Showing papers on "Physical capital published in 2022"

The effect of higher capital requirements on bank lending: the capital surplus matters

Abstract: The existing literature has displayed mixed results in terms of the relationship between tighter bank capital regulation and lending, which may be due to poor approximation of capital requirements. We emphasise the crucial role of the excess of bank capital over the minimum capital requirement, the capital surplus, in the transmission of more stringent capital regulation. Specifically, we explore the effect of higher capital requirements on bank credit growth in the Czech Republic, drawing on a unique confidential bank-level dataset. Our results indicate that higher additional capital requirements have a negative effect on the credit supply of banks maintaining lower capital surplus. We estimate the effect on annual credit growth to be between 1.2 and 1.8 pp, using a wide range of model specifications and estimation techniques. Furthermore, the relationship between the capital surplus and credit growth proves to be significant also at times of stable capital requirements, i.e., the capital surplus does not serve only as an intermediate channel of higher capital requirements.

Intangible Capital and Modern Economies

Abstract: The production of goods and services is central to understanding economies. The textbook description of a firm, typically in agriculture or manufacturing, focuses on its physical “tangible” capital (machines), labor (workers), and the state of “know-how. ” Yet real-world firms, such as Apple, Microsoft, and Google, have almost no physical capital. Instead, their main capital assets are “intangible”: software, data, design, reputation, supply-chain expertise, and R&D. We discuss investment in these knowledge-based types of capital: How to measure it; how it affects macroeconomic data on investment, rates of return, and GDP; and how it relates to growth theory and practical growth accounting. We present estimates of productivity in the US and European economies in recent decades including intangibles and discuss why, despite relatively rapid growth in intangible capital and what seems to be a modern technological revolution, productivity growth has slowed since the global financial crisis.

Farmers’ Livelihood Capital and Its Impact on Sustainable Livelihood Strategies: Evidence from the Poverty-Stricken Areas of Southwest China

Abstract: Evaluating the influence of livelihood capital on livelihood strategies remains an unexplored strategy intended to cultivate the level of livelihood capital, enhance livelihood strategies, combine the achievements regarding a reduction in poverty, and attain everlasting poverty mitigation, along with endorsing sustainable livelihoods. Based on the survey data of 508 farmers within poverty-stricken areas of Southwest China, the entropy method was primarily used for measuring the level of farmers’ livelihood capital. Moreover, the logistic regression model was used to empirically analyze the impact of livelihood capital on the choice and transformation of livelihood strategies. The results showed the following: (1) The five categories of livelihood capital values were generally not high. The value of physical capital was the highest (0.4279), while the value of financial capital was the lowest (0.2018). (2) Physical capital, alongside natural capital, has a positive influence on the pure agriculture livelihood strategy, while human, social, and financial capital have a positive impact on the non-agriculture livelihood strategy. Excluding financial capital, the remaining types of capital have a positive impact on the part-time agriculture livelihood strategy. (3) Decisive factors are used to promote transformation from pure agriculture to part-time agriculture, mostly comprising social network support and family labor force, among other indicators. The important factors used to promote transformation from pure agriculture to non-agriculture are mainly labor education level and social network support, among other indicators. Finally, on the basis of the above findings, policy sanctions are proposed from the observations of livelihood capital and livelihood strategies.

Are Energy Endowed Countries Responsible for Conditional Convergence

Abstract: We examine the relationship between fossil fuel (FF) endowments and economic convergence. Countries with plausibly exogenous FF endowments show patterns of convergence, as indicated by standard convergence tests. By contrast, we fi nd no evidence of convergence among countries without FF endowments. These patterns of convergence are consistent across measures of physical capital, human capital, and total factor productivity. We discuss the implications of this result for economic development and comment on its implications for global climate policy.

