This study examines the relationship between equity capital and bank lending growth in Europe and the MENA region from 2009 to 2020, following the 2008 financial crisis. The findings reveal distinct regional dynamics. In Europe, the Tier 1 capital ratio and profitability are positively and significantly associated with lending growth, reflecting a reliance on internal funding amid a well-capitalized but challenging economic environment. Conversely, GDP growth appears to be the primary factor associated with lending growth in MENA, while the Tier 1 ratio and profitability are insignificant. The study provides several policy recommendations. European banks with low capital should build reserves during economic upturns to enhance solvency and support lending, while high-capital banks should adopt strategies to manage overcapitalization and improve efficiency. For MENA banks, rebalancing loan portfolios to prioritize private-sector lending and fostering competition through enhanced regulatory measures could mitigate inefficiencies and promote economic growth. These findings underscore the need for tailored banking policies that align with regional economic and regulatory contexts.
Over a decade after the adoption of the Paris Agreement in 2015, and in the midst of what has been called the “decisive decade” for climate action, the European Union faces the challenge of achieving climate neutrality by 2050. Despite significant progress, there is considerable variability in emission reduction pathways across EU Member States due to their different stages of economic development, energy profiles and land management approaches. Our study addresses this challenge by exploring the key drivers of decarbonisation in the EU-27 Member states during the period 2000–2022 via regression clustering analysis to identify distinct clusters of EU countries based on their common characteristics and development patterns. Our analysis identified five clusters, revealing significant variability. While energy use is a dominant contributor to CO2 emissions, renewable energy consistently demonstrates a mitigating effect across most clusters. Interestingly, land management (LULUCF) exhibits a significant mitigating effect in Cluster 3 and 4 but a carbon-driving effect in Cluster 1 and 5. This approach allows us to gain more nuanced insights into the different pathways of decarbonization. The findings suggest that one-size-fits-all policy interventions may not be sufficient and call for more targeted and tailored approaches.
As financial systems evolve, ensuring equitable access to banking services remains a global priority. Deposit insurance systems (DIS), which have grown substantially in recent decades, are increasingly recognized as critical tools for promoting both financial stability and inclusion. Yet, empirical research on the link between DIS and financial inclusion is limited, especially regarding regional and income-level differences. This study addresses this gap and makes four key contributions to the literature. First, it examines the relationship between deposit insurance and financial inclusion in 143 countries and tests the robustness of this relationship across five global regions: Asia, the Middle East and North Africa (MENA), North America, South America, and Sub-Saharan Africa. Second, it explores how this relationship varies across four income categories: high-income, upper-middle-income, lower-middle-income, and low-income countries. Third, it evaluates the relative importance of deposit insurance compared to other financial inclusion drivers, using dominance analysis. Fourth, it re-examines the nexus using constructed financial inclusion indices. The results indicate that both Explicit Deposit Insurance Schemes (EDIS) and membership in the International Association of Deposit Insurers (IADI) are positively and significantly associated with financial inclusion, and rank among top drivers of financial inclusion, both globally and within most regional and income-based subgroups. These findings remain robust across multiple indices of financial inclusion. The study concludes that the strategic expansion of EDIS and IADI membership, supported by sound macroeconomic and financial sector policies, can play a substantial role in advancing global financial inclusion.
This paper examines the long-run relationship between migrant remittances and trade balance in nine EU candidate and potential candidate countries: six Western Balkan economies, together with Georgia, Moldova, and Ukraine. While remittances play a central role in household welfare, their macroeconomic relationship with trade remains theoretically ambiguous. Drawing on the New Economics of Labor Migration, the analysis explores whether remittances improve trade balance in transition economies preparing for EU integration. Using panel cointegration techniques (FMOLS and DOLS) for 2010–2023, the results reveal significant regional differences. In the Western Balkans, remittances are negatively associated with trade balance, which is consistent with a pattern in which externally financed consumption is relatively import-intensive. In Georgia, Moldova, and Ukraine, remittances are statistically insignificant, reflecting structural heterogeneity and institutional fragility. The paper thus provides the first comparative evidence on the remittance–trade nexus in EU candidate regions, with direct relevance for enlargement strategies, highlighting how different integration trajectories condition the role of migration in external balance adjustment. Policy implications underscore the need to redirect remittances toward productive investment and strengthen institutional frameworks.
