Purpose In Ghana, legal and illegal artisanal small-scale mining (ASM) activities have attracted the attention of the general populace and academia with varied opinions. This study examined how adopting the coping strategies for ASM operations affected the welfare of farm households. Design/methodology/approach Primary data were solicited from respondents using a semi-structured questionnaire. This paper used the endogenous treatment effect model to quantitatively estimate whether or not farmers who adopt coping strategies for activities of ASM have improved or deteriorated welfare. Findings The results revealed that households adopted coping strategies such as diversification, social networking, land reclamation, borrowing, dependence on the market for food and resettlement in other communities. The endogenous treatment effect model results show that households that adopted land reclamation and social networking had improved welfare regarding consumption expenditure and food security compared to non-adopters. Conversely, diversification was associated with lower consumption expenditures and high food insecurity among adopters. Practical implications This paper recommends that farm households in mining communities form cooperatives and farmer-based organizations to ensure improved access to joint resources for enhanced capacity to cope with ASM-induced shocks. There is a need for government and civil society organizations to encourage and support land reclamation measures. Originality/value This paper covers a broader perspective and deploys more than one welfare proxy, which has not been considered before in previous studies.
Purpose This research examines how shadow economy affects foreign direct investment (FDI). Design/methodology/approach The study utilizes a panel dataset including 124 nations between 1997 and 2015. Information on shadow economy, FDI and macro-economic characteristics is obtained from the United Nations Conference on Trade and Development (UNCTAD) and World Bank database. Various econometric methods are employed, such as the panel ordinary least squares (OLS) with fixed-effect estimator and the two-step system generalized method of moments estimation. Findings The findings of the study illustrate that shadow economy negatively influences total FDI inflows, and this adverse impact is mainly driven by greenfield investments – a component of FDI. Moreover, the authors provide evidence that the shadow economy has more devastating influences on FDI inflows in countries with higher corruption levels and fewer land resources. Practical implications Overall, this research suggests an important policy implication that the shadow economy should be controlled more strictly since it harms the FDI inflows, especially greenfield investment. Originality/value This research is among the first attempt of evaluating the effect of shadow economy on different FDI types. Furthermore, it examines how the shadow economy–FDI inflows nexus is changed when considering factors including corruption and land resource.
Purpose This study empirically examines the impact of rural roads on consumption of households in Ethiopia. Design/methodology/approach Both descriptive statistics and econometric techniques are used to address the aforementioned objective. Specifically, quantile regression, fixed- and random-effect models are used to understand the impact of rural road quality on welfare. Findings The econometric analysis revealed that improving the quality of rural roads and/or creating access to all-weather roads raises households' average real consumption per capita by as much as 10%. The other transport indicator – mode of transport – also has a positive effect on real consumption per capita. The result indicated that real consumption per capita for households using the traditional mode of transport would increase by as much as 7% compared to those using foot as a major mode of transport. However, the fixed quantile estimation result revealed that rural road access has a positive and significant effect on consumption per capita only for the 0.8th and 0.9th percentiles, indicating that the access to roads is not pro-poor. Research limitations/implications Improving rural roads to a level of all-weather road standards and provision of agricultural transport facilities should be strategic priorities. Originality/value This study provides empirical evidence pertinent to the effect rural mobility has on the consumption of households as well as the pro-poorness of such investments in rural settings.
Purpose The study investigates the effect of political instability and employee tenure security on the performance of firms in middle-income economies (MIEs) after controlling for the influence of corruption, international quality certification, external auditor services and firm age. It examines whether ownership and sector effects matter in the explored relationships. Design/methodology/approach The study adopts the generalized method of moments estimator and collects firm-level cross-sectional data from 77 MIEs. Findings The evidence shows that political uncertainty, employee tenure security and firm age negatively impact firm performance. Also, external quality assurance mainly improves firm performance. Additionally, foreign-owned firms benefit from corruption more than their domestic counterparts. Moreover, there are ownership and sector effects in the firm performance drivers. Practical implications The findings suggest the need for MIE firm managers to implement policies and programs to improve permanent employees' efficiency, commitment and honesty. Policy makers and political actors must work toward a stable political environment in MIEs. The policy must also focus on at least minimizing corruption. Originality/value The study shows the contributions of employee tenure security, political instability and corruption to the performance of MIE firms. It documents sector and ownership effects in the factors influencing firm performance.
