavily criticized. Against this background, the purpose of this paper is to conduct a study with undergraduate students of economics in order to capture their view of economic education. Design/methodology/approach The paper is based on the documentary method, a qualitative empirical method, which combines maximum openness with regard to the collection of empirical material coupled with maximum rigor in analysis. Findings The empirical findings show that students enter economics curricula with epistemic, practical or moral/political motivations for understanding and dealing with real-world problems but end up remarkably disappointed after going through the mathematical and methods-orientated introductory courses. The findings further indicate that students develop strategies to cope with their disappointment – all of them relating to their original motivation. The theoretical contextualization of the empirical findings is based on the psychological concept of cognitive dissonance. Social implications A socially and politically responsible economic education, however, should provide students guidance in understanding current and prospective economic challenges, thereby enabling them to become informed and engaged citizens. Therefore, it is essential that the students’ criticism of the current state of economic education be taken seriously and BA programs reformed accordingly. Originality/value The originality of this paper lies in the application of a qualitative methodology and explicit focus on the student perspective on economics education. The study provides empirical evidence for a lack of real-world orientation in economics education.

Responsible innovation and social innovation: toward an integrative research framework

Abstract: Responsible innovation (RI) and social innovation (SI) are two fields of innovation study experiencing burgeoning policy, practice and research interest. Despite this rapid rise in popularity, the scholarly literature in these two related areas of innovation study remains quite separate, stymieing the growth of shared research insights. The purpose of this paper is to propose a pragmatic, process-based framework that lends itself to advancing systematic research in both fields while retaining their distinct identities.,This conceptual paper outlines an analogy-inspired framework that builds on the logical thinking put forward by Philosopher Willard Van Orman Quine in 1962. It focusses on key processes that cross-cut both fields.,Reflexivity, collaboration and design are identified as three broad core processes that span both the RI and SI fields and form the basis of an integrative framework that highlights the scope for cross-field research pollination.,The literature that draws these two fields together is virtually non-existent. The paper uses analogy to facilitate awareness of the parallels between these two areas of innovation study. The integrative framework put forward in the paper is of value for advancing cumulative research in innovation fields of critical importance to the society.

Performance of microfinance institutions in the MENA region: a comparative analysis

Abstract: The purpose of this paper is to provide preliminary efficiency assessment of Arab microfinance institutions (MFIs) within the period 2002–2012. Microfinance is defined as the provision of financial services to poor and low-income households and their microenterprises on a sustainable basis.,The authors first present the main features of microfinance in the Middle East and North Africa (MENA) region. Second, based on a simple of 72 microfinance institutions issued from ten countries of the region, they develop a bootstrap–data envelopment analysis (bootstrap–DEA) framework to measure Arab MFIs’ efficiency. Finally, they apply parametric and non-parametric tests to compare the performance and identify factors that contribute to the efficiency of Arab Islamic microfinance institutions.,Efficiency scores of the MENA region exhibit high variability, both across time and countries. Significant difference in efficiency was found due to MFI age or regulation. Results also reveal the ability of Arab MFIs to combine social and financial performance and their solidity in time of crisis.,In this paper, the authors apply DEA–bootstrap method on a large sample of Arab MFI with special look at the peer group differences. Unlike most previous relevant studies, the paper overcomes many of the drawbacks of the DEA method by using, in addition to the DEA–bootstrap approach, a test of return to scale and a combination of three procedures to detect outliers. Furthermore, this paper analyses the efficiency of MFI in the MENA region in the light of financial crises and Arab Spring.

Drivers of trust and trustworthiness

Abstract: Purpose The purpose of this paper is to contribute to the understanding of why people act trustworthily in anonymous non-repeated meetings where trustworthiness benefits the trustor and runs against the trustee’s material self-interest. Design/methodology/approach The paper uses a survey originally developed by Bicchieri et al. (2011). The survey makes it possible to explore whether trustworthiness has a normative element. Is there a norm of trustworthiness that inflicts punishment for disobedience? Findings The participants in the experiment strongly believe that most people will punish untrustworthy behavior, lending support to the idea that trustworthiness is norm driven. The data provide little evidence for a parallel norm of trust. Originality/value The theory of repeated games explains how trust can emerge among players in ongoing interactions. But why do people choose to trust others who they do not know in non-ongoing interactions? The results offer an explanation. When trustors are aware that trustworthiness is rooted in norms, they have reason to expect trustees to act trustworthily. Then, it makes sense to trust since trustors will benefit from their trusting.