For 38 OECD countries during the period 1991–2022, the paper estimates time-varying trajectories of unemployment-based and employment-based Okun coefficients and studies their synchronicity. Schlicht’s VC method is utilized to estimate Okun coefficients and time-series clustering is applied to identify groups of economies with synchronous business cycle characteristics. The findings defy two prevalent beliefs of Okun’s law since many countries display constant or almost constant trajectories of the (un)employment-output sensitivity, and for many countries Okun’s law need not be stronger in a downturn. Furthermore, countries do not synchronize in their business cycle dynamics as shown in disparate trajectories of Okun coefficients, which argues against a single one-size-fits-all stabilization policy, certainly in less homogeneous economic blocks. Finally, there is strong evidence for labour market flows into and outside the labour force that are associated with informal sector size and translated into lesser sensitivity of official labour market variables across the business cycle.
This article presents a methodology for measuring the deterioration of job quality in the Member States of the European Union through the application of Principal Component Analysis (PCA), with the aim of confirming the advance of labor precariousness across labor markets, despite the economic, productive, and institutional particularities of each country. This statistical technique allows for the construction of a composite indicator for each year which, when complemented by additional indicators derived from the average of standardized variables, facilitates the assessment of the regional impact of this phenomenon between 2007 and 2021. The comparative analysis between countries is based on data from the Eurostat Labour Force Survey, allowing for the identification of both common patterns and divergences in the evolution of job quality, while also distinguishing predominant regional trends. The results reveal significant disparities in job quality among Member States, with a high initial level of labor precariousness observed in the peripheral regions of Eastern Europe and a marked increase in precariousness across the Mediterranean economies.
Social skills are increasingly valued in global labor markets, yet their significance in the Chinese labor market has not been fully explored. This study examines the demand for specific social skills in China from the perspective of employers by analyzing job postings from 51job.com. We utilize a keyword tagging approach to evaluate job descriptions, identifying the requirement of social skills across various occupations. Our findings reveal that social skills are widely sought after by firms, with their impact on posted salaries differing among various social sub-skills. We find the presence of communication and collaboration skills does not guarantee higher salaries. Furthermore, we observe that employers often see collaboration and technical skills as substitutes. However, in specific job categories such as operations management, library services, sales, and clerical positions, communication skills complement technical skills, highlighting employers’ preference for this combination of skills in these roles.
This article analyzes the influence of deeply rooted historical factors on contemporary export diversification in developing countries. It relocates the explanation of divergent structural transformation patterns from colonial legacies to pre-colonial determinants, particularly biodiversity, defined as the historical endowment of domesticated plant and animal species that foster productive activity and human development. The analyses focus on a sample of 49 developing economies over the period 1995–2019. Ordinary least squares and two-stage least squares estimation methods applied to cross-sectional data show that countries with higher ancestral biodiversity exhibit significantly greater export diversification. We further demonstrate that this relationship operates through long-run transmission channels, notably human capital accumulation and economic growth. A series of sensitivity analyses incorporating sociocultural characteristics and other measures of biodiversity confirms the robustness of our findings. Overall, the article highlights ancestral biogeography as a fundamental but neglected determinant of export diversification, shedding new light on the deep historical origins of persistent disparities in the productive structures of developing economies.
This study examines how institutional quality, demographic pressures and structural economic factors shape female employment across 155 countries over the period 2002–2022. The analysis highlights the central role of women’s political representation and governance effectiveness in influencing female employment, while revealing substantial heterogeneity across income groups. Women’s political representation is consistently associated with higher female employment, whereas governance effectiveness supports women’s employment primarily in high-income economies and shows weaker or adverse effects in upper-middle-income countries. Demographic factors remain critical: higher young-age dependency reduces female employment, while elderly dependency is positively associated with women’s participation. Urbanisation and service-sector expansion do not consistently enhance female employment, with service-sector expansion often associated with lower female employment in lower-income contexts. Overall, the findings underscore that institutional quality and economic growth alone are insufficient to raise women’s employment without complementary policies that address care burdens, job quality and labour market accessibility.
