Capita Growth Rate Research Articles

Does International Fragmentation of Production and Global Value Chains Participation Affect the Long-run Economic Growth?

This article aims to investigate whether the international fragmentation of production and the global value chains (hereafter GVCs) participation affects the economic growth for a set of 40 advanced and emerging economies. It considers four aspects related to the type of participation and position in GVCs captured by different value-added measures: (a) vertical specialisation index; (b) GVC participation index; (c) GVC position index in low-tech sectors; and (d) GVC position index in high-tech sectors. A panel autoregressive distributed lag (PARDL) model is pioneeringly employed to capture the long-term relationship between economic growth and our four measures for annual value-added data from 1995 to 2011, provided by the World Input–Output Tables (WIOT). The main long-run results indicate that (a) higher levels of international fragmentation of production and GVCs’ participation ensure higher GDP per capita growth rates; (b) the fragmentation and GVCs’ participation are more important to GDP growth than the gross exports as a percentage of GDP; (c) GVCs’ participation index, which considers both the ‘forward’ and ‘backward’ participation, is less important than the vertical specialisation, measured by the foreign intermediate imports; and (d the countries engaged in upstream positions in low-technology GVCs were positively and significantly benefitted in terms of growth. JEL Codes: F14, F43

Innovation or Imitation: Empirical Test Based on EPS Global Statistics

Technological progress is an important embodiment of innovation‐driven, but also the main determinant of sustained economic development. Technological advances lie in the introduction of technology, learning, imitation, and independent research and development. The introduction of technology to developing countries can accelerate technological progress, reduce the technology gap, and promote sustained and rapid economic development. If the technology gap between developed and developing countries is, in fact, gradually shrinking, then the continual introduction and imitation of new technology can easily lead to “path dependence” and technical bottlenecks in developed countries. This trend may also be unfavorable for the protection of intellectual property rights. Due to the externality of knowledge and the cost of imitation, there exists an internal Nash equilibrium point between the R & D strategy and the imitation strategy. In this article, we use population dynamics and the replicon dynamics of R & D and imitation, as well as equilibrium conditions, to optimize the investment path of the enterprise. The balance between the number of R & D and the number of imitators depends on the proportion of the output elasticity of the R & D enterprise. Due to the existence of this balance, the rate of technological progress and the rate of capital growth were found to increase in proportion. Our empirical analysis confirmed this result and found that the transnational flows of the factor affect stability. Therefore, innovation‐driven technological progress was found to be an important determinant of sustained economic growth.

Vietnam's economic growth in 2010 – 2020

The article is based on secondary data sources collected from the World Bank and Vietnamese authorities and approaches from the perspective of qualitative research through descriptive and comparative statistical analysis to assess the status of Vietnam's economic growth over the period 2010 - 2020 based on Indicators measuring economic growth rate including real GDP growth rate, GDP per capita growth rate and average real GDP growth rate. Research results show that Vietnam achieves and maintains a relatively high economic growth rate in the period 2010-2020, especially in 2020 when the economy faces many difficulties and challenges posed from the COVID-19 pandemic situation, but Vietnam's economy still maintains a positive growth rate as well as a positive growth of GDP per capita. Despite achieving remarkable economic growth during this period, when comparing real GDP and GDP per capita with other countries in the ASEAN region, these indicators of Vietnam are still quite low and there is a significant difference compared to other countries in the region. At the same time, the article also outlines several reasons for the comparatively low economic growth of Vietnam. On that basis, the article proposes some recommendations to contribute to the growth of Vietnam's economy in the future.

On some control problems for Kolmogorov type systems

<abstract><p>The paper deals with some control problems related to the Kolmogorov system for two interacting populations. For the first problem, the control acts in time over the per capita growth rates of the two populations in order for the ratio between their sizes to follow a prescribed evolution. For the second problem, the control is a constant which adjusts the per capita growth rate of a single population so that it reaches the desired size at a certain time. For the third problem the control acts on the growth rate of one of the populations in order that the total population to reach a prescribed level. The solution of the three problems is done within an abstract scheme, by using operator-based techniques. Some examples come to illustrate the results obtained. One refers to a system that models leukemia, and another to the SIR model with vaccination.</p></abstract>

Bifurcation analysis of the predator\u2013prey model with the Allee effect in the predator

