Developed Economies Research Articles

The Impact of Market Orientation on the Performance of Microfinance Institutions in Yemen, a Least-Developed Country: the Mediating Role of IT Capability

The Impact of Market Orientation on the Performance of Microfinance Institutions in Yemen, a Least-Developed Country: the Mediating Role of IT Capability

Intellectual property rights and fair vaccine distribution: A new perspective on the TRIPS Agreement

The COVID-19 pandemic has highlighted inequities concerning global vaccine distribution, as well as issues surrounding patents and intellectual property rights for these vaccines. This paper addresses the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) regarding vaccines. Adhered to by all state members of the World Trade Organization (WTO), the agreement sets minimum regulatory standards for governments on intellectual property, including vaccines. Our contribution is a new analysis of TRIPS Art. 31 Bis concerning flexibilities in its terms of use on global vaccine distribution. We consider existing solutions for fairer vaccine distribution, such as governments enforcing a compulsory vaccine licence, and governmental/individual charitable efforts. We then focus on issues with know-how distribution and access to knowledge in the TRIPS context. We conclude that the enhanced provisions of TRIPS are ill-suited to global pandemics. To ensure fairer global vaccine distribution, we argue that patent pools and further TRIPS amendments are needed to endow less and least-developed countries with the ability to implement government-use compulsory licenses and to negotiate compensation terms later under judicial review. Further, to enable countries lacking the technical manufacturing capabilities to produce vaccines under license, TRIPS needs to be amended to permit technology and know-how transfer (Holder, 2023).

Randomized experimental population-based study to evaluate the acceptance and completion of and preferences for cervical cancer screening.

Cervical cancer has high incidence and mortality rates, especially in less-developed countries. Prevention methods are well established, but there are still barriers preventing some Brazilian women from undergoing a Pap sample. The objective of the study was to evaluate the acceptance, preferences and completion of four screening methods. This has an experimental design (community trial). A total of 164 participants who had never had a Pap sample or had not had one for more than three years were included. The city's urban area was stratified by census tracts and divided according to income and education levels. Women belonging to the lower-income strata were considered in the study. Random blocks were numbered into five intervention groups (Group 1- Pap sample at the hospital; Group 2- Pap sample in the mobile unit; Group 3- urine self-collection; Group 4- vaginal self-collection; Group 5- woman's choice). Only 164 women met all of the eligibility criteria (15.3%). Most of them accepted the assigned method (92%), but only 84% of the women completed the collection step. The acceptance rates were as follows: Group 1 (100%), Group 2 (64.5%), Group 3 (100%) and Group 4 (91.4%). In Group 5, the women's preferences were distributed as follows: examination performed at the hospital, 13 women (33.3%); examination performed at the mobile unit, 11 women (28.2%); urine self-collection, 11 women (28.2%); and vaginal self-collection, 4 women (10.3%). This study suggests that methods that allow cervical sampling collected near the women's domicile might improve the acceptance and completion of preventive tests. This finding is relevant for the development of new cervical cancer screening strategies.

Diagnosis on the implementation of the New Urban Agenda

Abstract Non-technical summary Rapid population growth in urban areas requires an effective transposition of sustainable development goals to the urban realm, for which the New Urban Agenda was adopted by most countries worldwide. The progress report of its implementation was discussed in this study to identify strengths and weaknesses in the process that assist nations in the design and application of effective actions to achieve a more sustainable urban development. Technical summary The adoption of the 2030 Agenda represents a daunting challenge for countries worldwide, which found its continuation in the New Urban Agenda (NUA) geared predominantly toward urban settlements. Although the achievement of the sustainable development goals (SDGs) has been widely monitored by global and national institutions, the progress of the NUA has not been properly addressed to date. With the purpose of filling this gap, this study aims to gauge the implementation level of the NUA through the analysis of all status reports issued hitherto by countries, on the basis of the reporting template designed to this effect by the United Nations. Findings revealed the scarce attention paid to report national progress on the application of the NUA, particularly marked in the most developed economies. Reporting guidelines showed a poor coverage of the SDGs, being mostly focused on a limited number of these as well as the institutional and economic dimensions. The low level of NUA implementation and the questionable effectiveness of the reporting framework for monitoring are main conclusions. Some recommendations were lastly suggested to enhance the application process of the NUA. Social media summary Most countries worldwide show little interest in the application of the New Urban Agenda.