Transformation of economic processes on the basis of digitalisation

Abstract: The main task of our study is to justify the primary directions of transformation of economic processes on the basis of digitalisation. Nowadays, the digitalisation of the economy in the global economic environment is considered a priority model of global innovation development. Institutional factors are particularly important in the conditions of transformation of economic processes on the basis of digitalisation. They form the fundamental parameters of the long-term functioning of economic systems. It is determined that the role of institutional factors in ensuring economic development is multifaceted as they affect its duration and quality. These factors can be divided into formal and informal. We have systematised the influence of formal and informal institutional factors on the transformation of economic processes. It is found that the inability of the Ukrainian institutional system to ensure effective economic development demonstrates the institutional traps. Negative manifestations of this system hinder the positive directions for the transformation of economic processes, modernisation of the economy, and competitiveness. It is justified that the transformation of management economic processes should be based on the implementation of the proposed system of principles, the use of which will identify and solve a set of problems of social development of the region, which meets the challenges of our time. To create an effective system of interaction between corporate and regional participants, it is necessary to link their goals, to harmonise them with the goals of socio-economic development of the region. This is where digitalisation can help. It is determined that in modern conditions, the problems of the digital sector affect the competitiveness of the economy, as the lag in obtaining and processing relevant data, the inability to use digital resources are accompanied by the loss of former market positions. From the standpoint of the theory of asymmetry of international trade, the digital dependence of one country on another leads to an increase in the gap in economic development between these countries. The rapid development of information and computer technologies and the active Internet penetration into all spheres of human life have led to the transformation of economic processes according to the level of digitalisation. The development and dissemination of key technologies underlying the digital economy have a decisive impact on the transformation of globalisation: they directly affect the production of goods and services, human resources, investment in human and physical capital, foreign direct investment, international technology transfer, industrial innovation. In essence, all this directly affects the efficiency of production, performance, competitiveness, and economic growth – from individual market participants to countries, regions, and the world economy as a whole.

Human capital accumulation and economic growth of Ethiopian economy

Abstract: Economic theory, empirical studies and public policy have underlined the importance of the relationship between human capital accumulation and economic growth. Several developing countries have included human capital development as an integral part of their national development plans and have devoted huge financial resources as a cornerstone to promote economic growth. The purpose of this study is to examine the long-run effects of human capital accumulation on the economic growth of a developing economy using evidence from Ethiopia. The study employed the human capital theory of economic growth and the augmented Solow-Swan model as a theoretical framework, and the ARDL bounds co-integration and error correction mechanism for parameter estimation. Time-series data, covering the period 1980/81 to 2019/20, were employed to examine the long-run relationship between economic growth and its dynamic regressors of human capital indicators. The secondary and tertiary educational attainments of the labour force and life expectancy at birth have a significant positive effect on economic growth of Ethiopia, whereas primary education attainment and adult mortality rate have an insignificant negative effect. On the other hand, physical capital accumulation has positively contributed the country’s economic growth, but trade openness and external debt adversely affect it. Thus, it is suggested that the policymakers should strengthen the country’s institutional capacity while increasing the number of healthy members of the labour force that should also be equipped with quality-based educational attainments.

Economic Freedom, Capital, and Growth: Evidence from the States

Abstract: Hall et al. (2010) develop a growth model where the allocation and productivity of human and physical capital depend on the quality of institutions in a country. We apply their model to the US states from 1980 to 2000. Using the Economic Freedom of North America as our measure of institutional quality, we find evidence that increases in human capital lead to increases in output per worker only in states with average EFNA scores above 5.91. Physical capital, unlike in the cross-country case, always has a positive effect on output per worker.

Access to credit and physical capital stock: a study of non-farm household enterprises in nigeria

Abstract: This study investigated the influence of access to credit on the physical capital stock of non-farm household enterprises in Nigeria. The study used the binary logistic regression technique and Nigeria’s 2018-19 General Household Survey data (Wave 4). We find that the influence of access to credit on the physical capital stock of nonfarm household enterprises in Nigeria is positive and significant. This implies that access to credit enhances the capacity of these enterprises to procure physical capital stock. Our results also indicate that expenditure on raw materials, profit, and years of operations are other key drivers of physical capital stock accumulation. Consequently, we conclude that there is a need for policies to enhance access to credit by non-farm household enterprises in Nigeria to strengthen their operations on a sustainable basis.