The use of predator–prey models in theoretical ecology has a long history, and the model equations have largely evolved since the original Lotka–Volterra system towards more realistic descriptions of the processes of predation, reproduction and mortality. One important aspect is the recognition of the fact that the growth of a population can be subject to an Allee effect, where the per capita growth rate increases with the population density. Including an Allee effect has been shown to fundamentally change predator–prey dynamics and strongly impact species persistence, but previous studies mostly focused on scenarios of an Allee effect in the prey population. Here we explore a predator–prey model with an ecologically important case of the Allee effect in the predator population where it occurs in the numerical response of predator without affecting its functional response. Biologically, this can result from various scenarios such as a lack of mating partners, sperm limitation and cooperative breeding mechanisms, among others. Unlike previous studies, we consider here a generic mathematical formulation of the Allee effect without specifying a concrete parameterisation of the functional form, and analyse the possible local bifurcations in the system. Further, we explore the global bifurcation structure of the model and its possible dynamical regimes for three different concrete parameterisations of the Allee effect. The model possesses a complex bifurcation structure: there can be multiple coexistence states including two stable limit cycles. Inclusion of the Allee effect in the predator generally has a destabilising effect on the coexistence equilibrium. We also show that regardless of the parametrisation of the Allee effect, enrichment of the environment will eventually result in extinction of the predator population.

Empirical Analysis of Foreign Direct Investment on Economic Growth: Evidence from the East African Community

This paper empirically examines the impact of foreign direct investment on economic growth in the East Africa Community throughout 1970-2017. The study used Pedroni test of cointegration for testing long-run relationship and VECM to inspect the long- run and short-run Granger causality between FDI and economic growth. The paper confirmed the integration of order one among the variables at the first difference. The results from Pedroni cointegration and VECM found that FDI is statistically significant and positively associated to economic growth in East Africa Community country members. The gross capital formation also is affirmative and statistically noteworthy connected to economic progress in the region, while inflation and Population growth were found as statistically significant and negatively correlated with economic, and thus, government final consumption expenditure and trade respectively are negatively and positively statistically insignificant. The VECM Granger causality exploration discovered the bi-directional Granger causality between GDP per capita and population growth rate; FDI and population growth rate, and gross capital formation and population growth. As well, unidirectional Granger causality was found among some variables. On the policy perspective, the study recommended the EAC members to strengthen the foreign direct investment policy through inducements to investors, availability of basic infrastructure, and establishment of the better macroeconomic environment.

Real Convergence in the European Union. Bridging the Gap between the New and Old Member States

One of the fundamental pillars of the European Union aims at the convergence of economic performances among its Member States. This objective has become increasingly challenging with the advancement of the integration process from the customs union to the economic and monetary union, from the six founding Members to twenty-seven European states. The aim of this paper is to study real convergence in the European Union between 2000 and 2019 and conducting also a comparative analysis between the New and the Old Members. The methodological tools imply absolute and conditional β- and σ-convergence. By using cross-sectional regressions, we have found evidence in favour of the absolute β-convergence hypothesis, as the initially poorer Members experienced higher GDP per capita growth rates than the developed economies. The average catching-up speed in the European Union was 2.5%, while the Central and Eastern Members experienced a higher convergence rate, which reached 3.6%. Moreover, by applying panel regressions, we have found evidence supporting the conditional convergence hypothesis, the study emphasising the role of macroeconomic, social, and governance-related variables in promoting economic growth. Our research suggests that investment and trade had a major role in enhancing economic growth both at the aggregate and subgroup level. Finally, the paper illustrates that β-convergence was accompanied by a reduction of disparities within the European Union. However, the global financial crisis hampered the convergence process among the Old Members. The paper suggests that although the Central and Eastern European countries made important progress in terms of catching-up, convergence of economic performance in the European Union has not been reached so far. By contrast, the modest growth rates and the exacerbation of income differentials between the Old Members might call into question the perspective to achieve this objective in the short term.

Pay-as-You-Go Social Security and Educational Subsidy in an Overlapping Generations Model with Endogenous Fertility and Endogenous Retirement

Abstract This study analytically investigates the effects of pay-as-you-go social security and educational subsidies on the fertility rate, retirement age, and GDP per capita growth rate in an overlapping generations model, where parents invest resources toward their children’s human capital. We find that an old agent retires fully when his or her labor productivity is low and retires later when the labor productivity is high. Under the unique balanced-growth-path (BGP) equilibrium, when an old agent is still engaged in work, tax rates are neutral to the fertility rate, higher tax rates encourage him or her to retire earlier, a higher social security tax rate depresses the GDP per capita growth rate, and a higher tax rate for educational subsidies can accelerate growth. However, when an old agent fully retires, higher tax rates increase the fertility rate, a higher social security tax rate lowers the GDP per capita growth rate, and a higher tax rate for educational subsidies boosts growth. Additionally, if an old agent’s labor productivity increases, the fertility rate also increases. We also conduct numerical simulations and analyze how an old agent’s labor productivity affects the retirement age, fertility rate, and GDP per capita growth rate under the BGP equilibrium.