The hierarchy of resource use for a sustainable circular economy

Abstract: The original principles of the hierarchy of resource use seem to have been forgotten. The purpose of this paper is to address the necessity of these principles in order for a circular economy (CE) to be sustainable.,This is a general review paper explaining today’s shortcomings in a CE and in the waste hierarchy. Its theoretical contribution is illustrated using the example of marine plastic waste in the Arctic, as well as the EU’s action plan for a CE: “Closing the loop”.,There is a need to reduce raw materials into the economy directly and not only as a potential result of recycling. This is supported theoretically and by illustrating that the EU’s action plan is closing the loop primarily from the output side.,The theoretical possibility of complete recycling rests on a premise that is now at odds with a sustainable development.,The power of existing raw material production cycles must be challenged to allow reduction to be a real option. If not, a CE may exacerbate a moral trade-off by the current generation reducing the safe operating space of future living beings.,The theoretical possibility of recycling everything, also known as the technology-optimist view, has played the role of a safety net for humanity. As we are now exceeding planetary boundaries for a safe and just space for humanity, this theoretical safety net is no longer valid. Instead, we must reinforce the basic principles of the hierarchy of resource use.

Do remittances promote human development? Empirical evidence from developing countries

Abstract: The purpose of this paper is to analyse the impact of remittances on human development in developing countries using panel data from 1980 to 2014 and to address the critical question of whether the increasing trend of remittances has any impact on human development in a broad range of developing countries.,Usual panel estimates, such as pooled OLS, fixed or random effects model, possess specification issues such as endogeneity, heterogeneity and measurement errors. In this paper, we, therefore, apply dynamic panel estimates – System generalised method of moment (Sys-GMM) developed by Arellano and Bond (1991) and Arellano and Bover (1995). This estimator is able to control for the endogeneity of all the explanatory variables, account for unobserved country-specific effects that cannot be done using country dummies due to the dynamic structure of the model (Azman-Saini et al., 2010).,The effect of remittances is statistically significant with positive coefficients in developing countries. The significant coefficient of remittances means that, holding other variables constant, a rise in remittance inflows is associated with improvements in human development. A 10 per cent increase in remittances will lead to an increase of approximately 0.016 per cent in human development. These findings are consistent with Ustubuci and Irdam (2012) and Adenutsi (2010), who found evidence that remittances are positively correlated with human development.,The paper considers implications for policymakers to justify the need for more effective approaches. Policymakers need to consider indicators of human development and to devise public policies that promote income, health and education, to enhance human development.,The question of whether remittances affect human development has rarely been subject to systematic empirical study. Extant research does not resolve the endogeneity problem, whereas the present study provides empirical evidence by utilising dynamic panel estimators such as Sys-GMM to tackle the specification issues of endogeneity, measurement errors and heterogeneity. The present study provides a benchmark for future research on the effect of remittances on human development.

Exploring the link between climate change perceptions and adaptation strategies among smallholder farmers in Chimanimani district of Zimbabwe

Abstract: The purpose of this paper is to establish the association between smallholder farmer perceptions toward climate change and adaptation strategies at the household level in Chimanimani District of Zimbabwe.,Data were collected from 284 households mainly using a structured questionnaire. The Heckman probit selection model was used to first identify the underlying socio-economic factors that affect households’ recognition of climate change in the past 10 years, and the second model the factors that influence adaptation to the climate change phenomenon.,The majority of farmers (85 percent) perceived that climate change, characterized by rising temperatures and variability in rainfall patterns, has been occurring in the past ten years. As a response, farmers adapted using methods such as manuring and staggering of planting dates. Indigenous knowledge systems and non-governmental organizations increased the likelihood farmers’ recognition of climate change (p<0.05). The probability of adopting multiple adaptation strategies was influenced by household head’s education level, land tenure and access to public extension services.,Integrative extension methods that take into account socio-cultural values could be helpful in building resilience as farmers are better able to understand the climate change construct. There is a need to guarantee land tenure rights in resettlement areas to stimulate investment on farms.,This study showed that there is a link between farmers’ prior knowledge of climate change and the number of adaptive investments. The analysis proposed an educational and extension approach that is embedded in the socio-cultural and traditional setting of farmers.