Does intellectual capital matter to MFIs’ financial sustainability?

Abstract: PurposeThis paper examines the effect of intellectual capital (IC) on the financial sustainability of microfinance institutions (MFIs). The study is motivated by the increased calls for MFIs to be self-sustainable and the growing importance of knowledge-based assets as contributors of competitive advantage and sustained performance.Design/methodology/approachWith a global sample of 444 MFIs and data for 2013–2018, which yielded 2,664 MFIs-year observations, this study examines the effect of IC on MFIs’ financial sustainability. The data are extracted from the MIX Market database. Value added intellectual capital coefficients are used as proxy measures of IC. Operational self-sufficiency is used to measure financial sustainability. Data are analyzed using three-panel data estimation models: the fixed effect, the random effect and the dynamic panel system generalized method of moments.FindingsThe results show that human capital efficiency and capital employed efficiency have a positive and significant effect on the financial sustainability of MFIs. However, structural capital efficiency has a significantly negative effect on financial sustainability. These results confirm the relative importance of both tangible and intangible assets as important positive contributors of financial sustainability of MFIs.Research limitations/implicationsThe paper focused on the association between IC and financial sustainability of MFIs. Therefore, examining nonfinancial institution may validate the contributions of this study.Practical implicationsBased on the findings, MFIs’ managers are encouraged to leverage IC, physical and financial capital to attain financial sustainability. In particular, MFIs should invest in employees training and development. Additionally, owing to the positive relationship between physical capital and financial sustainability, there is need for policy interventions to ensure MFIs access adequate funding. The study further recommends mandatory disclosure of IC among MFIs.Originality/valueThis is the first paper to investigate the relationship between IC and the financial sustainability of MFIs using panel data and a global sample of MFIs; therefore, it lays an empirical ground for future studies.

Economic Assessment of Regional Human Capital

Abstract: Sustainable regional development should consider the state and improvement of the quality of regional human capital. To this end, the present study focuses on economic assessment of human capital. Additionally, the research analyses the definitions of the “human capital” category, as well as approaches to identifying its composition and structure. After examining various economic assessment techniques, a definition of regional human capital was proposed. The cost approach was chosen as the most suitable tool for the economic assessment of human capital at the regional level. For economic valuation, the study uses a method developed by Chigoryaev and co-authors, including a number of theoretical and methodological modifications that take into account regional specificities. According to the assessment results, the total human capital in Kamchatka krai exceeded 191 billion roubles, of which more than 104 billion accounted for the fixed human capital. The constant growth of human capital in the period 2011–2018 was noted. Simultaneously, the share of the fixed human capital in the overall structure has been steadily increasing. The values of the chain growth rate of the operating human capital ranged from 1.0 to 1.06, while the values of this rate of the fixed human capital ranged from 1.14 to 2.05. A comparative analysis of the ratio of the total human and physical capital showed the presence of an imbalance: the share of human capital was gradually increasing and reached 37.5 % in 2018. The obtained results can be used to create strategic and programme documents in the field of regional socio-economic development. The modified method of Chigoryaev and co-authors can be applied for the valuation of regional human capital in other studies.

Improving company value: the role of human capital, structural capital, capital employed, investment decisions, and manager's attitude to risk

Abstract: Various studies show that companies and organizations have realized that knowledge-based capital is an important company asset. Managing the company's knowledge-based capital is one of the important tasks to encourage companies to compete with other companies. This study aims to identify the knowledge-based capital in human capital, structural capital, and capital employed by companies and its effect on investment decisions that affect company value. Through literature review, this concept also incorporates managers' risk attitude, which is part of ERM (Enterprise Risk Management) to develop the concept of Knowledge-based Risk Management (KBRM). Based on path analysis using AMOS, the result shows direct influence of human capital and capital employed on investment decisions is not significant. Meanwhile, the direct influence is significant. Investment decision does not mediate the relationship between human capital, structural capital, and capital employed on company value. Furthermore, managers' attitude to risk as risk-averse weakens the relationship between investment decisions and company value. Based on that result, companies need to reconsider managers’ behaviour in facing risks so that managers able to take risks when deciding on investments in the future and increase the value of the company.