Purpose This study aims to investigate the effects of mineral rents, conflict and population growth on countries' growth, with a specific interest in 13 selected economies in Sub-Saharan Africa. Design/methodology/approach This paper uses a combination of research methods: the pooled ordinary least squares (OLS), the fixed effect and the system generalized method of moment (GMM). The consistent estimator (system GMM), which provides the paper's empirical findings, remedies the inherent endogeneity bias in the model formulation. The utilized panel dataset for the study spans from 1980 to 2022. Findings The study suggests that mineral rents positively affect countries' growth by about 0.407 percentage points in the short run. The study further demonstrates the long-run negative impacts of population growth rates and prevalence of civil war on economic growth. The empirical work of the study reveals that an increase in the number of international borders within the group promotes mineral conflicts, which impedes economic growth. Evidence from the specification tests performed in the study confirmed the validity of the empirical results. Social implications Mineral rents, if well managed and conditioned on good institutions, are a blessing to an economy, contrary to the assumptions that mineral resources are a curse. The utilization of mineral rents in Sub-Saharan Africa for economic growth depends on several factors, notably the level of mineral conflicts, population growth rates, institutional factors and the ability to contain civil war, among others. Originality/value This study is the first attempt in the post-coronavirus disease 2019 (COVID-19) era to revisit the investigation of the impacts of mineral rents, conflict and population growth rates on the countries' growth while controlling for the potential implications of the qualities of institutions. One of the significant contributions of the study is the identification of high population growth rates as one of the primary drivers of mineral conflicts that impede economic growth in the states with enormous mineral deposits in Sub-Saharan Africa. The crucial inference drawn from the study is that mineral rents positively impact countries' growth, even with inherent institutional challenges, although the results could be better with good institutions.
Purpose This paper examines the political budget cycles in emerging and developing countries using a sample of 91 countries from 1992 to 2019. Design/methodology/approach This paper employs a pooled ordinary least squares (OLS) model with clustered standard errors at the country level. To address endogeneity issues, the authors also employ a two-step system generalized methods of moments model. Findings The authors find clear evidence of political budget cycles in emerging and developing countries. The authors consistently find that incumbents increase total government spending, particularly in economic affairs, public services and social welfare, in the year before an election and the election year. In contrast, they contract spending in the year after an election. Research limitations/implications Policymakers should be aware of the political budget cycles during election years. Promoting control of corruption and democracy helps to alleviate the effects of the political budget cycles in emerging and developing countries. Originality/value The authors are among the first to explore the political budget cycles in emerging and developing countries by focusing on the total government spending and its main compositions, including expenditures on economic affairs, public services and social welfare. Besides, the authors also explore the conditioning effects of control of corruption, political ideology and democracy.
Purpose This study aims to investigate whether the participation in land rental markets helps to mitigate impacts by climate change on multidimensional poverty in Thailand and Vietnam. Design/methodology/approach The authors use precipitation data from the National Aeronautics and Space Administration (NASA) and self-reported shocks from the Thailand Vietnam Socio-Economic Panel (TVSEP) project to estimate climate change. Data from the TVSEP are also used to calculate a multidimensional poverty index (MPI). Fixed-effect logit panel regressions with interaction terms are implemented to analyze the above mentioned. Findings The results show that land rental markets are used as mitigation strategies to climate change in Thailand and Vietnam. The participation in land rental markets also reduces multidimensional poverty. However, as a mitigation strategy, land rental markets are only successful in certain circumstances. Research limitations/implications The results show that there is potential in using land rental markets as mitigation strategies to climate change. Further research is needed to better understand which adaptation strategies, besides land rental market participation, and which combinations of different adaptation strategies are successful to mitigate negative effects induced by climate change. Practical implications The results show that there is potential in using land rental markets as mitigation strategies to climate change. Therefore, education in the participation in land rental markets and how to use them as a mitigation strategy can be a way to increase households' resilience to negative effects induced by climate change. Households make better decisions regarding their land when they are better informed on the functionality of land rental markets. Additionally, being better informed increases self-confidence to participate in land-rental markets. Originality/value Land rental markets as a mitigation strategy to climate change rarely have been studied, and if so, mainly the effect of leasing land has been studied. Additionally, the authors implement new measures of poverty – a multidimensional view on poverty which provides new insights into who are the poor and how they can be lift out of poverty.