The general objective in this article is to determine the effect of soft power on vulnerability to climate change. In other words, the effects of soft power on the capacity to adapt to climate change. Using a sample of 107 countries of cross-section data, the study adopts a triple empirical strategy; firstly, controlling heterogeneity problems using the OLS approach absorbing several fixed effect levels. Secondly, based on an evaluation of potential selection bias due to unobservable elements (Oster in J Bus Econ Stat 37: 2 187–204, 2019), the model is controlled by adding variables of various origins (geographic, historical-institutional, etc.). Third, the empirical strategy adopts a two-step instrumental variables approach to resolve plausible sources of endogeneity (Baum An introduction to modern econometrics using stata, Stata Press, College Station, 2006). At the end of the analyses, the results illustrate a negative effect of soft power on vulnerability to climate change; in other words, an improvement in the level of soft power reduces vulnerability to climate change through the level of social adaptation. More specifically, this effect is pronounced in the MENA region. The results remain robust when applying alternative approaches to controlling endogeneity, such as the Lewbel approach (J Bus Econ Stat 30:(1) 67–80, 2012), Conley et al. (Rev Econ Stat 94(1):260–272, 2012) and Kiviet (J Econom 218(2): 294–316, 2020).
This study examines subsidy retrenchment in Iran, focusing on irrigation water subsidies, the political origins of Iran’s water crisis, and the political economy of reforms. Despite significant subsidy reductions in 2010, we argue that agricultural subsidies remained due to a subsidy coalition spearheaded by constituency-embedded rural elites that leveraged electoral competition to resist cuts. Analyzing parliamentary behavior, we highlight that MPs’ decisions were swayed by agricultural elites, especially in competitive districts. These dynamics entrench underpriced irrigation inputs, lock in groundwater over-extraction, and raise the political cost of reform. This study reveals how regime maintenance, prioritizing political stability over economic efficiency, can shape policy outcomes that amplify environmental degradation.
Mineral resources play a strategic role in driving economic growth; however, the resource curse dilemma remains a persistent challenge for many developed nations. In this technological era, the emergence of artificial intelligence (AI) and financial technologies (Fintech) offers promising avenues to avert the traditional resource curse. The novelty of this research lies in the adoption of two broad Fintech proxies, namely digital lending and digital capital raising. This study investigates the impacts of AI, Fintech, and mineral resources on economic growth by applying the generalized method of moments from 2014 to 2020 in 21 developed economies. The empirical results reveal that both Fintech and AI significantly stimulate economic growth, highlighting their strategic importance. Mineral resource rents indicate a negative relationship with economic growth and confirm the resource curse hypothesis. The indirect effects show that Fintech and AI mitigate adverse economic impacts by converting the resource curse into a resource blessing. In moderating effects, digital lending shows more substantial influences than digital capital. The robustness analysis supports the estimated findings using the different panel data estimators. Overall, the study recommends the promotion of Fintech and AI adoption within the mineral resource sector to ensure sustained and inclusive economic development.
This study examines the redistributive impact of taxes and social transfers on income inequality in six Central and Eastern European countries from 2010 to 2019 using European Union Statistics on Income and Living Conditions microdata. Through inequality decomposition and marginal effect analysis, the study reveals substantial cross-country variation in redistribution effectiveness. While labor income remains the primary driver of inequality, taxes contribute more significantly to redistribution than transfers. The findings highlight the declining role of non-elderly benefits and the rising reliance on pensions, underscoring the importance of tax system design and targeted social policies in addressing inequality.
After the imposition of comprehensive trade sanctions on Russia in February 2022 by the EU, the US and a number of other economies, Russia’s imports of Western-branded goods dropped sharply. Using transaction-level import data specifying trademarks of imported goods, this paper shows that the reduction in imports was significantly higher for firms with more restrictive self-declared attitudes to serving the Russian market. These self-imposed “private sanctions” thus reinforced the effect of public sanctions. At the same time, goods under trademarks of Western firms that declared full withdrawal from the Russian market continued being imported into Russia, increasingly via traders located in neutral jurisdictions. This highlights limits to the effectiveness of private sanctions in the presence of intermediaries in neutral economies.
This paper presents a meta-analysis of the interest rate pass-through, examining the extent and the speed of monetary policy transmission. Using studies since 2017, it integrates symmetric and asymmetric estimates and applies Bayesian Model Averaging to address model uncertainty. The findings reveal significant cross-country variation in pass-through dynamics and highlight key factors that influence transmission lags, especially during post-crisis periods. The study provides robust insights into how central bank rates influence commercial lending rates, thereby contributing to a deeper understanding of monetary policy effectiveness and providing guidance for policymakers seeking to enhance the transmission mechanisms.
