Cross-section Of Countries Research Articles

Scientific research, technology, and economic growth in a cross section of countries

ABSTRACT This paper aims to investigate the role of scientific research in the development of technology advancement and subsequent economic growth. The publication data collected from Science and Nature consists of 31,615 lines in Excel. Scholars from 3,790 universities and research institutes in 118 countries have published in the two premier journals over the period 2012–2019. Using these publication data, we explore two transmission channels: first, research output can be used for the development of innovations and inventions; second, such a technological advancement promotes economic growth. Instrumental variable (IV) estimation suggests that scientific publications have a causal effect on the enhancement of advanced technologies; the technology enhancement, in turn, has a causal effect on economic growth. Empirical evidence in direct support of these two relationships provide major incentives for governments and business firms to invest more towards future research in the fields of science and technology.

Empirical investigation of dynamic relations among foreign direct investment, economic growth and poverty prevalence using African data

This study examined dynamic relations among foreign direct investment (FDI), economic growth and poverty headcount ratio using a sample of 24 African Countries. To achieve this goal, historical data of the variables regarding cross section of countries were collected over 14-year period. The stratified random sampling technique was employed in selecting the sample. Following pre-regression diagnostics, we specified Vector-Auto-Regression model for computation of coefficients of the variables in dynamic relations. These were complimented with computation of relative impulse response function and forecast-error-variance decomposition of regression estimates. We found that FDI did not granger-cause economic growth among African economies, just as growth was found not sustainable and inclusive enough as to achieve substantial poverty reduction. More-so, evidence appeared to support earlier isolated findings that FDI has been largely exploitative and attracted to economies with high growth rates and low poverty ratios. The study reinforces earlier isolated findings that it is not necessarily ‘growth’ that results in decline in poverty prevalence but ‘sustained economic growth’. Hence most developing nations that depend on annual fiscal plans for poverty reduction may consistently miss development targets. Again, contrary to widely held view that foreign direct development leads to economic growth, the study established exceptional case for Africa.

Sugar-sweetened beverage affordability and the prevalence of overweight and obesity in a cross section of countries

BackgroundA key component of ‘obesogenic environments’ is the ready availability of convenient, calorie-dense foods, in the form of hyper-palatable and relatively inexpensive ultra-processed products. Compelling evidence indicates that the regular consumption of soft drinks, specifically carbonated and non-carbonated sugar-sweetened beverages (SSBs), has a significant impact on the prevalence of overweight and obesity. However, to implement country-level effective prevention programmes we need to supplement this evidence with quantitative knowledge of the relationships between overweight/obesity and the main determinants of SSB consumption, notably SSB prices and consumers’ disposable income.MethodAffordability considers the simultaneous effects of both price and disposable income on the buying decision. The purpose of this study was to investigate the effect of SSB affordability on the consumers’ purchasing behaviour and weight-related health outcomes. Our study was divided into three parts. First, we computed SSB consumption and affordability for approximately 150 countries worldwide. Second, we estimated a demand function for SSBs to assess the impact of affordability on consumption at the country level. Third, we used a multivariate regression model and country data on the prevalence of overweight and obesity to test the role of SSB affordability in the current obesity epidemic.ResultsThe analysis reveals that SSB affordability: 1) showed both a large variability across countries and a clear tendency to increase substantially with the level of economic development; 2) played a key role in determining cross-country differences in the amount of soft drink consumed per capita; and 3) was significantly associated with the prevalence rates of both overweight and obesity. Specifically, we show that a 10 % increase in SSB affordability was associated, on average, with approximately 0.4 more overweight/obese adults per 100 inhabitants.ConclusionsBy controlling for the main possible confounding factors, our results clearly indicate that affordability is a major driver of purchasing behaviours and is significantly associated with the prevalence rates of both overweight and obesity. We thus suggest a fiscal approach to curb SSB consumption based on the effectiveness of ‘soda taxes’ to affect the long-term dynamic of SSB affordability.