Investigating the Nexus of Control of Corruption, Green Finance, and Environmental Upgradation in Developed Economies

This comprehensive study investigates the intricate relationships among three pivotal components: green finance, corruption control, and ecological footprint, with the primary objective of revealing the synergies shaping sustainable development. The research examines how environmentally aligned financial practices, effective anti-corruption measures, and responsible resource management collectively influence the ecological footprint within the top 10 developed economies, offering insights into strategies for fostering sustainable growth. Ecological footprint (EFT) data was obtained from the Global Footprint Network, while green finance (GFIN) data was sourced from the Asian Development Bank. The panel data used in the study spanned 18 years from 2000 to 2018 for the 10 selected countries. To address issues of endogeneity and unobserved heterogeneity, the system generalized method of moments (GMM) was employed for hypothesis testing. By employing advanced modeling techniques, particularly the system generalized method of moments, the study verifies the positive impact of green finance in reducing the ecological footprint and carbon emissions, providing actionable insights for policymakers and practitioners in the OECD. Formulating two hypotheses, it assesses the positive relationship between green finance (GFIN) and ecological footprint (EFT) while considering control variables, and the negative relationship between GFIN and carbon emissions (CO2). Furthermore, it underscores the significance of control variables, such as control of corruption, population, GDP, and trade openness, in influencing ecological footprints and carbon emissions. These findings contribute invaluable insights for policymakers and stakeholders, guiding the path toward sustainable practices and a greener future in developed nations.

Corporate disclosure and earnings management: The moderating role of corporate governance mechanisms

Notwithstanding the enormous amount of regulation and standards governing the financial reporting process, corporate failures and prior research have strongly indicated that earnings management (EM) is becoming a regular business practice in most firms today. Although this practice is more common in developed economies, there is limited research on corporate governance (CG) failures that have occurred in East Africa’s emerging economies. In this study, therefore, we examine whether corporate governance mechanisms (CGM) moderate the association between corporate disclosure (CD) and EM using evidence from listed firms at the Uganda Securities Exchange (USE). We employ disclosure and corporate governance indices to measure the extent of CD and corporate governance. Additionally, we use the magnitude of discretionary accruals (DACC) obtained from the modified Jones model as a proxy for EM. We find that audit committee (AC) characteristics have a negative and significant moderating effect on the association between CD and EM. Our study contributes to the growing strand of literature on the moderating or complimentary effect of CGM in constraining EM in the context of an emerging economy.

Green Financing for Sustainable Development in Infrastructure Projects in Kenya

Transitioning into a decarbonized economy requires an unprecedented level of new capital investment, particularly in the form of green finance. Market and regulatory trends indicate that there is an increased interest in green and sustainable finance among investors and policymakers. However, capital mobilization for green investments has been constrained by microeconomic obstacles including maturity mismatches between long-term green investments; the typically short-term time horizons of investors and disintegrated financial and environmental policy approaches. It’s against this backdrop that the study intended to assess the green finance trends, green finance instruments and the challenges on green finance adoption.The study adopted desk review also known as Meta-analysis method to extract information concerning green finance trends, instruments and adoption challenges. The study established that to achieve sustainable development goals (SDGs), its necessary to open-up green projects and scale up the financing of investments that provide environmental benefits through innovative financial instruments and new policies such as green bonds, green banks, carbon market instruments, fiscal policy, green central banking, financial technologies and community-based green funds. However, Financial institutions show more interest in fossil fuel projects than green projects because of the low returns and risks associated with green investment compared to brown investment. To reduce the risk of green investment and increase the rate of return to the investors, the creation of green credit guarantee schemes and tax return on revenue generated from the green energy spillover effect is necessary. In conclusion green finance market is well structured in developed economies unlike developing economies due to underdeveloped capital markets, regulatory gaps and unstandardized green taxonomy.Thus the study recommends the development of green finance database and incorporation of green agenda in public policy institutions’ mandates and procurement;Standardization and information disclosure regarding Green investment risks, green taxonomy and commoditization of environmental factors into tradable assets; Raising awareness; Offering tax incentive on green projects; Developing Carbon Capital Markets; Stock Trading of Green finance products; Strengthen the social responsibilities of investors and Technology adoption.

