Home-country monetary policy uncertainty affects outward foreign direct investment (OFDI). Taking A-share nonfinancial listed companies in China from 2004 to 2014 as the sample, this article explores the influence of home-country monetary policy uncertainty on OFDI. The results show that home-country monetary policy uncertainty negatively impacts Chinese OFDI. This adverse effect is more pronounced for firms facing greater financing constraints. However, the negative effect of monetary policy uncertainty on OFDI is mitigated by government subsidies and bank-enterprise ties and is more pronounced for small firms than for large firms. This article offers important theoretical and practical insights into the effects of China’s monetary policy uncertainty on OFDI. JEL Classification E52, F21, F68
This study investigates the relationship between refinancing risk (REFRISK) and trade credit (TC), using data from 1,048 Vietnamese firms covering the period 2010Q1–2024Q1. We test whether REFRISK can have a significant effect on TC. Firms facing higher REFRISKs receive less supplier financing. In particular, a one standard deviation increase in REFRISK leads to a 5.2% decrease in TC. However, during periods of heightened economic uncertainty, such as banking sector shocks and the COVID-19 pandemic, this negative relationship weakens. Suppliers appear to respond to such conditions by extending more favorable credit terms, prioritizing stable relationships, and ensuring supply chain security. These findings align with the adverse selection theory, which suggests that suppliers adjust credit decisions based on observable financial indicators and prioritize relational stability under uncertain conditions. Furthermore, firms with lower cash reserves are disproportionately affected, as constrained liquidity intensifies supplier concerns regarding creditworthiness. This result is consistent with agency theory, which highlights the importance of financial flexibility in mitigating risk perceptions and fostering trust in creditor relationships. These findings highlight the critical role of debt maturity and liquidity management in securing TC and offer valuable implications for both policymakers and suppliers in managing financial uncertainty. JEL Classification D82, G14, G32, M40
The Regional Comprehensive Economic Partnership (RCEP) constitutes a major development in Asia-Pacific regional economic cooperation. While frequently characterized as a mega-trade agreement, this article argues that RCEP functions as a hybrid institutional arrangement shaped by trade rationalization, strategic risk management, and flexible governance practices. Based on qualitative analysis of agreement texts, negotiation documents, national policy materials, and relevant literature, the study shows how RCEP consolidates overlapping regional trade frameworks, supports economic hedging amid intensifying great-power rivalry, and institutionalizes Association of Southeast Asian Nations (ASEAN)’s norms of inclusivity, consensus, and flexibility. Rather than reflecting hegemonic leadership or fixed geopolitical alignment, RCEP represents a negotiated outcome among fifteen diverse economies seeking economic stability, autonomy, and resilience under multipolar conditions. The analysis demonstrates differentiated effects across participants; lower-income ASEAN members benefit from expanded market access and value-chain participation, while middle and advanced economies utilize RCEP to stabilize production networks and manage strategic uncertainty. The article contributes to debates on contemporary regionalism by illustrating how economic cooperation can be sustained through pragmatic institutional design in a fragmented global environment. JEL Classification F15, F02, O19
This article examines the role of pension fund investments in shaping volatility dynamics in South African stock markets from 2010Q1 to 2022Q4. The article measures exchange rate volatility using the family of autoregressive conditional heteroskedasticity and Markov-switching dynamic regression. Results indicate that increased contributions by both individuals and employers are positively associated with higher stock market returns, suggesting a potential contribution to improved market performance. In addition, there are two distinct regimes when analyzing the impact of pension fund withdrawals on stock market volatility. In regime 1, pension fund withdrawals contribute to a decrease in stock market volatility, indicating a potential stabilizing effect on the market. However, in regime 2, higher withdrawals are associated with increased volatility, possibly reflecting market uncertainties and selling pressures. Given these, pension fund participants and investors should carefully consider the timing and amount of their withdrawals, taking into account the potential impact on stock market returns. Encouraging higher pension fund contributions by individuals and employers can play a crucial role in enhancing stock market performance and stability. Policymakers should closely monitor the impact of pension fund dynamics on market dynamics and ensure the integrity and stability of the stock market. JEL Classifications G10, G18, G23