PurposeThis article aims to investigate the impact of (1) the establishment of a refugee settlement, (2) the energy demand of a host and refugee population, (3) the residence time of refugees and (4) interventions in the energy sector on sustainable utilization of the forest.Design/methodology/approachRefugee movements from the Democratic Republic of Congo and settlement construction in a Zambian host society provide the setting. An agent-based model is developed. It uses survey data from 277 Zambian households, geographic information system coordinates and supplementary data inputs.FindingsThe future forest stock remains up to 30 years without an influx of refugees. Refugee developments completely deplete the forest over time. The settlement construction severely impacts the forest, while refugees' energy needs seem less significant. Compared with the repatriation of refugees, permanent integration has no influential impact on forest resources. Interventions in the energy sector through alternative sources slow down deforestation. Once a camp is constructed, tree cutting by hosts causes forest covers to decline even if alternative energy is provided.Practical implicationsThe analysis is useful for comparable host–refugee settings and United Nations High Commissioner for Refugees interventions in settlement situations. Forest and energy sector interventions should involve host and refugee stakeholders.Originality/valueThis article adds value through an agent-based model in the Zambian deforestation–refugee context. The study has a pilot character within the United Nation's Comprehensive Refugee Response Framework. It fills a gap in long-term assessments of refugee presence in local host communities.
PurposeThis paper aims to assess whether digital financial inclusion (DFI) supports Egypt's CO2 reduction efforts. More specifically, this paper examines the dynamics between digital finance, traditional financial inclusion (TFI) and renewable energy on carbon emission in Egypt.Design/methodology/approachThe study employed the autoregressive distributive lag (ARDL) model for Egypt over the period 1990–2020 to estimate an extended STIRPAT model for long-run linkages of DFI, traditional bank-based financial inclusion and renewable energy on carbon emissions, along with other control variables.FindingsThe results showed that using digital financial services limits carbon emissions in the long run but not in the short run, indicating that Egypt is still in its early stage of digitalization (DFI < 0.5). Moreover, renewable energy proved to have a significant negative impact on carbon emissions in the long run, implying that more investments in renewable energy projects will improve environmental quality.Practical implicationsThe findings from this study help policymakers incorporate DFI policies into climate change adaptation strategies and execute better green growth policies that integrate DFI with energy-efficient technologies investments for a better environment.Social implicationsFoster economic growth and sustinabaility.Originality/valueThis study contributes to the literature by quantifying the DFI in Egypt using a two-stage principal component analysis and then examines its impact on carbon emission reduction efforts. In addition, this paper extends the research on the environment from the perspective of digital finance, making it possible to excavate more deeply into the relationship between financial inclusion and carbon emission and draw more explicit policy implications for sustainable economic growth.
Purpose This paper examines whether farmers' knowledge of the minimum support prices (MSPs) affects farm-gate prices. MSP is the minimum guaranteed price for agricultural commodities announced by the Government of India for 24 commodities. Most farmers in India prefer to sell their produce at the farm-gate due to a small marketable surplus and hence do not directly benefit from MSP. The authors test the common argument in the political discourse that if farmers have knowledge of MSP, then they can bargain with traders during the farm-gate transaction and demand a better price close to MSP. Design/methodology/approach The authors use matching methods to examine the impact of knowledge of MSP on farm-gate prices. Findings Using nationally representative data, the authors show that there is no empirical evidence that the knowledge of MSP of the crops leads to higher bargaining power and better farm-gate prices. Practical implications Price information (MSP in this case) alone cannot improve the bargaining power of farmers and result in a better price realization. As a safety net, MSP fails in the absence of procurement of products by the government. This also raises the question of the equitability of the price support system in India and calls for a rethink of the MSP policy. Originality/value This study is the first of its kind to examine the anchoring effect of knowledge of MSP on farm-gate prices using a nationally representative dataset.
