Country-specific institutional quality is one of the traditional factors of location choice of multinational corporations. However, the related literature for a long time has ignored the effect of the health system of the economy on attracting foreign direct investment (FDI). This study is an attempt to bridge the gap in the related literature and focus on the joint impact of country-specific institutional quality and health on FDI inflows for a panel of 44 developing countries over the period 2000−2022. The hypothesis of the study suggests that countries with strong institutional quality and good quality of health would attract more FDI. On the contrary, countries with low quality health levels and quality of institutions will struggle to bring FDI into the country. The results of the model strongly support our hypothesis. Our results are robust to alternative measures of the quality of health in the country. From a policy point of view, countries are expected to enhance the quality of health and institutions in the country to attract more FDI. JEL Classification: F21, F23, C33, H51, I18
The economic prosperity of an economy depends upon several micro and macroeconomic variables. Every economy lacks some economic resources. Whenever the economy needs such resources, it can fill the gap by taking aid from external sources, in the form of external debt. However, it is still debatable whether external debt affects economic growth positively or negatively. Some studies find a positive relation between external debt and economic growth, whereas others find a negative one. The present study deals with this question in the case of the Indian economy. Based on external debt data from 1991 to 2021 and an autoregressive distributed lag (ARDL) cointegration model, this study has made an attempt to analyse the relationship between external debt and economic growth. The study has found that a long-run equilibrium relationship exists between them. External debt negatively affects economic growth in the short run but has an insignificant effect in the long run. In contrast, other variables like human skills and investment have a significant positive effect. Population growth harms economic growth. In the long run, the disequilibrium caused by some short-run fluctuations is adjusted by a 72% rate every year through an error correction mechanism. JEL Classification: C32, F34, F35
This study investigates the influence of human capital and research and development (R&D) on local-level innovation outputs in Vietnam. Using data from the 2024 Provincial Innovation Index, the study applies multivariate linear regression models to assess the effects of human capital and R&D on provincial innovation performance. The results show that the density of full-time research staff is the most significant factor affecting local innovation outputs. Conversely, variables related to public budget spending on education and R&D do not have statistically significant effects in the models. The findings also highlight notable regional disparities: provinces in the Northern Mountainous Region and the North Central and Central Coastal Region exhibit considerably lower innovation outputs than those in the Southeast Region. These outcomes emphasise the need for regionally tailored innovation policies to reduce development gaps and enhance R&D capacity in lagging areas. JEL Classification: O30, O15
The article examines whether energy consumption and energy intensity of manufacturing enterprises in India are significantly impacted by energy prices, also studying the impact of non-price factors. Data on industrial plants and manufacturing companies are used for two components of the analysis: one addressing the impact of energy prices on energy demand, and the other addressing the impact of non-price factors on energy intensity. Although several studies have reported moderate-to-low price elasticities of industrial power demand in India (ranging from –0.2 to –0.6), we estimate that the price elasticity of energy demand in India’s energy-intensive manufacturing industries is about –1.3. The results indicate that export-oriented manufacturing firms in India have lower energy intensity than non-exporting firms; this finding aligns with similar earlier studies. However, this impact is contingent on firms’ environmental consciousness and commitment. JEL Classification: D21, F18, L60, M14, Q40, Q41, Q42, Q54
This study uses fractional meta-regression analysis to investigate the heterogeneity in manufacturing and national efficiency scores in Brazil, Russia, India, China, South Africa, Egypt, Saudi Arabia, Iran, UAE and Ethiopia (BRICS)+ countries. The analysis of 281 manufacturing efficiency scores from 87 primary studies reveals an average efficiency of 65.9%, and 230 national efficiency scores from 39 studies produce an average score of 75.04%. Our findings indicate significant heterogeneity in both manufacturing and national efficiency scores, as well as the sensitivity of efficiency estimates to study-specific characteristics. Our findings reveal significant heterogeneity in efficiency scores driven by both methodological and economic factors. Methodological influences include estimation method, study orientation, sample size, number of variables, publication status and data type, reflecting differences in research design. Economically, variations arise from factors such as returns to scale and sector-specific conditions, which affect how inputs are converted into outputs. Notably, the manufacturing sector in BRICS+ countries holds substantial potential for output growth through efficiency improvements linked to better resource use, technology adoption and institutional support. JEL Classification: D2, F2