This study examines how sustainable energy finance and environmental regulatory quality jointly influence two dimensions of Sustainable Development Goal-7 in sub-Saharan Africa: energy cleanability and energy accessibility. Covering 26 countries from 2005 to 2022, the analysis introduces novel composite indices derived using principal component analysis. The relationships were estimated using panel-corrected standard errors and feasible generalized least squares, complemented by the method-of-moments quantile regression and subregional breakdowns. Findings show that environmental regulatory quality exerts a strong and consistent positive effect on energy cleanability. Sustainable energy finance improves energy cleanability to a lesser extent and enhances energy accessibility only in low-performing countries with higher regulatory quality. Subregional analysis reveals that in West Africa, sustainable energy finance alone has little effect on energy access without strong regulation; in East Africa, regulation plays the dominant role; and in Central/Southern Africa, energy finance tends to be weak or even negative unless moderated by regulation. The study contributes to the literature by highlighting finance–regulation complementarities and recommending sequenced, blended finance tied to verifiable regulatory milestones. JEL Classification: Q42, Q48, Q56, G28, O55
This study investigates the impact of digital economy development on tax revenue mobilization in 38 emerging economies from 2000 to 2023. Employing panel autoregressive distributed lag estimators and addressing cross-sectional dependence through the common correlated effects estimators, we examined both the direct effect of the digital economy and its interaction with institutional quality and financial development. The baseline results reveal a negative and significant association between the digital economy and tax revenue mobilization, suggesting that the rapid expansion of digital economic activities may erode tax bases, enable profit shifting, and exacerbate enforcement gaps in settings where tax systems and regulatory frameworks have not adapted to the digital environment. However, when interaction terms are introduced, the moderating roles of institutional quality and financial development emerge as positive and statistically significant, while the direct effect of the digital economy becomes insignificant. Subsample analysis confirms this heterogeneity; the digital economy exerts a positive and significant impact in countries with higher institutional quality and deeper financial development, but remains negative and significant in countries with weaker institutional and financial systems. These findings underscore the importance of complementary institutional and financial reforms to ensure that digital transformation translates into stronger fiscal capacity in emerging economies. JEL Classification C33, H20, O33
India is emerging as a rapidly growing economy, with many multinational companies expanding globally. Export granularity calls for tailored trade and industrial policies, making it pertinent to study its effects on the comparative advantage and trade balance of India’s manufacturing industries. Calculating the shares of granular firms, employing a nonparametric test, and applying static convergence regression analysis, this study finds that the export share of top manufacturing exporters ranges from 18% to 34%, and granularity in exports is higher than in gross output and factors of production. Export specialization strengthens when top exporters are excluded, while the trade balance worsens. Manufacturing exports are more concentrated in low technology (LT) and high-medium technology (HMT) product groups than in medium-low technology (MLT) product groups, and this concentration increases further when top exporters are excluded. The impact of top exporting firms is stronger in the MLT product group, indicating their key role in shaping the group’s comparative advantage. After excluding the granular firms, the share of industries with comparative advantage increased over time, except for a few years. The findings suggest that trade policy should support ordinary firms in diversifying and strengthening the manufacturing sector’s comparative advantage, particularly in the MLT product group. JEL Classifications F14, F19
Remittance inflows serve as an important source of income for many developing, particularly emerging, economies. This study investigates the short- and long-run relationships between remittances and economic growth in the presence of economic uncertainties, capturing policy uncertainty, financial market instability, political instability, as well as economic complexity reflecting production diversification and sophistication. The analysis is based on data from 26 emerging economies from 1996 to 2023. Results from the cross-sectional dependence test necessitated the use of the Cross-Sectional Autoregressive Distributive Lag model to account for the long- and short-run cross-sectional dependence among the variables. Consistent with some previous literature, the results indicate that remittances, in isolation, exert a negative impact on economic growth in global emerging economies. However, in contrast to prior studies that focus only on the individual effects of remittances, the interaction between remittances and economic uncertainties and complexities reveals that remittances positively contribute to economic growth when these factors are taken into account. Policy implication highlights the need to incorporate macroeconomic and political uncertainties, as well as production complexities, in designing remittance-related policies for emerging economies. JEL Classification F24, L16, D8, Q5, Q43