Does foreign aid help alleviate income inequality? New evidence from African countries

Abstract: Purpose The purpose of this paper is to examine the relationship between foreign aid and income inequality (IIQ) reduction for 16 African countries using unbalanced panel data covering the period 1990–2011. This paper attempts to answer the critical question: does foreign aid lead to IIQ reduction? Design/methodology/approach To examine the effect of foreign aid on IIQ, this paper uses an RE model with robust OLS regression and system-GMM estimator, which are useful in dealing with the endogeneity problems. Findings Results of RE model indicate that foreign aid, foreign direct investment, trade openness as well as corruption have a positive and statistically significant effect on IIQ. Government spending and inflation have a negative and statistically significant effect on IIQ, while GDP per capita growth has a negative but statistically insignificant relationship with IIQ. The results are robust by using system-GMM dynamic panel model which confirms that the coefficients of all considered variables remain same sign and significance. Research limitations/implications This study implies that an increase in foreign aid is associated with an increase in IIQ. As an effective strategy to foreign aid, this paper suggests that improving of financial sector development, and institutional quality and policies can reduce income inequalities and stimulate economic growth. Originality/value This paper is the first of its kind to empirically explore the relationship between IIQ and foreign aid measured here by net aid transfers as a share of GDP in African countries, using modern econometric techniques, time period and a variety of control variables.

Inclusiveness and effectiveness of agricultural cooperatives: recent evidence from Ethiopia

Abstract: Using a recent rural farm household survey, the purpose of this paper is to investigate inclusiveness and effectiveness of agricultural cooperatives in Ethiopia.,The study employs a logit model to examine inclusiveness and an endogenous switching regression (ESR) model to evaluate the effectiveness of agricultural cooperatives.,The results show that agricultural cooperatives are less inclusive of land-poor and illiterate households. On the other hand, the estimated results indicate that cooperatives effectively improved agricultural performance and welfare of its member households – i.e. membership in cooperatives increases yield and income by 1.37 quintal/hectare and 1,804 birr, respectively. Moreover, the result shows that marketing cooperatives effectively increased marketed surplus of their members by 34 percent.,The study has important implications regarding the ways to improve the effectiveness and/or inclusiveness of agricultural cooperatives.,While accounting for the collective behavior of cooperatives, this study uses multiple outcome variables in examining the effectiveness of cooperatives in Ethiopia. Furthermore, this paper employs the ESR model and accounts for potential problems in estimating impact using non-experimental data.

Fertility, education, and female labour participation: Dynamic panel analysis of ASEAN-7 countries

Abstract: The purpose of this paper is to examine the relationship among fertility, female education and female labour participation in ASEAN-7 countries: Malaysia, Indonesia, Brunei, Myanmar, the Philippines, Vietnam and Thailand, between 1990 and 2015. The choice of these countries is informed by their economic, social and political importance in the ASEAN Bloc; while Indonesia boasts of the largest population in ASEAN, Brunei and Malaysia boast of relatively advanced economies, in GDP terms.,Pesaran’s test of panel unit root in the presence of cross-sectional dependence was employed to test for the stationarity properties of the series. The dynamic long-run coefficients of the variables were examined using the pooled mean group, common correlated effect and dynamic OLS techniques, while the Granger causality test was used to estimate the direction of causality among the variables.,The findings indicate that there is both negative and positive relationship between fertility and labour force participation, with causality running from labour force participation through fertility – on the one hand, and between education and labour force participation, with no causality between the two – on the other hand.,The study, therefore, upholds the role incompatibility and societal response hypothesis, as well as human capital and opportunity cost theories.,The appropriate policies are those that gear the countries’ fertility decisions towards the societal response hypothesis in order to enhance human capital development and increase productivity. This implies that the governments of ASEAN-7 countries should ease hindrances on a balanced combination of family-care and workforce participation on married women in view of the gender-wage gap created by female work apathy, which largely reduces domestic productivities. Appropriate policies in this direction include rising availability and affordability of childcare facilities, incentives for women higher education, attitudinal changes towards job-participating mothers, as well as legislated paid parental leaves which have balanced the, hitherto, incompatibility between work and childbearing.,Except for Abdullah et al. (2013), the authors have no knowledge of other authors who have worked on this relationship in the chosen ASEAN countries. This study is, however, an improvement upon that of Abdullah et al. (2013) in different ways, one of which is that it considers seven ASEAN countries, thus making the results more valid representation of the ASEAN Bloc. Furthermore, the Pesaran (2007) technique of unit root testing has not been found in any recent literature on the subject-matter. This technique, being a second-generation test, tests variable unit root in the presence of cross-sectional dependence.