Do macroeconomic fluctuations at destination matter in determining migrants’ return decisions?

• Relationship between macroeconomic fluctuations at destination and return migration is explored. • Positive growth at destination relative to home is associated with higher probability of return among Nepali migrants. • Magnitudes of the correlations make an inverse-U-shape across the foreign earnings distribution. • Nepali migrants’ return responses during the global financial crisis are more cautious than in general. Although a significant portion of migration is temporary, comprehension of factors at destination that can shorten or extend migrants’ stays abroad is still limited. One such unexplored factor is the macroeconomic fluctuation at the destination. Are migrants’ return functions of macroeconomic fluctuations at the destination countries? The question is explored empirically using the variation in Gross Domestic Product per capita growth rates between 2000 and 2009 in the multitude of destinations that Nepali migrants work. Return of Nepali migrants increases as the economy at the destination expands relative to that at home. Additionally, the magnitude and timing of the response vary respectively across foreign earning distribution and contexts.

Calculation and Measurement of China’s Human Capital after Comparing Human Capital with Technological Innovation

Human capital, as a synthesis of wisdom and physical fitness condensed in workers, is sometimes confused with technological innovation by existing literature. This paper makes comparisons between these two terminologies. Technological innovation is a short-term activity that attaches importance to economic benefits while human capital accumulation is a long-term strategic process with lifelong benefits, and human capital is the foundation of technological innovation. In empirical part, this paper adopts Solow Residual Method to calculate stock, elasticity and growth rate of human capital of 10 countries after eliminating physical capital, labor force and technological innovation. It is found that human capital stock in the United States is the largest and human capital growth in China is the fastest. Calculation is followed by measurement. We construct a comprehensive index of human capital by using Index Weight Assignment Method and Two-level & Three-factor CES Function to measure and predict human capital level in China. Both calculating and measuring results show that growth rate of China’s human capital is around 5%. In the future, for highquality economic development, China should give priority to human capital development and comprehensively improve human capital competitiveness.

An empirical test of a fundamental Harrod-Kaldor business cycle model

Going back to the roots of modern business cycle modelling, the paper advances a macroeconomic model of a most elementary (and now largely forgotten) cycle mechanism within a growth framework. Essentially, it combines a nonlinear Harrodian instability for a business sentiment index with Harrod’s and Kaldor’s old idea that firms tend to reduce investment if they have already built up high capacities relative to their assessment of the normal market potential. For greater realism, a previous version is augmented by a delay in the capital growth rate and by in general three random shock processes. This makes it possible to estimate the model on quarterly US data of utilization and a certain capital ratio. The focus is on an inquiry into the model’s goodness-of-fit, for which the method of simulated moments is a fruitful technique. Here, 14 fairly ambitious summary statistics that the model should try to reproduce allow a detailed diagnosis of its merits and demerits. The results are sufficiently encouraging and form a sound basis for stepwise extensions of the model in future work, or for refinements in the estimation procedure.

О несостоятельности систем экономических индикаторов на примере индикаторов экономики знаний Всемирного банка

To assess the state and the possibility of development of the economy, countries, regions, due to neglect of the basic principles of the methodology of economic science, without empirical justification, various systems of indicators and indicators are introduced. To assess the consistency of the World Bank Group's knowledge economy index system, a correlation analysis of data on the value of knowledge indices, institutions, innovations, education, ICT, GDP per capita and economic growth rates of countries of the world was carried out, and the corresponding econometric models were constructed. A close positive correlation has been established between the values of all five indices for the countries of the world, per capita GDP. The close relationship between the values of all indices and per capita GDP shows that, due to multicollenarity, it is impossible to assess the complex im-pact of indices on per capita GDP. Thus, the system of indices can be considered redun-dant, and the problem of the cause-and-effect relationship remains unresolved. In addition, the values of all five indices are associated with a significant negative correlation with the magnitude of the growth rates. The results obtained indicate that the system of indicators - indicators of the knowledge economy, proposed by the World Bank Group, is untenable and cannot be productively used to reasonably assess the possibility of economic develop-ment of a country or region.