This research investigates the impact of Information and Communication Technology (ICT) development on employability and employment quality in Vietnam, utilizing data from the Vietnam Labor Force Survey and ICT datasets for the period 2015–2021. Using a two-stage least squares model, the study finds a statistically significant positive relationship between the ICT index and indicators of employability and employment quality. Key findings show a significant positive correlation between improvements in a province’s ICT index and the probability of residents securing employment. Specifically, a 0.1-point increase in the ICT index, representing a 10% improvement on its 0–1 scale, was associated with a 7.91 percentage point increase in the number of wage-earning jobs among the employed population. Additionally, there was a 9.27 percentage point increase in the likelihood of obtaining a job in the formal sector and a 5.23 percentage point increase in the overall probability of securing a formal job. Conversely, the same increase in the ICT index was associated with a 12.98 percentage point decrease in the likelihood of individuals being employed in vulnerable jobs. These results suggest that ICT development enhances employment quality in Vietnam by promoting formal employment and reducing labor vulnerability. JEL Classification O15, J24, O33, R11
As Bangladesh prepares to graduate from its least developed country status, concerns have emerged over the potential loss of duty-free and quota-free (DFQF) access to major export markets, which could impact trade in Bangladesh. To address this challenge, Bangladesh is considering a free trade agreement (FTA) with its major trading partners, including Japan, which has always been a development and strategic partner of Bangladesh. This study examines whether such an FTA is necessary by employing a structural gravity model using bilateral trade data of 43 partners from 2011 to 2021 at the HS-02 level. The analysis evaluates the impact of losing DFQF access on Bangladesh’s exports to Japan and estimates the potential trade effects of an FTA. The results indicate that the removal of DFQF access would not significantly affect Bangladesh’s export flow to Japan, suggesting that an FTA may not be essential to maintain current export performance. However, the model predicts that an FTA could increase Bangladesh’s imports from Japan by approximately 4.8%, primarily driven by raw materials and capital goods. These findings suggest that while the short-term export benefits of an FTA may be limited, such an agreement could still support industrial development by providing improved access to intermediate inputs. JEL Classification F1, F13, F14, F15, F17
This article examines the dynamics of the real exchange rate in India under the market-based exchange rate management regime from 1996Q1 to 2024Q1. It moderates the role of openness, trade balance, money supply, and inflation rate differential in the real exchange rate variations. The results reveal that the real effective exchange rate (RER) and variations in the rupee/dollar real rate (RS) are associated with several specifications of trade openness, trade balance, export and import penetrations, money supply, and the inflation rate differential between India and its major trading partners. Trade openness, trade balance, and export penetration lead to the appreciation of RERs and RS. Besides, a significant depreciating effect of the domestic money supply on the RS is observed. However, it does not seem to affect the RER. The impact of the inflation rate differential between India and its major trading partners is ambiguous. The findings underscore the pivotal role of external sector management in monitoring exchange rates in India. JEL Classification F31, F14, F41, C32
This article examines the complex interplay between multipolarity and regionalism in South Asia, highlighting the opportunities and challenges that the region faces. As global power structures shift toward multipolarity, with rising powers like China and the increasing influence of traditional actors such as the USA, South Asia is navigating new diplomatic, economic, and strategic engagements. However, the region’s potential for deeper cooperation remains constrained by long-standing political rivalries, particularly between India and Pakistan, and complex geopolitical pressures. This study examines the influence of multipolarity on South Asian regionalism, with a specific focus on economic integration, trade, and security. Through a detailed analysis of regional frameworks like the South Asian Association for Regional Cooperation (SAARC) and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), the article evaluates their successes and limitations, suggesting pathways to enhance their effectiveness. By integrating both qualitative and quantitative evidence, including trade data and geopolitical trends, this study highlights the need for a more coherent regional strategy to overcome fragmentation and foster sustained regional cooperation. The article concludes by offering insights into how South Asia can leverage its strategic position, youthful demographic, and growing economies to achieve collective growth, while managing both internal divisions and external influences. JEL Classification F15, F21, F23, F53, P45, R11