Older adult consumers and local competition in the healthcare service

AbstractPopulation aging is a global phenomenon observed in many developed economies. On the one hand, this trend suggests significant opportunities for healthcare providers due to increasing service demand. On the other hand, it also implies that the industry requires new managerial knowledge to accommodate older adult consumers. In this research, we propose and examine the impact of older adult consumers on healthcare provider performance and identify boundary conditions related to two types of competition: intra‐ and inter‐competition. Using longitudinal data on healthcare provider revenues, we find that an increase in the older adult population increases the revenues of generalists but decreases those of specialists. Second, the positive effect of elderly consumers on generalists is amplified when intra‐competition (from same‐type physicians) increases and diminishes when inter‐competition (from different‐type physicians) intensifies. Third, for specialist healthcare providers, the negative impact of older adult population is mitigated by intra‐competition but exacerbated when inter‐competition becomes strong. Our results offer theoretical implications for the healthcare service marketing literature and managerial insights into decisions related to healthcare service locations. Specifically, our findings suggest that healthcare providers need to carefully consider the proportion of older adult consumers, the presence of local competitors, and their own specialties, as these factors all have a meaningful impact on performance.

РЕГУЛЮВАННЯ ЕКОНОМІКИ КРЕДИТНИМ МУЛЬТИПЛІКАТОРОМ

The author asserts that the credit multiplier of the country’s banking system regulates the growth of the economy and characterizes the level of its development and prove that the limiter and indicator of economic development is the share of value added by production in the aggregate product, which determines the existing technological mode. It is proved that the ratio of nominal GDP to the monetary base of the Central Bank is identical to the product of the credit multiplier and the speed of money circulation that is constant for each technological mode. We consider the industrialized economies, developed economies, and highly developed economies. The marginal zero inflation multiplier is determined, at which real GDP growth stops and a transition to a deflationary crisis occurs. It is established that the Central Bank’s increase in the interest rate to reduce inflation leads to a sharp decrease in the multiplier and lending to production, while credit regulation allows us to reduce inflation by targeting, without changing the interest rate and without reducing lending. A model for regulating the economy with a credit multiplier has been developed using an engineering calculator and Ukraine’s economic recovery in 2024–2025 has been simulated. Keywords: economy, credit regulation, market, balance, labor, capital, money, credit multiplier, interest rate, currency, financial papers, crisis, inflation.

Research on the institutional environment of the green economy: foreign and domestic experience

The article presents an overview analysis of current trends in the development of a green economy through the prism of institutional frameworks both at the global and domestic levels. The main aspects of the formation of an institutional environment conducive to sustainable economic growth are analyzed, taking into account the experience of foreign countries and domestic research in this area. An overview of the main trends and institutional factors influencing the green economy is presented . Key points are analyzed, such as the impact of environmental challenges on the formation of economic policies, the implementation of environmentally oriented laws and initiatives, the development of sustainable production and consumption patterns, and the role of innovation and green technologies in creating new opportunities for economic growth. The article presents a comprehensive analysis of institutional aspects that influence the development of the green economy in the global and domestic context. The study is based on a review of foreign experience in countries with developed green economies, such as Sweden, Germany, and the experience of the Russian Federation in adapting institutional mechanisms. The article examines key aspects of the institutional environment, such as legal norms, financial mechanisms, political strategies and regulatory mechanisms that contribute to the formation and development of a green economy. The results of the study highlight the importance of effective institutional governance for the development of a green economy and the need for efforts towards creating a more suitable institutional environment conducive to sustainable environmental development.