Purpose This research investigates how subsidy programs in Vietnam's residential electricity market affect consumers' well-being. Design/methodology/approach Two perspectives are employed: cash transfer and quantity-based subsidy. The effectiveness of cash transfer is measured in three ways: benefit incidence, beneficiary incidence and materiality. The quantity-based subsidy is established under the increasing block rate pricing, with the first two block rates being lower than the marginal cost. To improve the quantity-based subsidy, the research examines the consumer surplus under four proposals. Findings The results show that both types of subsidies are ineffective in supporting the poor. Research limitations/implications In order to achieve a more equal distribution among households, the subsidy program should remove all subsidized blocks and reflect the full marginal cost. Changes should be made to the price structure regarding both marginal price and intervals. Practical implications To mitigate the impact of the quantity-based subsidy, the government should improve the cash transfer by reducing extortion and improving targeting efficiency, especially for poor households living in rented houses. Originality/value This paper is the first to discuss the welfare effect of the electricity subsidy in Vietnam. First, it comprehensively evaluates the cash transfer subsidy in Vietnam. Second, it suggests a modification in the residential electricity tariff.
Purpose In this study, the authors examine the push and pull effects of extreme weather events on migration among governorates in Egypt. Design/methodology/approach To estimate the effect of extreme weather events on internal migration, the authors use migration gravity models and data from the 1996 and 2006 Population and Housing Censuses. The authors measure weather extremes by the number of months in the past 36 months with temperatures or precipitation of a governorate below the 5th percentile and above the 95th percentile of the distribution of monthly temperatures or precipitation of the corresponding governorate during the period 1900–2006. Findings This study’s results suggest that high temperatures in the origin area act as a push factor. High-temperature extremes have a positive effect on out-migration. A 1% increase in the number of months with high-temperature extremes in the original governorate results in a 0.1% increase in the number of out-migrants. Practical implications The study suggests that people may respond to weather extremes through migration. However, climate migrants in Egypt may encounter several significant risks that authorities must address. Originality/value This study is one of the first attempts to measure the push and pull effect of weather extremes on migration in Egypt.
Purpose This study explores the relationship between corruption and shadow economy (SE) by examining the potential links and interactions between these two phenomena to see whether it is a one-way or two-way relationship and a complementarity or substitution linkage. Design/methodology/approach Using a dataset comprised of 145 countries all over the world between 1996 and 2015, the authors apply the simultaneous two-step system generalized method of moments approach to address the research question. Findings The study findings support a positive bidirectional relationship between corruption and SE. As such, this study has provided evidence supporting the complementarity association. In the authors' further analyses, they point out that several factors can moderate this positive bidirectional linkage. In particular, while Foreign Direct Investment (FDI) inflows strengthen it, it is weakened by other institutional factors such as civil liberties and political rights. Finally, by splitting the full sample into three different subsamples and then examining countries at varying stages of economic development, the authors can gain valuable insights into the evolving dynamics of the relationship between corruption and SE. Specifically, while the authors observe that the positive direction of corruption to SE remains unchanged across different nations, they observe that the positive influence of SE on corruption is strongest among developed economies only. Practical implications The study findings provide an important policy implication. This study highlights the synergistic relationship between SE and corruption, indicating that reducing corruption will reduce the size of the SE. Consequently, this reduction in the SE can mitigate the adverse effects of corruption on economic development. Originality/value This paper is among the first empirical studies that critically investigate the interrelationship between SE and corruption. It then explores how this two-way linkage is conditional on some factors, such as economic development levels and institutional quality indicators.