China faces the challenge of maintaining fiscal sustainability amid volatile oil prices (OPs). Fluctuating prices affect revenues and expenditures, complicating consolidation. Understanding how revenue- and expenditure-based policies respond to such shocks is key, yet few studies examine their interaction over time with nonlinear, time-varying effects. This study analyzes the relationship between OP shocks, fiscal consolidation, and fiscal policy composition in China from 1990 to 2025. Using time-varying parameter local projection (TVP-LP), time-varying parameter vector autoregression (TVP-VAR), and structural vector autoregression (SVAR) models, it captures the time-varying and nonlinear responses of the cyclically adjusted primary balance (CAPB) to domestic fiscal shocks and external OP changes. Results show that consolidation is highly sensitive to OP volatility, debt levels, and the choice of revenue- or expenditure-based measures. Expenditure-based consolidation yields lower output costs and more sustainable debt paths, while revenue-based measures improve fiscal balances but can worsen short-term contractionary effects. Policymakers need to enhance expenditure efficiency, mobilize revenue strategically, build fiscal buffers, and strengthen medium-term debt management. The study adds to the literature by demonstrating the relevance of time-varying fiscal dynamics and the impact of institutional and external influences. Findings guide emerging economies facing commodity price shocks and rising debt, stressing the importance of adaptive and well-sequenced consolidation strategies. JEL Classification E62, H60, Q43, C32, F41
The services sector plays a crucial role in shaping a country’s economy, enhancing efficiency across industries. Essential services such as transport, financial, and telecommunications services enable the movement of people, goods, and capital internationally. The sector’s share reached 65.7% of the gross domestic product (GDP) globally in 2020, with world trade in services increasing from 6.0% to 13.6% of GDP between 1990 and 2019. This growth has also led to a significant increase in employment, with 51% of the global workforce now in services, 17% up since 1991. This article examines the growing significance of the services sector in trade, employment, and economic growth, focusing on intra-industry trade (IIT) among South Asian nations. Using data from the Trade in Services database of Organization for Economic Cooperation and Development (OECD) and World Development Indicators (WDI), the study finds that significant sectoral shifts in IIT, particularly in Afghanistan and India, highlight dynamic changes in trade profiles. Further, trade imbalances (TRIMs) and differences in income per capita are found to have a negative impact on the intensity of IIT, while trade orientation (TO) positively impacts it, suggesting that more trade-oriented nations have higher IIT. The findings demonstrate the importance of balanced trade relations and suggest that historical trade conditions continue to influence trade within the industry. JEL Classification C23, F14, F15
This article examines the differential impact of education on financial inclusion in rural and urban India, with a special focus on formal household savings. While education and financial literacy are key to improving financial inclusion, institutional differences between rural and urban areas may mediate their effectiveness. The study first develops a theoretical framework based on the concept of transaction costs to explain savings behavior, and then empirically investigates how educational attainment and banking infrastructure influence formal savings through their effect on transaction costs. The analysis draws on household-level data from the 70th (2013) and 77th (2019) rounds of the National Sample Survey Office-All-India Debt and Investment Survey. Findings from 2013 reveal that in rural areas, improved banking infrastructure enhanced formal savings among less-educated households, suggesting a higher marginal benefit for this group. In contrast, the less-educated urban households fared worse as financial infrastructure improved, implying a crowding-out effect. By 2019, however, a slow convergence emerged between education groups in urban areas, though it lagged behind the rural trajectory. These findings highlight the importance of regionally sensitive financial inclusion strategies. Specifically, strengthening agent-based models, such as India’s Common Service Centres, may promote digital financial access and foster equitable use of formal financial services in urban areas. JEL Classification G2, G5, R2, G28
This article examines the relationship between the oil market and inflation rates in 26 economies, covering both oil-exporting and oil-importing economies that collectively represent over 90% of the global GDP. Employing Bayesian global vector autoregressions that incorporate a large dataset of macroeconomic variables from 1979 to 2019, the study identifies the dynamic effects of supply- and demand-driven oil price shocks on global inflation. The evidence reveals that unexpected disturbances to Saudi Arabia’s oil supply have a persistent effect on real oil prices, leading to inflationary pressure in 18 of the 26 sampled economies, affecting both oil exporters and importers. Supply shocks from other oil-producing economies also induce inflation, albeit with less persistence among oil exporters. Furthermore, demand-driven oil price shocks exhibit a more prolonged inflationary effect on oil-importing economies compared to oil supply shocks. The article also identifies distinct transmission channels through which oil market shocks influence both energy and core consumer price indices in the Euro area and the USA. Notably, Saudi Arabia’s oil supply shock leads to higher nominal wages only in the Euro area JEL Classification C32, E31, Q43