АНАЛІЗ ЗОВНІШНЬОЇ ТОРГІВЛІ ТОВАРАМИ УКРАЇНИ З КРАЇНАМИ ЄВРОПЕЙСЬКОГО СОЮЗУ

The article is devoted to the study of foreign trade in goods of Ukraine with the countries of the European Union (hereinafter – the EU) with the identification of priority partners for the purpose of diversification and activation of foreign trade cooperation. It was emphasized that the foreign trade of Ukraine is dominated by trade in goods, where a negative trade balance is formed, in particular, in trade with EU countries. In order to determine the key consumers of domestic goods among the EU-27 countries, an ABC analysis was conducted based on the volume of goods exported to them by Ukraine in 2016–2021. The distribution of EU countries into groups was carried out as follows: group A – countries that account for a significant volume of exports of goods by Ukraine (about 80% of the total volume); group B – countries with an average level of export supplies of goods from Ukraine (about 15%); group C – countries with a small volume of exports of goods from Ukraine (about 5%). ABC-analysis is complemented by XYZ-analysis, which allows to analyze and forecast the stability of export of goods to EU countries. Based on the results of the ABC-XYZ analysis, a conclusion was made regarding the expediency of supporting the volume and dynamics of trade cooperation with key EU partner countries in the export of goods – Poland, Italy, Germany, the Netherlands, Spain, Romania, the Czech Republic, Hungary, Slovakia, Austria, and the need to intensify efforts to increasing the export of goods to countries that in the medium term have the potential to become attractive markets for the consumption of domestic products – France, Bulgaria, Belgium, Lithuania, and to a lesser extent – Denmark, Greece and Latvia. At the same time, it is noted that the vast majority of these countries are highly developed economies of the European Union, and trade in goods with them for Ukraine is disparate. Therefore, it is important to continue cooperation with the EU regarding the signing of the Agreement on Conformity Assessment and Acceptance of Industrial Products, recognition of the equivalence of sanitary and phytosanitary measures for opening markets, and simplifying the export of food and agricultural products. It is also necessary to increase efforts to gradually open public procurement markets. The further liberalization of transport with the EU, the conclusion of agreements in the field of road, inland water and railway transport are also important.

Государственные инвестиции и устойчивость мировой экономики

As history shows, in difficult periods, there is invariably an increase in the state’s involvement in economic life. As of now, there is a number fundamental macrotrends showing that the world fell into a highly dangerous situation of so called polycrisis. These include more and more evident dysfunction of the US-centric model of globalization, the inexorable formation of new independent centers of international power, extremely high level of geopolitical turbulence. The global financial and economic sphere continues to function due to massive debt pumping which translates to its underlying fragility. That is why the formation of an efficient system of sustainable development, as proclaimed in the UN SDG program, is so urgent. In order to overcome the current state of instability the world economy needs to found and engage stable and reliable sources of long-term capital instead of borrowed money. Such capital is available with the institutional investors, primarily the sovereign wealth funds and pension funds. As for the first ones, in recent years, they have noticeably diversified the goals, directions and objects of their operations. The changes are so serious that a term “sovereign wealth funds 3.0” entered into the analytical discourse. In the activities of most state investors, there is a tendency to shift the focus from the external to the internal one, which does not allow capital to completely dissolve in the global financial system. The geographical priorities of investment are changing: if initially the focus of state funds was on the most developed economies of the world, now it is beginning to shift towards the world majority, which in the future should contribute to a more equal distribution of productive forces and wealth and, as a result, to increase the stability of the world economy and improve the quality of its dynamics. “Sovereign wealth funds 3.0” are also characterized by new methods of funding, when it is provided by giving the fund the right to use cash flows generated by the state assets entrusted to it. Some sovereign wealth funds, having reached a certain level of maturity, enter the global private capital market, partially filling the deficit of reliable debt instruments observed there. Due to the peculiarities of financing and a long-term planning horizon, large sovereign wealth funds are able to painlessly absorb temporary financial losses, compensating them in the long-term perspective. This allows them to carry out the most important long-term projects. Thus, the state investment funds make a significant, though not always visible and appreciated, contribution into the stabilization of the financial market and the global economy at large.

Efforts of Nepal's Least Developed Countries (LDC) Graduation and Its Challenges

The primary objectives of this study are to examine the initiatives undertaken by the government of Nepal for LDC graduation, identify challenges faced during process, and discuss the potential impact of graduation. This study is based on qualitative analysis of secondary data obtained from diverse domestic and international sources. Major sources include literature reviews, government policies, reports, and international declarations. Comprehensive desk review on the issue shows that Nepal has undertaken a strategic plan for LDC graduation, prioritizing investments in human capital, infrastructure, and healthcare, while addressing income disparities. Nepal has already achieved two requirements; HAI and EVI, and Nepal fell significantly short of the LDC graduation threshold of a per capita GNI. The plan includes achieving Sustainable Development Goals (SDGs) and progressing from a lower-middle income to an upper-middle-income nation by 2030.Despite progress, Nepal faces challenges in achieving graduation, including political instability, governance issues, and environmental vulnerabilities. The country lags in good governance rankings, which could hinder its development efforts. Nepal's commitment to SDGs is seen as a potential driver for LDC graduation, focusing on sustainability, gender equality, clean energy, job creation, and economic development. Nepal aims to become a high-income country by 2043, emphasizing poverty reduction, trade balance improvement, and overall quality of life enhancement. Leaving the LDC category will bring opportunities but also challenges, including the loss of special market access that was provided to the least developed countries like Nepal. Other challenges may involve growing trade and market capacity and strengthening the global competitiveness of internal production. Internally, intersectional variations of inequalities and poverty among and between regions, castes and ethnic groups in Nepal may generate challenges meeting LDC graduations and its sustainability.