Purpose The authors examine the factors affecting households' resilience capacities and the impacts of these capacities on household consumption and crop commercialization. Design/methodology/approach The authors use panel data of 1,648 households from Thailand collected in three years, 2010, 2013 and 2016. The authors employ an econometric model with an instrumental variable approach to address endogenous issues. Findings The study results show that the experience of shocks in previous years positively correlates with households' savings per capita and income diversification. Further, a better absorptive capacity in the form of better savings and a better adaptive capacity in the form of higher income diversification have a significant and positive influence on household expenditure per capita and crop commercialization. Practical implications Development policies and programs aiming to improve income, increase savings and provide income diversification opportunities are strongly recommended. Originality/value The authors provide empirical evidence on the determinants of resilience strategies and their impacts on local food commercialization from a country in the middle-income group.
Purpose This study examines the adoption drivers of scale-appropriate mechanization in Nepal's maize-based farming systems. The authors also assess the contribution of scale-appropriate mechanization to the United Nations Sustainable Development Goals (SDGs) of zero hunger (SDG2) and no poverty (SDG1). Design/methodology/approach Propensity score matching and doubly robust inverse probability-weighted regression adjusted methods were applied to estimate the effects of mini-tiller adoption. These methods control the biases that arise from observed heterogeneities between mini-tillers users and nonusers. Findings The study findings show that farm size, labor shortages, draft animal scarcity, market proximity, household assets and household heads' educational level influence the adoption of mechanization in Nepal. Mechanized farms exhibited enhanced maize productivity, profits and household food self-sufficiency. Reduced depth and severity of poverty were also observed. Nevertheless, these effects were not uniform; very small farms (≤0.41 ha) facing acute labor shortages benefited the most. Research limitations/implications The study results suggest that policymakers in developing nations like Nepal may wish to expand their emphasis on scale-appropriate mechanization to improve farm productivity and household food security, reduce poverty and contribute to the SDGs. Originality/value This first-of-its-kind study establishes the causal effects between scale-appropriate farm mechanization and SDG1 (no poverty) and SDG2 (zero hunger) in a developing nation.
PurposeEarly evidence suggests that coronavirus disease 2019 (COVID-19) caused a sharp deterioration in fiscal accounts worldwide. This paper empirically assesses the fiscal impact of previous pandemics and epidemics.Design/methodology/approachUsing a large sample of 170 countries from 2000 to 2018, this study relies on Jordà's (2005) local projection method to trace pandemics' short- to medium-term dynamic impact on several fiscal aggregates.FindingsThis paper shows that (qualitatively) similar responses to those observed more recently with COVID-19 have characterized the effects of previous pandemics. While the fiscal effect has been economically and statistically significant and persistent, it varies; pandemics affect government expenditures more strongly than revenues in advanced economies, while the converse applies to developing countries. The author also finds that asymmetric responses depend on whether a country is characterized as a chronic fiscal surplus or deficit type. Another factor that generates an asymmetric fiscal response is the prevailing phase of the business cycle the economy was in when the pandemic shock hits.Research limitations/implicationsThis paper's findings provide a lower bound to what the current COVID-19 pandemic will inflict on countries’ fiscal situation. That said, the set of pandemics and epidemics used in this paper are geographically more concentrated and did not affect all countries in such a systemic and synchronized manner as did COVID-19 more recently.Originality/valueThis is the first paper to explore the fiscal side of this type of health-related shocks, as most of the literature has focused on the more traditional macroeconomic effects.
PurposeThe study examines the effect of macroeconomic risk, inflation uncertainty and instability associated with key macroeconomic indicators on the efficiency of financial institutions among economies in sub-Saharan Africa (SSA).Design/methodology/approachData for the empirical inquiry were compiled from 35 SSA economies from 1996 to 2019. The empirical estimates were carried out using pooled ordinary least squares (POLS) with Driscoll and Kraay’s (1998) standard errors.FindingsReported empirical estimates show that macroeconomic risk and exchange rate volatility constrain the efficiency of financial institutions. Further results suggest that inflation uncertainty has a significant influence on the efficiency of financial institutions among economies in the subregion. Additionally, reviewed empirical estimates show that institutional quality positively moderates the nexus between inflation uncertainty and financial institution efficiency. At the same time, political instability is found to worsen the adverse effect of macroeconomic risk on the efficiency of financial institutions.Practical implicationsFor policymakers and governments, improved institutional structures are recommended to ensure the operational efficiency of financial institutions, especially during an inflationary period. For decision-makers among financial institutions, the study recommends policies that have the potential to make their institutions less vulnerable to macroeconomic risk and exchange rate fluctuations.Originality/valueThe approach adopted in this study differs significantly from related studies in that the study examines and reviews interactions and relationships not readily found in the reviewed literature.