Risk attitudes and entrepreneurial motivations: Evidence from transition economies

Most studies on risk attitudes of entrepreneurs do not distinguish between those who want to be self-employed and those who have to run their own business for survival, or entrepreneurs by choice vs. by necessity. We examine the relationship between individual risk preferences and likelihood of entrepreneurial entry among these two groups in a cross section of countries with transition economies. We obtain robust results that those with higher degree of risk tolerance are more likely to be self-employed by choice.

The PPP approach revisited: A study of RMB valuation against the USD

We analyze the alleged undervaluation of the Chinese renminbi against the US dollar through an application of the relative PPP hypothesis, the PPP approach. The PPP approach measures the relative misalignment of a currency by estimating the relationship between log price levels and log per capita real incomes from a cross section of countries. We estimate this relationship by using ICP 2011 and incorporating model selection tests. Our results confirm that price level-real income relationship is best approximated by a quadratic functional form. We show that, using this functional form, the PPP approach does not reveal any evidence of renminbi undervaluation as of 2011, and this result is robust to various sensitivity tests.

Re-Examining Vicious Circles of Development: A Panel Var Approach

Using panel data from 102 countries in 1975–2010, this paper explores the dynamic interaction among health, education and growth by applying panel VAR techniques. Empirical findings reveal that the predictive pattern among health, education and economic growth is not stable in the cross section of countries. While health has positive contribution to growth for all countries, education has benefited only higher middle income and high-income OECD countries. Economic growth has predictive power for the components of human development in the high-income OECD countries. Further, econometric evidence reveals that bi-directional relationship between health and education should be supported to reap the benefits of human development on economic growth.

Determinants of Long-Term Economic Growth Redux: A Measurement Error Model Averaging (MEMA) Approach

This paper estimates determinants of long-run growth rates of GDP per capita in a cross section of countries. We propose a novel Measurement Error Model Averaging (MEMA) approach that accounts for measurement error in international income data as well as model uncertainty. Estimating the model using eight vintages of the Penn World Tables (PWT) together with other proposed growth determinants, we identify 18 variables related to economic growth. The results are robust to allowing for outliers in the form of heteroscedastic model errors.

Trade and Income in the Long Run: Are There Really Gains, and Are They Widely Shared?

In the cross section of countries, there is a strong positive correlation between trade and income, and a negative relationship between trade and inequality. Does this reflect a causal relationship? We adopt the Frankel and Romer (1999) identification strategy, and exploit countries' exogenous geographic characteristics to estimate the causal effect of trade on income and inequality. Our cross-country estimates for trade's impact on real income are consistently positive and significant over time. At the same time, we do not find any statistical evidence that more trade increases aggregate measures of income inequality. Heeding previous concerns in the literature (e.g. Rodriguez and Rodrik, 2001; Rodrik, Subramanian and Trebbi, 2004), we carefully analyze the validity of our geography-based instrument, and confirm that the IV estimates for the impact of trade are not driven by other direct or indirect effects of geography through non-trade channels.

Trade and Income in the Long Run: Are There Really Gains, and are They Widely Shared?

In the cross section of countries, there is a strong positive correlation between trade andincome, and a negative relationship between trade and inequality. Does this reflect a causalrelationship? We adopt the Frankel and Romer (1999) identification strategy, and exploitcountries' exogenous geographic characteristics to estimate the causal effect of trade onincome and inequality. Our cross-country estimates for trade's impact on real income areconsistently positive and significant over time. At the same time, we do not find anystatistical evidence that more trade increases aggregate measures of income inequality.Heeding previous concerns in the literature (e.g. Rodriguez and Rodrik, 2001; Rodrik,Subramanian and Trebbi, 2004), we carefully analyze the validity of our geography-basedinstrument, and confirm that the IV estimates for the impact of trade are not driven by otherdirect or indirect effects of geography through non-trade channels.

The transparency curse: Private information and political freedom

I offer a model of the sustainability of authoritarian rule in which the transparency of productive economic activity enables the ruler to distinguish productive economic activity from preparations for rebellion. The less transparent the productive technology the greater the economic side effects of maintaining authoritarian rule, and the stronger the incentives to liberalize the regime. Using a cross section of countries I provide evidence that, consistently with the theory, democratic government Granger causes internet penetration.