The empirics of economic growth over time and across nations: a unified growth perspective

Abstract: Abstract This research develops an expanded unified growth theory that incorporates the endogenous accumulation of physical capital, population, human capital, and technology. The model incorporates a complementarity between physical capital and human capital and can be extended to a multi-country setting with international technology diffusion. The analytical characterization of the mechanisms behind the observed patterns of long-run growth and comparative development delivers a consistent explanation for a large set of seemingly unrelated empirical facts. A quantitative multi-country version of the model matches various empirical regularities of long-run growth dynamics and comparative development patterns that have previously been studied in isolation. The findings also shed new light on the role of the demographic transition for convergence patterns, the specification of cross-country growth regressions, technology spillovers, and the secular stagnation debate.

Mathematical Modeling of Physical Capital Diffusion Using a Spatial Solow Model: Application to Smuggling in Venezuela

Abstract: This study proposes a mathematical modeling approach for the physical capital diffusion through the borders of countries. Physical capital is considered a crucial variable for the economic growth of a nation. Here, we use an extension of the economic Solow model to describe how smuggling affects the economic growth of countries. In particular, we focus on the situation in Venezuela from 2012 to 2015. In this regard, we rely on a nonconcave production function instead of the classical Cobb–Douglas production function. Moreover, we investigate the effect of different physical capital fluxes on economic growth. The physical capital diffusion through the borders of a country is modeled based on a parabolic partial differential equation describing the dynamics of physical capital and boundary conditions of the Neumann type. Smuggling is present at numerous borders between countries and may include fuel, machinery, and food. This smuggling through the borders places challenges on a particular country’s economy. The smuggling problem usually is related to a non-official exchange rate different from the official rate or subsidies. We study the effect of smuggling on the physical capital of a country using an extended Solow model. Numerical simulations are obtained using an explicit finite difference scheme describing how the physical capital diffusion through the border of a country affects its economic growth. The study of physical capital is a paramount aspect of the economic growth of several countries. The results show that when boundary conditions of Neumann type are different from zero, the dynamics of the physical capital differ from the classical economic behavior observed in the classical spatial Solow model without physical capital flux through the borders of countries. In particular, the numerical results show that the physical capital of a country decreases faster as the flux increases on the boundaries. Thus, we can conclude that avoiding smuggling through the frontiers is a crucial factor affecting economic growth.

Peculiarities Of Speculative Operations On The Capital Market In Ukraine

Abstract: The article is devoted to substantiation of the concept of capital market, research of its structure, features and principles of functioning. It is substantiated that in the market system of relations the corporate sector needs access to external sources of financing to ensure its expanded reproduction because its own financial resources are usually insufficient, which is due to the tendency to accelerate the recovery of factors of production due to global trends. high technological ways. The author emphasizes that the economic essence of the capital market is manifested in its specific functions, which it performs (redistribution, accounting, concentration of capital, reproduction process) and general market functions (pricing, market intermediation, transaction cost optimization, information). It is proved that the key criterion for determining the capital market is the relationship of functions related to the redistribution of capital between market participants and the transformation of capital from savings to investment. It is established that the relationship between market participants is determined by the term of circulation of securities or the term of loan capital, as well as the purpose of borrowed financial resources. Because the determining criterion for classifying financial instruments in the money market or capital market will not be the term of circulation of the financial instrument, and the purpose of attracting financial resources. It is proved that the speculative capital market is a set of economic relations, financial mechanisms and instruments by which the supply of capital is formed by transforming it from savings to investment in order to ensure reproductive processes.