Determinants of Economic Growth in China

China is one of the strongest economies in the world which is only second to the United States. Over the past four decades, China was experiencing a fast economic growth and its rise from a developing country to a significant economic power is spectacular. The researchers try to identify main determinants of economic growth using annual data from 1982 to 2018.Multiple regression analysis using OLS method was employed to investigate the influence of each explanatory variable on the GDP per capita growth rate.
 The results indicate that the education level and foreign direct investment (FDI) inflows have positive and significant impact on economic growth while population growth has imposed a negative and significant impact on growth. As results suggest, education level has played a major role in achieving higher growth rates in China. At present, 4 per cent of China's total GDP is invested in education. If the government can promote education in China, it would promote economic growth further.
 This study proves that FDI inflows also have a significant positive influence on economic growth. China has imposed a number of restrictions on FDI inflows. However, according to the results of this study, if the policymakers can open up the economy to facilitate FDI inflows, it would promote economic growth in China significantly. Due to the one-child policy, China is still maintaining a very lower population growth. Due to this, China has faced a severe demographic problem of aging population. That problem has led to slow down the economic growth in China.
 Keywords: Economic growth, education level, foreign direct investments, population growth, China

African continental free trade area (AfCFTA): projected economic impact assessment under future warming in CMIP6

Launched on 1 January 2021, the African Continental Free Trade Area (AfCFTA) aims to bring together 1.3 billion people in a US$3.4 trillion economic bloc. The World Bank estimates that the AfCFTA could lift tens of millions of people out of poverty by 2035. Previous studies have shown that an increase in annual mean temperature can significantly affect economic growth. The AfCFTA economy will therefore be affected by future warming. However, without the AfCFTA, the impact of the increased annual average temperature on local economies could be severe, further depriving low-income African countries of economic recovery. To assess the damage to regional economic growth caused by future warming, trend analyses are conducted in the aggregated historical CFSR/NCEP and CMIP6 (GFDL-ESM4) climate projection data from 1979 to 2100 for different emission pathways over some major continental economic centres. The long-term impact of surface temperature increase on gross regional product (GRP) per capita growth rates are investigated by fitting CMIP6 daily and annual mean temperatures to a log-polynomial regression model. The results show that an increase in annual mean temperature will significantly affect the economic growth of low latitude and altitude regions compared to high latitude and altitude regions. Most emerging African economies and many member states of the African Union and AfCFTA are located in this low latitude zone. This makes the economies of the newly created AfCFTA very vulnerable to climate change. Several studies suggest that FTAs can help reduce the economic vulnerability of developing countries. The results presented here can contribute to better design and implementation of economic, trade and climate policies in the AfCFTA to mitigate the economic impacts of future warming.

How Does the Age Structure Affect Local Economies in the US?

This study examines the impacts of population aging on a wide range of economic indicators from a regional perspective. Many countries, including the United States, are experiencing demographic aging. This may have a dramatic impact on both the national and sub-national economies. However, there is little consensus about its impact on local sub-national economies. This study uses regional variation in age structure to explain economic outcomes at the metropolitan statistical areas (MSAs) level. In order to identify causal effects, Mahalanobis distances were calculated to identify the matched cities as instrumental variables. The study finds that regions with older age structures tend to have higher growth rates of GDP per capita and lower growth rates of unemployment, but such positive effects are likely to fade away in the long run. Additionally, there is no significant impact of age composition on income. The choice of variables is critical as it can lead to mixed results. The results are robust before, during and after the economic recession. Quantile regression is also used to explore potential heterogeneous effects among MSAs. The results show that MSAs, regardless of their size, are uniformly affected by the age structure.

The Adverse Impact of Air Pollution on China’s Economic Growth

This study empirically evaluates the impact of air pollution on China’s economic growth, based on a province-level sample for the period 2002–2017. Air pollution is measured by the concentration of fine particulate matter (PM2.5), and economic growth is measured by the annual growth rate of gross domestic product (GDP) per capita. A panel data fixed-effects regression model is built, and the instrumental variables estimation method is utilized for quantitative analyses. The study reports a significant negative impact of air pollution on the macroeconomic growth of China. According to our instrumental variables estimation, holding other factors constant, if the concentration of PM2.5 increases by 1%, then the GDP per capita growth rate will decline by 0.05818 percentage points. In addition, it is found that the adverse effect of atmospheric pollution is heterogeneous across different regions. The effect is stronger in the eastern region and in provinces with smaller state-owned enterprise shares, fewer governmental expenditures for public health services, and fewer medical resources. The study results reveal that air pollution poses a substantial threat to the sustainable economic growth of China. Taking actions to abate air pollution will generate great economic benefits, especially for those regions which are heavily damaged by pollution.