Net foreign assets and macroeconomic volatility

This study analyses the co-movements of net foreign asset accumulation, consumption, real exchange rate, and real interest rate in a cross section of countries. Our sample covers both industrial and developing economies, spanning 1981–2010 period. We find that the accumulation of net foreign assets is associated with increasing consumption and real exchange rate appreciation. In a cross section of countries, when a country increases its net foreign assets to GDP ratio by a one-standard deviation, consumption to GDP increases by 0.02% per year and real exchange rate appreciates by 2% per year. Consumption to GDP responds more positively to net foreign asset accumulation in G7 countries, +0.1 to +0.2% per year, while the response is smaller and negative in developing countries reporting a −0.02% per year. The real exchange rate appreciation, however, is about +3% per year in developing countries and only about +0.2% per year in OECD countries.

Survey Expectations of Returns and Asset Pricing Puzzles

Survey expectations of returns negatively predict future returns both in the cross section of countries and in the time series in three major asset classes: global equities, currencies, and global fixed income. While past returns and survey expectations of economic growth explain some of the variation in survey expectations of returns, the residual variation in survey expectations of returns also predicts future returns in all three asset classes. We find that the variation in expected returns that is related to survey expectations of returns is positively correlated with the amount of excess volatility across international equity markets.

The Cost of Living and Terror: Does Consumer Price Volatility Fuel Terrorism?

Do fluctuations of consumer prices prompt terrorist activity? A latent assumption among conflict scholars is that price volatilities for basic consumer goods produce hardships for people that increase popular grievances, damage government legitimacy, and raise the chances for terrorism. In this study, I use a series of regression estimations to test volatility in consumer price indices for energy, housing, and foods as predictors of domestic and transnational terrorism in a cross section of countries. I produce several findings. First, food price fluctuations are significant predictors of multiple measures of terrorism, while energy and housing prices are not. Second, rapid food price increases, not decreases, promote terrorist attacks. Third, the relationship between food price volatility and terrorism is most consistently present in nondemocratic and “hybrid” political regimes and in medium human development countries rather than in democracies or in countries characterized by very high or very low economic development.

Tobacco control and obesity: evidence from a cross section of countries

Although several studies of highly developed countries find tobacco control efforts impact obesity rates, whether such results extend to less developed countries is unclear. Accordingly, this study re-examines this issue by using data from countries that lie across the development spectrum. Similar to the existing literature, evidence suggests higher cigarette prices increase the per cent of the population that is overweight or obese. Yet, other tobacco control efforts have less influence. A number of other factors, including health-care expenditure, urban concentration and undernourishment, are also found to influence population weight.

Does trust favor macroeconomic stability?

This paper investigates the relationship between trust and macroeconomic volatility. An illustrative model rationalizes the relationship between trust and volatility. In this model, trust relaxes credit constraints and diminishes investment’s procyclicality. I provide empirical evidence for the basic predictions of the model. Then, I show that higher trust is associated with lower macroeconomic volatility in a cross section of countries. This relationship persists when various covariates are taken into account. I use inherited trust of Americans as an instrumental variable for trust in their origin country to overcome reverse causality concerns. Using changes in inherited trust over the 20th century, I do not find clear evidence that increasing trust is also associated with decreasing volatility across time at the country level.

The Democratic Factor in the Education‐Growth Relationship

SummaryWhile the incidence of education on the determination of personal income has been well documented by scholars, the same is not true when it comes to the effects of education on economic growth, where different data sets and models have yielded contradictory results. This paper shows that a democratic environment is favourable to the impact of education on economic growth, even if democracy itself may not have a direct effect. This can be at least part of the explanation for why education alone, when observed in a cross section of countries, has shown mixed effects on growth.