Trade digitalisation, or the improvement of international trade processes using digital technologies and digitised data, has become an important priority to accelerate economic integration, as evidenced by the growing number of related provisions included in multilateral and other trade agreements. This study estimates partial and general equilibrium impacts of trade digitalisation using data from the United Nations Trade Digitalization Index (UN TDI) and a structural gravity model. Based on the gravity model estimates, a general equilibrium model is constructed. Counterfactual simulations indicate that global trade increases by nearly 13% when full implementation of the trade digitalisation measures included in the UN TDI is achieved. Real wages also increase by over 3%, and producer prices fall by nearly 4% globally under the full implementation scenario. While the size of impacts varies across regions, the direction of impacts is consistent across all regions, confirming that trade digitalisation offers great opportunities in inducing trade, as well as in increasing wages and reducing costs for consumers. Within Asia and the Pacific, less developed and more geographically isolated economies emerge as the top beneficiaries in terms of potential trade growth, suggesting that trade digitalisation be prioritised as part of their sustainable development plans. JEL Classification: D50, F13, O14
As the South and Southeast Asian economies are growing very fast there, will be a high demand for energy sources. No country in the region is self-reliant or self-sufficient to meet the electricity demand. Therefore, there is a big concern about ensuring energy security in the region. Power trading and energy cooperation among the region can help the countries to meet the electricity demand and thus ensure energy security. Advancing power trade requires efficient grid connectivity. In 2018, India launched the One Sun, One World, One Grid (OSOWOG) initiative, which aims to connect India to Southeast Asia—facilitating increased power trade. Despite many challenges, such as regulatory disparities, infrastructure limitations and geopolitical complexities, regional grid connectivity between India and Southeast Asia would bring many opportunities for investment, technology transfer and employment generation. JEL Classification: F2, Q2, Q4
The study examines the impact of globalisation, including political and economic, on the export competitiveness of Indian manufacturing from 1970 to 2023. The autoregressive distributed lag (ARDL) model has been utilised along with other econometric stability tests to study the long-run impact of sample variables on export competitiveness of Indian manufacturing. Findings indicate that economic globalisation is the least influential factor in bolstering India’s manufacturing competitiveness in the global arena. In contrast, political integration has yielded significant benefits in both the short and long term, alongside social globalisation. India’s experience underscores the importance of political integration and proactive foreign engagement in strengthening its global competitiveness. While the country has effectively developed diplomatic ties and attracted foreign investments, it still faces challenges related to economic globalisation, particularly within the manufacturing sector. Regulatory hurdles and limitations on foreign direct investment across various industries have hindered the growth of export-driven manufacturing. JEL Classification: F1, F18
In recent years, developing countries have increasingly engaged in exports or joined global value chains in order to trade a greater share of output due to their lower cost of production, often in exchange for higher emissions that endanger the environment and cause developed countries to lose competitiveness. In order to counter the loss of competitiveness and to motivate developing countries to participate in climate change adaptation and green investment, the Carbon Border Adjustment Mechanism (CBAM) has been introduced as a policy instrument that binds European countries to impose a tariff on the import of carbon-intensive goods. This article discusses some issues that may have implications for a carbon tariff on green investment in exports. Further, it highlights its ambiguity when the consumer cannot distinguish between high-value clean goods and low-value dirty goods, and the existence of low-value consumers in the absence of clear public information on quality differentiation. Using a simple Bayesian game, authors found that the incentive for green investment in response to a carbon tariff declines under this situation, even if the signals for true types are high. The paper shows while CBAM may motivate developing countries to take climate action, it does not promise to encourage investment in clean goods exports. JEL Classification: F18, Q2
Due to large backward and forward linkages, the manufacturing sector holds a key place in any economy of the world. The importance of this sector increases even more when the economy is at a developing stage, moving away from agriculture dominance towards industrial and services sectors. This article attempts to examine the impact of social security benefits on manufacturing productivity in India while controlling for wages and trade openness. Study has been carried out while using the autoregressive distributed lag (ARDL) bounds testing approach on annual time series data for the period 1982–2019. The results revealed that social security benefits, trade openness and wage rate have a significantly positive impact on manufacturing productivity in the short run as well as the long run, while manufacturing output uncertainty has a negative but insignificant impact. These findings highlight the significance of both economic and social policies in fostering sustainable productivity growth in India’s manufacturing sector. JEL Classification: D1, I3
The digital revolution in Asia plays as an engine towards sustainable economic growth. The governments of this region are thriving in increasing spending on digital infrastructures that enhance connectivity and ultimately reduce the digital divide. This study theoretically uses simple models to show the contribution of digital technologies to growth and total factor productivity (TFP). Furthermore, this study empirically explores the nexus between the dependent variables [log of gross domestic product (GDP) per capita and TFP] and explanatory variables [e-government index, information communication technology (ICT), e-participation index, online service index, human capital index, telecommunication index and institutions] for 47 Asian countries across the period 2002–2023 by using the fixed effects (FE) model. Analysis is constructed for all Asian countries, advanced Asian economies [countries with gross national income (GNI) per capita ≥ $ 4,516 ] and low-income Asian economies (countries with GNI per capita ≤ $ 4,515 ). On average the results show that ICT raises the living standards (GDP per capita) in all three groups. ICT increases TFP in all three groups. JEL Classification: D2, F2