Does credit access lead to expansion of income and multidimensional poverty? A study of rural Assam

Abstract: The purpose of this paper is to evaluate the impact of credit access on income and multidimensional poverty by providing an econometric framework,The study is conducted in Assam, India and uses a quasi-experiment design to gather primary data Econometric tools like Heckit procedure, Tobit selection equation and probit model are used for empirical purpose,The paper finds that the level of individual welfare is influenced by equivalent factors In addition, the study observes a larger incidence of poverty among treatment households of semiformal and informal borrowers The study argues that formal sources are more effective in reducing the number of poor households by lifting those who are closest to the poverty line,The study indicates a vicious circle of income and multidimensional poverty among semiformal and informal borrowers By tradition, as rural Assam gets a dominant role of traditional community-based financial institutions, we should develop the banking structure by involving these institutions The study excludes other probable explanatory variables while evaluating the impact of credit access on income and multidimensional poverty, and this limitation is left to future research,This is probably the first empirical paper in Assam showing the impact of credit access on multidimensional poverty by adjusting for endogeneity and selection bias

Inter-linkages between remittance and savings in Ghana

Abstract: Purpose The increase in volumes and circulation of internal and international remittances have become a substantial part of resource flow for economic development especially in developing countries with a significant impact on household welfare. The purpose of this paper is to examine the relationship between remittances and savings mobilization. Design/methodology/approach Using the most recent wave of the Ghana Living Standard Survey data, the study accounts for the endogeneity in remittance receipts by employing treatment effect estimators, in addition to a probit model to establish the relationship between remittances and likelihood of savings. Findings The results suggest that receiving remittances significantly affects household’s propensity to save. Households that receive international remittances seem to have a slightly higher probability of savings compared to households that receive only domestic remittances. Originality/value From the literature, whereas the theoretical relationship between savings and remittances is mixed, it is also evident that the empirical relationship between remittances and savings has not been clearly established, especially in sub-Saharan African countries in general and Ghana in particular. The present study adds to the paucity in the literature in two main ways. First, the study provides empirical evidence on the relationship between remittances and savings by not only focusing on international remittances but also on internal remittances. Second, in sharp departure from other studies, the current study employs more robust empirical estimators in estimating the relationship between remittances and savings.

Effect of off-farm income on multi-dimensional poverty among rural farm households in Nigeria