Turkey's per Capita Income Conversion to Southern European Countries

In this paper we have estimated the number of years for Turkey’s per capita income to converge with those of Italy, Spain, Portugal and Greece. The estimate is based upon convergence theory of per capita income of laggard countries to that of advanced countries if (1) there exists a gap between the countries’ initial level of per capita income with the laggard country having the lower per capita income, (2) there exists a per capita productivity growth rate differential in favor of the laggard country and (3) sufficient time horizon considered to effectuate the convergence. In this instance all three conditions are met and assumed. According to our calculations, Turkey’s per capita income will converge with Portugal in 33 years, Greece in 39 years, Italy in 46 years and Spain in 62 Years, all within the 21st century time horizon. In addition the empirical and theoretical basis for conversion of per capita income is elucidated and verified. Using a wide cross section of countries we find evidence of unconditional income convergence looking at both the mean as well as at the entire income distribution via ordinary least squares and quintile regression respectively. We also analyzed the presence of an S-shaped growth curve for explaining the observed rapid progression of convergence and its impact on the expected future global income distribution.

Tourism and Growth in a Cross Section of Countries

The authors provide an empirical assessment of the relationship between tourism specialization and economic growth by updating the findings of previous papers written on this issue. They use data for more than 150 countries, covering different time spans between 1980 and 2005. Contrary to previous findings (for example, Brau et al, 2004 and 2007), tourism-based countries did not grow at a higher rate than non-tourism-based countries, except for the 1980–1990 period for which, however, the data on international tourism were not fully reliable. Estimating visitor spending through the segmentation approach has several advantages in terms of policy evaluation, user management and sampling design. This approach generally relies on visitor surveys to estimate two parameters, average spending per segment and segment share, so that total visitation can be apportioned to each subgroup. Equivalently, this approach is to estimate the weighted average spending by taking into consideration the relative shares of each user segment. This paper first provides a statistical formula to compute the variance of weighted average spending by taking into account the stochastic nature of spending and segment shares. Second, simulation analysis is adopted to compare the accuracy and precision of the spending estimator based on different study designs. The results show that conducting additional short surveys to obtain information on user segments provides two advantages. First, it helps to reduce non-response bias since certain visitor groups have higher ratios of unreturned questionnaires, incomplete data or non-participation. Second, it helps to decrease the variance of the estimator so that the upper and lower bound of the confidence interval can be narrowed. The level of variance reduction will depend on the relative segment shares, the average spending, cases that are obtained, spending variation and the probability of giving full spending information across segments. The implications for survey design are offered in light of the results. This study examines the impact of the Federal Reserve (Fed) monetary policy on US hospitality stock returns. Specifically, this research paper investigates the stock performance of US hospitality firms under different Fed monetary policy regimes. Hospitality companies include gambling firms, lodging companies and restaurants. Changes in the discount rate and federal funds rate are used to measure shifts in the Fed monetary policy and to classify the full monetary policy period as either a restrictive or an expansive monetary policy environment. An expansive monetary condition is a period with a decrease in the discount or federal funds rate; a restrictive monetary environment experiences an increase in the discount or federal funds rate. Empirical test results reveal that the influence of the two monetary policy indicators on hospitality stock returns varies to a great extent. The stock returns of US restaurants are related significantly to changes in the federal funds rate. However, changes in the discount rate generally have no strong impact on US hospitality stock returns.

Channels through Which Human Capital Inequality Influences Economic Growth

This paper empirically investigates the theoretical predictions of some of the channels through which human capital inequality may discourage investment and growth. In a cross section of countries over the period 1960–2000, findings reveal that, all other things being equal, a greater degree of human capital inequality increases fertility rates and reduces life expectancy, which in turn hampers the accumulation rates of human capital. This effect is reinforced in the countries where individuals find it difficult to access credit. Extensive sensitivity analyses show that the results are robust across specifications and are not driven by atypical observations, endogenous regressors, or unobservable heterogeneity.

Trade specialization, export productivity and growth in Brazil, China, India, South Africa, and a cross section of countries

The paper analyses the patterns of export productivity and trade specialization profiles in Brazil, China, India and South Africa, and in other economic groupings and regions. Various measures of trade specialization and a time varying export productivity indicator are estimated using highly disaggregated export data. The findings reveal that there are important differences in the export productivity and specialisation patterns across countries and regions. Export productivity—and export sophistication—are in line to that of wealthier and more advance economies. The results further confirm the importance of not just the volume of exports, but the type of specialisation patterns.