DIGITAL TRANSFORMATION OF INTERNATIONAL TRADE IN THE CONTEXT OF GLOBAL COMPETITION: TECHNOLOGICAL INNOVATIONS AND INVESTMENT PRIORITIES

In today's world, globalization and digital technologies are significantly transforming the landscape of international trade. Digital transformation has become a critical aspect that determines the competitiveness of countries and businesses in the international arena. The study aims to identify the impact of the digitalization of international trade on the economic development of countries and their competitiveness based on technological innovations that determine the future of global competition at the country and company levels, affect trade processes, and identify and justify investment priorities to support digital transformation in Ukraine.The study analyzes the impact of the digitalization of international trade on the economic development of countries, which is caused by the digital divide between developed and least developed countries (LDCs). Developed countries are characterized by Internet coverage and access of more than 90%, as opposed to LDCs, where the corresponding figure is less than 20%. Given the current conditions of access to the Internet, the countries of the latter group are not able to be fully involved in e-commerce and cross-border trade in digital products. An additional barrier to developing digital commerce in certain regions of the world is the need for more legislation on various e-commerce trade issues.The impact of the war in Ukraine on the e-commerce market is determined: the e-commerce market declined 12 times in 2022 compared to the pre-war period and began to recover gradually in 2023. The market is expected to recover almost fully in Ukraine by the end of 2023 or early 2024. The main challenge for Ukraine will be to expand the scope of the existing free trade agreements to cover services, e-commerce, and investment. Ukraine should become a significant player in several global markets for services and digital products, given the availability of an updated regulatory framework on these issues. E-commerce is expected to grow rapidly after the end of the war in Ukraine.

Adapting to the Digital Revolution: The Transformative Impact of the Fourth Industrial Revolution on Debt Payment

Within the context of the global economy, this research delves into the profound impact of the Fourth Industrial Revolution (4IR) on the dynamics of debt payments. The convergence of Artificial Intelligence (AI), Internet of Things (IoT), and blockchain technology is reshaping how nations approach debt settlements. This study investigates the transformation of international lending and borrowing practices as the 4IR continues to revolutionize trade among developing countries. Employing a comprehensive analysis spanning sixteen years, this paper combines quantitative data on 4IR adoption measures and economic indicators with a qualitative examination of prior research. The investigation explores a significant correlation between the 4IR and foreign debt payments. With the convergence of 4IR technologies, countries can bolster their production competitiveness, stimulate trade volume, and attract foreign investors. Nevertheless, this study also uncovers other aspects related to the 4IR. Rapid technological advancements have exacerbated existing debt inequalities, creating disparities between technologically advanced and less-developed countries.

Exploring Economic Growth and Development Strategies in South Korea and Nepal: Evaluating Risk and Opportunities in Investment Narratives

This article explores the narratives of investment in South Korea and Nepal, examining the risks and opportunities associated with each country. The study is based on a comprehensive review of existing literature, including academic research, government reports, and news articles. The analysis reveals that while South Korea is widely considered a safe and stable investment destination, with a well-developed infrastructure, skilled workforce, and strong regulatory framework, Nepal presents a more complex and challenging investment landscape, characterized by political instability, weak governance, and inadequate infrastructure. However, the study also uncovers a range of unique investment opportunities in Nepal, particularly in the areas of renewable energy, tourism, and agriculture. The article concludes by offering insights and recommendations for investors seeking to navigate these complex and dynamic markets. The findings suggest that while South Korea is widely perceived as a relatively safe and attractive destination for investment, with a highly developed economy and supportive government policies, Nepal faces greater challenges and uncertainties, including political instability, inadequate infrastructure, and limited access to financing. The study also highlights several areas of potential opportunity for investors in both countries, including in emerging industries such as renewable energy and technology, as well as in sectors such as tourism and agriculture. The study concludes with a discussion of the implications of these findings for investors and policymakers, and suggests areas for further research and analysis.