Abstract: The purpose of this paper is to analyze the effect of the different components of off-farm income on multi-dimensional poverty. Furthermore, the study aims to measure multi-dimensional poverty and also identify the determinants of multi-dimensional poverty in Nigeria. The paper reveals the different contributions of the dimensions of education, health and living standard.,The study focuses on rural farm households in Nigeria. Data are obtained from the Nigeria General Household Survey, 2013. The survey covers both urban and rural areas of the 36 states of Nigeria. Owing to the interest of this study in the rural farm household’s sub-sector, a nationally representative sample of 836 rural farm households are selected for the study after the data merging process. Rural farm households in this paper earn 50 percent of their total income from crop and livestock production. The paper employs the Multi-dimensional Poverty Index (MPI) to measure multi-dimensional poverty across the six different geographical zones of Nigeria. The probit regression model is used to estimate and analyze the effect of off-farm income components on multi-dimensional poverty and also to identify the determinants of multi-dimensional poverty.,The results of the study show that among the off-farm income components, the non-farm wage income and non-farm self-employment income have negative association with multi-dimensional poverty. Findings show that multi-dimensional poverty is high in Nigeria with deprivations in health contributing the most. Northern Regions have a higher estimate. Results reveal that sex, age, number of adults, formal credit access, access to extension services and location characteristics are key determinants of multi-dimensional poverty. The MPI for Nigeria averaged 47 percent. Across regions, deprivation in the health dimension contributes about 44 percent to multi-dimensional poverty. Deprivation in living standards contributes 40.5 percent, while deprivation in education contributes 15.5 percent to multi-dimensional poverty.,Due to the nature of the data used, the health indicators (nutrition and child mortality) are absent but proxies are used instead. Future research could introduce gender dimensions.,Improving the involvement of rural farm households in non-farm self-employment sector could improve their livelihoods and prevent migration to urban centers, especially among the youths.,Improving the quality of health, education and living standards will lead to lower poverty levels in Nigeria. Farmers can best reduce their multi-dimensional poverty by engaging in more off-farm jobs.,This paper provides information to policy makers on the effect of different components of income from the off-farm sector on multi-dimensional poverty alongside with the determinants of multi-dimensional poverty at a national level for the rural farm households. By using MPI, the contribution of the different dimensions used in computing the MPI across the six geographical regions within the country is revealed. This provides policy makers with more information for development purposes.

Does inward remittance lead to export performance in South Asian countries

Abstract: The purpose of this paper is to empirically investigate whether inward remittance leads to export performance in selected South Asian economies over the time period of 1993–2017.,The stationarity of the variables is checked by Levin, Lin and Chu t, Breitung t-stat., Im, Pesaran and Shin W-stat., ADF–Fisher and Philips–Perron–Fisher panel unit root tests. Panel Granger Causality is used to verify the short-run causality. Pedroni’s, Kao’s and Johansen–Fisher panel cointegration approaches are employed to examine the long-run relationship among the variables. Panel VECM is used to confirm the existence of a long-run relationship among the variables.,Panels FMOLS and DOLS show that remittance inflows have negatively impacted the export performance of the selected South Asian countries during the study period. Granger Causality and VECM test confirm the existence of short-run and long-run relationship among the variables. The authors conclude that inward remittance is affecting export performance negatively during the study period. Furthermore, inward remittances occupy a major source of development finance for selected South Asian countries.,The study uses a dynamic macroeconomic modeling framework to assess the inward remittance on export performance in South Asian countries. Taking into account the diversity of the level of growth experienced by the five countries in the Asian region, the study uses an appropriate regression technique, i.e. panel dynamic OLS whose results are robust. As exports are a proven way to further economic growth, this study fills a vital gap in the literature by ascertaining the degree of impact of remittances in influencing outbound exports from the South Asian region.

Who suffers from food insecurity in Indonesia

Abstract: The purpose of this paper is to clarify the socioeconomic determinants of household food insecurity in Indonesia using individual household data obtained from the 2015 nationwide household socioeconomic and expenditure survey called Survei Sosial Ekonomi Nasional.,A stereotype logistic regression model is applied to detect factors determining household food security.,The results from the cross-analysis between calorie consumption and share of food expenditure to total household expenditure (Engel coefficient) indicate that 20.8 percent of households were in the “food insecure” category, 21.5 percent in the “lack of food” category, 26.6 percent in the “vulnerable” category and the remaining 31.2 percent in the “food secure” category.,The main limitation relates to the data set because the collection was conducted in March 2015. Furthermore, the analysis is restricted because of the limited availability of information on socioeconomic factors of respondents. Further research based on the latest data set with more detailed information on respondents is necessary to deepen the discussion.,Researchers have not specifically discussed the factors determining household food security in Indonesia using reliable nationwide household survey data. The estimation results clearly indicate that a household fulfilling one or more of the following conditions is more likely to be in the “food insecure” category: many members, low education level of household head, divorced household head, household head is a smoker, household head engages in agriculture or construction work and residence is in rural or backward regions.