The Impact of Tax Reforms on EVA in the U.S.: An Empirical Examination

This paper examines the impact of tax reforms on EVA on the non-financial S&P 500 firms by examining how ROIC, WACC, and growth in Invested Capital were affected by the 2017 tax reform through paired sample t-tests. We find that while the tax cut has increased ROIC-WACC, it hindered growth in Invested Capital. Furthermore, due to the distribution of ROIC-WACC across the sample firms being negative on aggregate, the increase in ROIC-WACC, which is still a negative figure, multiplied by a growing capital base, resulted in a decrease in aggregate EVA. This leads to the discussion of a critical invested capital growth rate, at which a given change in ROIC-WACC results in no change in EVA, and a discussion of how different firms have their EVA affected differently depending on their ROIC-WACC and Invested Capital growth rate.

Performance of Foreign Direct Investment in Commercial Real Estate in Nigeria from 2006-2017

Performance of FDI in commercial real estate in Nigeria when compared to international benchmark figures is yet to be established and documented in literature. The aim of the study was to appraise the performance of FDI in commercial real estate in Nigeria from 2006 to 2017 in a bid to empirically assist foreign direct investors’ decisions on investing in the Nigerian commercial real estate sector. The objectives were to; ascertain and compare returns from foreign direct investments in commercial real estate in Nigeria with international benchmark; and to examine how FDI tax responsibilities in Nigeria compare with the global benchmark rate. The study adopted ex post facto research design, and the unit of analysis was selected foreign controlled commercial real estate investments in Lagos and Abuja. The study adopted the Jones Lang LaSalle benchmark settings for commercial real estate performance indicator due to its empiricism from an international perspective where yield is 5.7%, capital growth is 7% and rental growth is 5.5%. Data were collected on rental values, capital values, tax responsibilities, and was analyzed using T-test. The study showed a yield of 4%, (t = 6.364; p < 0.05) and a capital growth rate of 21%, (t = 1.592; p > 0.05), while there was no negative variation in FDI tax responsibilities in Nigeria and international benchmark rate cap of 30% (t = .8666; p > 0.05). The study recommended that property managers should practice tenant mix and flexible leases and spaces.

Orta Doğu ve Kuzey Afrika'da Kapsayıcı Büyüme: Küresel Finansal Krizden Öncesi ve Sonrası

In this study the macroeconomic fundamentals and structural factors which affect inclusive growth in 16 MENA countries before and after the Global Financial Crisis are investigated. A panel data fixed effects model is used in two time periods: 1996-2007 and 2008-2016. A measure of inclusive growth is defined by integrating economic growth and income inequality. In this way, the relative impacts of GDP per capita growth rate and change in Gini coefficient are accounted for. A wide range of factors such as environmental degradation, macroeconomic stability, fiscal discipline, globalization, human capital, life expectancy, and technological development appear to significantly affect inclusive growth performance in the MENA region.

An analysis of the impact of investment in public transport on economic growth of metropolitan cities in South Africa

Background: Over the years, the South African government has emphasised improving the metros’ socioeconomic infrastructures because these form an essential catalyst that can boost grassroots development. Despite the considerable increase in investments in transport infrastructure in the metros, the contributions of the metros where all these transport investments are concentrated appear to be making little use of it to promote their grassroots development.Objectives: The study investigated the impact of public transportation on the output growth of South Africa.Method: One-way error component panel analysis is adopted to analyse disaggregated data from eight major metros in the country from 2003 to 2017. Data were mainly sourced on public transport expenditure, total social infrastructure expenditure, total capital formation, labour expenditure and output growth rate from each of the metros.Results: The results were a clear departure from what was obtained by previous studies on transport expenditure and the growth of South Africa. Six of the metros which are the big ones in terms of the population showed a result, which indicated that public transport expenditure did not influence their output significantly; but when combined with other social infrastructure, it exhibited significant impact. However, the results of the remaining two small metros showed that public transport expenditure and its combination with other social infrastructure all had a significant impact on their output growth.Conclusion: This confirms transport infrastructure investment conforms to the theory of the diminishing marginal product of capital. The six big metros should invest more in social infrastructure, which would complement the contemporary transport infrastructure investment. On the other hand, there is still a need to increase public transport infrastructure investments on the smaller metros.