Impact of intellectual capital on profitability, market value, and productivity of the listed banks: evidence from bangladesh

Abstract: This study examined the impact of intellectual capital and its elements (e.g., human capital, structural capital, and capital employed) on the profitability, market value, and productivity of all 30 publicly traded banks listed on the Dhaka Stock Exchange in Bangladesh. The study used unbalanced panel data with 146 observations for the period 2016–2020. Data was collected from the annual reports and the websites of the corresponding banks, as well as from the website of the Dhaka Stock Exchange. Multiple panel data regression models were employed to test the hypotheses studied. Intellectual capital was measured by the value-added intellectual coefficient (VAIC). This study found that banks with higher intellectual capital generated higher profits but lowered productivity; however, intellectual capital did not contribute to enhancing market value. Regarding the impact of subcomponents of intellectual capital, the study revealed that the human capital of the banks being examined enhanced profits but lowered productivity, with no impact on market value. Surprisingly, banks with higher structural capital had lower profitability but no influence on their market value or productivity during the study period. While capital employed was not found to affect the profitability, market value, or productivity of the sample banks in Bangladesh. The findings of the study suggest that the listed banks in Bangladesh failed to exploit intellectual capital well enough to gain a competitive advantage.

Multilevel human capital assessment system

Abstract: Human capital in any organization is one of the key assets. But not many managers are able to assess human capital in financial terms, as well as determine the financial value of this asset. Most of the organization’s human capital is made up of labor. The amount of this capital is also influenced by the management of human capital itself and culture.

Analysis of the Difference in Changes to Farmers’ Livelihood Capital under Different Land Transfer Modes—A Case Study of Manas County, Xinjiang, China

Abstract: Farmers’ livelihoods alter as a direct result of land transfer. This study examined the impacts of land transfer on several indicators of farmers’ livelihood capital, as well as variations in the effects of different land transfer methods on farmers’ capital, in an effort more effectively to enhance farmers’ livelihoods. To compare the changes in farmers’ livelihood capital under four different modes—the farmers’ spontaneous model, centralized and continuous, joint-stock cooperative, and leaseback and re-contracting—this study calculated farmers’ livelihood capital index based on 600 questionnaires in accordance with the sustainable livelihood capital framework. The study’s findings indicate the following outcomes: (1) Farmers’ livelihood capital is significantly impacted favorably by land transfers. (2) Different types of farmers experienced different changes in their livelihood capital after land transfer: purely agricultural farmers’ livelihood capital value increased by 0.138, primarily due to an increase in physical capital; agricultural part-time farmers’ livelihood capital value increased by 0.105; non-agricultural part-time farmers’ livelihood capital value increased by 0.081; and non-agricultural farmers’ livelihood capital value increased by 0.081. (3) The most efficient strategy to increase livelihood capital was to use the leaseback and recontracting model with “village collective + planting leadership company” as the primary business organization. The results provide practical guidance for land transfer in Manas County, and valuable suggestions for improving farmers’ livelihoods in arid areas.

Economic Value of Tourism Through Human Capital Gains

Abstract: Leisure tourism can be analyzed as a mechanism to rebuild human capital depleted by work. Human capital is an essential input to human economies, and possesses a corresponding economic value. Therefore, tourism possesses an economic value additional to expenditure and multipliers, which can be seen as investments in increasing human capital as an asset. Calculating the financial value of human capital gains is likely to prove a more powerful political tool for the tourism sector, than current political perceptions as discretionary leisure.

Impact of Human Capital and Social Capabilities on Economic Growth of Pakistan: A Time Series Analysis

Abstract: Theoretically, human capital has a significant relationship with economic growth. In this regard, the present study was conducted to determine the conditions that have a significant and positive relationship with economic growth. The main objective of the study was to explore the impact of human capital and social capabilities or skills on the economic growth of Pakistan. The study estimates the impact of human capital and social capabilities on economic growth of Pakistan by using time series data from the period of 1980-2018 taken from World Bank. Autoregressive distributed lag framework is used for the valuation of variables relationship and direction of connection of variables. Human capital influenced by education expenditure, social capabilities, gross fixed capital formation (GFCF) and children mortality. This study indicates the role of human capital in growth and development of Pakistan. Results showed that health and education are the two main sectors which need significant attention of government. In addition, more investment on human capital can increase the social capabilities. Final consumption expenditure depends on current economic conditions of a nation. Results showed progressive human capital influence economic growth due to social capabilities. These objectives can be attained through sharing the suitable amount of GDP to these sectors.