In this paper we estimate social mobility rates, free of measurement errors, using register data for Denmark and Sweden, 1968 to 2021. To correct for measurement error attenuation, we take ratios of the correlation of relatives at different locations in family trees, such as cousins relative to siblings. Three things emerge from these estimates. First social mobility rates in both Denmark and Sweden are much lower than conventionally estimated. Second these countries, despite their reputation for high social mobility rates, have only modestly less persistence as in modern England, or also nineteenth century England or Sweden. Finally in all the cases observed marital assortment is much stronger than conventionally estimated, and this helps explain the low rates of intergenerational mobility.
We investigate both the innovation and labor market effects of network sector regulation in a consistent framework. The estimated impact of regulation on the innovation process is based on the Community Innovation Survey and a system of equations modelling the firm’s choice of R D expenditure, propensity to innovate, and performance. We then examine the regulation and innovation impact on the labor market using the European Union Labor Force Survey. From a sample of 330,604 firms and 8,594,055 individuals over the period 1998–2016 and five countries that have undergone important reforms (the Czech Republic, Hungary, Portugal, Slovakia and Spain), we find a strong negative effect of network regulation on firms’ performance and individuals’ employment probability. According to our estimates, the overall impact of the reforms implemented would be an average increase in the employment probability of 12.8
Despite the growing international efforts, financing for adaptation in developing countries remains insufficient, fragmented, and poorly aligned with structural vulnerabilities. This paper investigates whether domestic tax revenue can serve as a more stable and effective source of financing for climate resilience. Using panel data for 129 countries and robust regression methods, we find that traditional tax revenues significantly outperform other adaptation financing tools such as climate funds and environmental taxes. Furthermore, the application of the recent Quantile-on-Quantile Regression (QQR) method reveals an asymmetric nonlinear relationship. Specifically, low levels of tax revenue could exacerbate vulnerability under low-climate vulnerability contexts, while stronger tax revenue mobilization contribute to reducing vulnerability, especially in high climate stress, and inversely. Mediation analysis further identifies four key channels through which tax revenues influence resilience, notably public expenditure, political stability, informality, and equal access to public services. Heterogeneity analyses reveal important divergences across regions, income levels, and vulnerability sectors (habitat, food, health, ecosystems). The results emphasize the central role of domestic taxation as a policy-relevant and context-sensitive source of climate adaptation finance.
New EU fiscal rules introduced in 2024 focus on reducing high debt ratios through controlling net expenditure growth. A similar spending constraint arose under the ‘Six Pack’ between 2012 and 2019 where member states that had not met their medium-term structural budgetary objective were expected to maintain net expenditure growth below that of medium-term output growth. Using a sample of 17 euro area member states, we examine the impact that this expenditure benchmark had on investment’s share of government spending and productive spending’s share during this period, accounting for the size of government debt ratios and whether countries were subject to the benchmark or not. Using both linear and quantile regression techniques, we find that high-debt member states that had not met their medium-term objective reduced their investment and productive spending ratios, while those with low debt ratios and which were not subject to the benchmark raised theirs. With the expenditure benchmark remaining as the central policy instrument under the revised EU fiscal rules, fresh commitments occurring in areas like digitalisation and decarbonisation, and high government debt ratios currently arising, the empirical analysis suggests that the new rules may act to inhibit member states’ ability to meet investment priorities in the years ahead.
Economic convergence remains a central objective of the European integration process, with crucial economic and social implications for long-term stability and cohesion. This paper aims to examine the key determinants of GDP per capita across member countries of the Economic and Monetary Union (EMU), focusing on the roles of EMU membership, institutional quality, and selected macroeconomic variables. The analysis covers the period from 1990 to 2023 and employs panel regression techniques, including pooled OLS, fixed effects, random effects, and dynamic Generalized Method of Moments (GMM) estimators, to ensure robustness of results. The findings indicate that EMU membership, stronger institutional quality, government expenditure on education, foreign direct investment (FDI) and higher trade openness are significantly associated with increased GDP per capita. Additionally, the study explores the economic consequences of the COVID-19 pandemic, revealing heterogeneous impacts across countries that underscore the importance of institutional resilience. The results suggest that policies aimed at improving governance structures and enhancing investment environments can contribute not only to economic growth but also to reducing regional disparities, thereby supporting broader social and economic convergence within the EMU.