PurposeThis study investigates the impact of global economic sanctions on foreign direct investment (FDI).Design/methodology/approachData were gathered from several sources, including the United Nations Conference on Trade and Development, the Global Sanction and the World Bank database, to build a dataset that consists of 172 countries during the period 2003–2019. The panel ordinary least square with a fixed-effects estimator was exploited to achieve the research objective.FindingsThe research findings reveal that sanction exerts a detrimental effect on the total inflows of FDI and its components. Regarding different types of sanctions, while military and trade sanctions have little or even no impact on greenfield investment, they have more adverse and sizable effects on cross-border mergers and acquisitions (M&As). The authors further show that sanctions exert devastating influences through the infrastructure and economic development channels.Practical implicationOverall, this study implies that a closer look at particular types of FDI is required when implementing policies as different types of FDI may be affected differently by changes in the economy, such as economic sanctions.Originality/valueThis paper is the first empirical study that critically investigates the impact of sanctions on the total inward FDI flows and its two components: greenfield investment and cross-border M&As. It then explores how the sanction–FDI nexus varies depending on several country-level economic factors to understand better how sanctions and different types of sanctions are related to international trade and relations.
PurposeThe paper examines the impact of foreign direct investment (FDI), either greenfield investment or cross-border mergers and acquisitions (M&As), on domestic entrepreneurship.Design/methodology/approachThis paper uses a panel dataset of 104 countries over ten years from 2006 to 2015 and multiple econometric techniques to control for potential endogeneity bias.FindingsFDI, both in the form of greenfield investment and cross-border M&As, exerts positive spillover that encourages domestic entrepreneurial activities. While the benefit of greenfield investment in entrepreneurship is more pronounced in countries with higher levels of market capacity and institutional support, that of cross-border M&As is not influenced by these factors. On the other hand, human capital is important in promoting the positive effects of both types of FDI, and unless the level of human capital in the host economies reaches a certain threshold, greenfield investment can adversely affect domestic entrepreneurship.Practical implicationsPolicies toward FDI need to focus on promoting the driving forces behind FDI spillover to counteract the potential negative crowding-out effect of FDI.Originality/valueThe paper contributes to the existing literature investigating the impact of FDI on domestic entrepreneurship by distinguishing between the two FDI modes of entry and taking into account the moderating effects of sociopolitical characteristics of the host economies.
PurposeThe paper investigates the production inefficiency of the US electricity industry in the wake of restructuring and emission reduction regulations.Design/methodology/approachThe study estimates a multiple-input, multiple-output directional distance function, using six inputs: fuel, labor, capital and annualized capital costs of sulfur dioxide (SO2), nitrogen oxides (NOX) and particulate removal devices, two good outputs – residential and industrial-commercial electricity and three bad outputs – SO2, carbon dioxide (CO2) and NOX emissions.FindingsThe authors find that restructuring in electricity markets improves deregulated utilities' technical efficiency (TE). Deregulated utilities with below-average NOX control equipment tend to invest less in these devices, but above-average utilities do the opposite. The reverse applies to particulate removal devices. The whole sample spends more on NOX, particulate and SO2 control systems and reduces its electricity sales slightly. Increased investments in SO2 and NOX control equipment do not reduce SO2 and NOX emissions, but expansions of particulate control systems cut down SO2 emissions greatly. Stricter environmental regulations have probably shifted the production frontier inwards and the utilities farther from the frontier over time.Practical implicationsRestructuring and environmental regulations do not make all utilities invest more in emission control systems. The US government should devise other schemes to achieve this goal.Originality/valueThe paper unveils heterogeneous reactions of US electric utilities in the wake of restructuring and emission regulations.