Sustainable performance has become a crucial research focus in the context of regional economic integration, particularly within the Regional Comprehensive Economic Partnership (RCEP). This study used the Web of Science (WoS) database to screen 53 articles. The study employed bibliometric analysis to map the intellectual landscape and research trends in sustainable performance among RCEP countries. Using VOSviewer and Scimago Graphica, the co-citation networks, keyword co-occurrence, and thematic clusters were analyzed to uncover key research areas and influential contributions. The findings highlight the increasing emphasis on environmental policies, green innovation, trade liberalization, and economic resilience in the region. Leading scholars and collaborative networks that are driving sustainability research within RCEP economies were identified. Despite significant progress, gaps remain in policy harmonization, technological innovation, and cross-border sustainability initiatives. This study offers valuable insights for policymakers, businesses, and researchers by outlining future research directions and emphasizing the need for stronger regional cooperation and policy frameworks to promote sustainable development. Moreover, the study enhances insights into sustainable performance in RCEP countries. It contributes to the ongoing discourse on balancing economic growth with environmental responsibility amid global sustainability challenges. JEL Classification Q56, F15, O44
Despite decades of regional efforts, Africa-wide economic integration remains far from full, partly due to the multiple national currencies, which the African Union (AU) aims to eliminate by 2045. Utilizing data on sectoral value-added and income per capita from 48 African nations (1970–2023), the study tests convergence using pooled ordinary least squares (OLS), fixed-effects, and random-effects estimations, as well as system generalized method of moments (system GMM) estimations. The analysis indicates conditional catch-up in income and structural transformation continent-wide; however, disparities in per capita income and agricultural transformation have widened, especially among agricultural commodity and oil-exporting economies, where convergence is notably absent. While sectoral convergence is evident within groups, fragile and emerging market economies (EMEs) diverge in both industrialization and agricultural modernization. Oil-exporters have the strongest within-group convergence, but absolute cross-country gaps persist, mainly outside the service sector. Overall, convergence hinges on industrial capacity, service-sector formalization, financial development (FD), foreign capital absorption, and exchange-rate stability. For sustainable integration, factor-based economies must prioritize industrial and agricultural transformation, strengthen service formalization, deepen finance, stabilize exchange rates, and pursue governance and policy reforms to close structural divides and foster inclusive growth. JEL Classification F15, O47, O55, E32, O14
This study examines how financial development influences the impact of foreign aid on poverty reduction across 43 African countries between 2000 and 2019. Given the uneven distribution of the data, the analysis utilizes the innovative Method of Moments Quantile Regression (MMQR) technique. The results indicate that foreign aid has a positive impact on poverty in Africa. Importantly, financial development also has a positive influence on poverty. However, the results demonstrate a negative interaction effect, which implies that the combination of aid and financial development is associated with poverty reduction. Future research can improve on the findings from this study by addressing limitations in data disaggregation and cross-sectional coverage, as well as by investigating other methodological techniques and transmission mechanisms. This research contributes to the existing literature by exploring the moderating role of financial development in the aid-poverty relationship, using a multidimensional poverty measure. It also applies the advanced MMQR technique to offer a more in-depth analysis across the poverty distribution. JEL Classification F35, O16, I32, C32
This article validates a composite governance indicator for MEDA countries by comparing it with alternative methods for reconstructing indices. Building on the World Bank’s Worldwide Governance Indicators (WGIs), we benchmark our overall index against those obtained through principal component analysis (PCA), as well as the Mazziotta–Pareto Index (MPI) and the weighted MPI (WMPI). Covering 2010–2023—a period marked by two important shocks, the “Arab Springs” and the global pandemic, the analysis shows that PCA closely mirrors governance conditions, while MPI and WMPI are less effective. On the other hand, our composite index is SMART—Specific, Measurable, Achievable, Reliable, and Time-bound. It is easy to calculate and implement, theoretically correct, preserves cross-country governance trends, captures all three governance sub-dimensions, and adequately incorporates the six basic indicators. JEL Classification C18, C43, O10, P47