The Narrow Channel of Quantitative Easing: Evidence from YCC Down Under

ABSTRACTWe study the recent Australian experience with yield curve control (YCC) as perhaps the best evidence of how this policy might work in other developed economies. YCC seemingly worked well in 2020, when the market expected short rates to stay at zero for a long period of time. As the global recovery and inflation gained momentum in 2021, liftoff expectations moved up, the Reserve Bank of Australia purchased most of the targeted government bond outstanding, and the target bond's yield dislocated from other financial market instruments. The evidence suggests that central bank bond purchase programs can operate more narrowly than previously considered.

The moderating effect of financial constraints on the relationship between stock price crash risk and managerial ability

PurposeThis study aims to empirically explore the influence of managerial ability on crash risk and the moderating effect of financial constraints on this interrelationship.Design/methodology/approachUsing a sample of listed corporations in the Egyptian Stock Exchange during 2018–2021, the authors test the hypotheses by using the measures and methods well established in prior literature. The authors also conduct multiple robustness analyses to ensure the validity of the empirical results.FindingsThe findings suggest that managerial ability can effectively inhibit crash risk. In addition, the authors report that financial constraints significantly dampen this relationship. Thus, financial restrictions play a striking role in hampering the managerial ability to prevent stock crashes. Furthermore, the authors document that the moderating role of severe financing constraints is more prominent during the Covid-19 pandemic period.Originality/valueThe originality of this study stems from the following considerations. First, this study enriches relevant studies on crash risk by providing evidence from one of the emerging markets in the Middle East; thereby, contrasting with those in developed economies. Second, to the best of the authors’ knowledge, this is the first study investigating the moderating impact of financing constraints on the managerial ability and crash risk nexus. Therefore, this work adds value to the extant knowledge by scrutinizing this important issue and providing novel empirical evidence.

Exploring Economic Growth and Development Strategies in South Korea and Nepal: Evaluating Risk and Opportunities in Investment Narratives

This article explores the narratives of investment in South Korea and Nepal, examining the risks and opportunities associated with each country. The study is based on a comprehensive review of existing literature, including academic research, government reports, and news articles. The analysis reveals that while South Korea is widely considered a safe and stable investment destination, with a well-developed infrastructure, skilled workforce, and strong regulatory framework, Nepal presents a more complex and challenging investment landscape, characterized by political instability, weak governance, and inadequate infrastructure. However, the study also uncovers a range of unique investment opportunities in Nepal, particularly in the areas of renewable energy, tourism, and agriculture. The article concludes by offering insights and recommendations for investors seeking to navigate these complex and dynamic markets. The findings suggest that while South Korea is widely perceived as a relatively safe and attractive destination for investment, with a highly developed economy and supportive government policies, Nepal faces greater challenges and uncertainties, including political instability, inadequate infrastructure, and limited access to financing. The study also highlights several areas of potential opportunity for investors in both countries, including in emerging industries such as renewable energy and technology, as well as in sectors such as tourism and agriculture. The study concludes with a discussion of the implications of these findings for investors and policymakers, and suggests areas for further research and analysis.

Does Education Help Local Economies Reach Economic Potential? Evidence from South Africa

It is widely understood in development circles that poverty alleviation is elusive unless local economies operate productively with limited resources and existing technology. With a high rate of poverty on the back of weak output growth at municipality level in South Africa since 1994, this background makes it necessary to establish factors that could increase the pace of economic development and help local economies produce at full capacity. Using a stochastic frontier analysis of South Africa’s 234 municipalities observed between 1995 and 2018, this paper finds postgraduate education (Masters and Doctorates) relevant in explaining the ability of these local economies to reach their full potential and the effect increases with the size of the manufacturing sector, life expectancy and trade. The stock of high school, diplomas, bachelors, and honours does not significantly contribute towards productive efficiency of these 234 municipalities reinforcing concerns of a possible structural mismatch between lower-level qualifications and the labour market demands. Consequently, moving these municipalities closer to their full potential may be achievable through ensuring that the undergraduate cohorts reach Masters, and PhD level complemented by a manufacturing-oriented structural change. Keywords: education, technical inefficiency, structural transformation, stochastic frontier model, local municipalities, South Africa