Climate Policy and Wealth Distribution

Abstract: We set up a model with intergenerational bequest transfers and climate damage on the wealth of heterogeneous households. We show that, under credit market imperfections and depending on wealth distribution across households, a balanced budget climate policy may widen the wealth inequality gap between the rich and poor. Climate policy may create positive effects on the wealth of households, but these effects are asymmetric across households in terms of both magnitude and the transmission of gains from a climate policy within households. The gains of the poor from a climate policy are mainly transmitted into improving living standards and the investment in human capital due to the higher marginal return to education investment. By contrast, the gains of the rich from a climate policy are transmitted biasedly into physical capital accumulation and thereby enhance their monopolistic position in the production of intermediate inputs. We show that, for any climate policy, there exists a corresponding threshold of aggregate physical capital. When the aggregate physical capital of the economy exceeds this threshold, the corresponding climate policy may widen the intergenerational bequest transfers among heterogeneous households, thereby contributing to widening the wealth inequality gap between the rich and poor.

Empirical Analytics of SAARC vs ASEAN in Perspective of Economic Growth and Capital Accumulation

Abstract: It is an empirical exercise to build the connection between investment in human/ physical capital and economic growth. A panel data set is targeted by considering twelve selected SAARC and ASEAN economies for the period 2005-2019. To get the empirical findings a unit root analysis is made for data stationarity; the Fully Modified Ordinary Least Square (FMOLS) method is taken in practice to find the association of the investment in human/physical capital with economic growth. Moreover, the Pedroni test is used to examine cointegration among the regressors as well as explained variables. The research outcomes highlight that the investment in the human and physical capital formation through education/health expenditures and gross fixed capital formation plays a noteworthy part in economic growth in SAARC and ASEAN economies separately and overall. Moreover, the inflationary trends and the labor force participation rate have their significance for determining economic growth. The trade volume is a significant force for the economic growth until the export proportion will be greater than imports. In a policy outlook, there is a need to enhance the fiscal budget for the health and education sector that will ultimately enhance the economic growth of the concerned economies.

The Economy of Indonesia: Driven by Physical or Human Capital?

Abstract: This study aims to analyze whether economic growth in Indonesia is driven by physical or human capital using panel data analysis consisting of all provinces over the last nine years. The estimation results show that the Indonesian economy is more likely to be driven by physical than human capital. The formation of human capital that has a significant positive effect on economic growth is health. However, the education variable represented by the mean years schooling has no significant effect on economic growth when including the control variable in the research model. To improve the quality of education, the state requires the government to provide substantial educational spending. However, the budget has not been used optimally so that the expected achievements of graduates are not achieved. In addition, education spending has not met the criteria for quality spending. In contrast to education spending, an increase in health spending will increase economic growth by improving the quality of health and life expectancy. A healthier society will have a high level of productivity that impacts the regional and national economy.

The Impact of Human Capital on Enterprise Management

Abstract: China is the country with the largest population in the world. It has abundant human resources, but it is very scarce in terms of human capital, which is lower than that of the most developed countries. The scarcity of human capital directly affects the enterprise growth. Human capital plays a key role in the operation and development of enterprises. Giving internal employees of businesses full credit for the value of their human capital may act as a powerful engine for their growth. Human capital indicates the market’s demand for labor and the value that labor may provide to the economy, whereas human resources reflect the number and caliber of laborers in a nation. It has to do with how supply and demand on the market are changing. Investment in human resources produces human capital. This paper discussed an all-encompassing notion of human capital, as well as it’s required conditions of transformation of human resources into human capital. It also emphasizes the integration of human capital within a dynamic multi-loop nexus of social capital, learning, and knowledge management. In addition, the characteristics of human capital management in modern enterprises and the feasibility of human resource transforming into human capital were also discussed. The transformation of human resources into human capital shows that labor has played its own role in the production system. The employee is not only an important condition for enterprise growth, but it can also promote the progress of science and technology and increase the efficiency of the productivity.