Econometric Findings Research Articles

The influential impacts of international dynamic spillovers in forming investor preferences: a quantile-VAR and GDCC-GARCH perspective

ABSTRACT This study investigates whether representative sectoral stock indices, gold, oil, Bitcoin, and wheat can mitigate risk and improve portfolio performance during normal times versus crises. The cutting-edge Quantile Vector Autoregressive model and the Generalized Dynamic Conditional Correlations (Generalized-DCC) framework are adopted covering from 9 January 2017 until 30 August 2022. Econometric findings by the Q-VAR reveal that oil presents the strongest connection with commodities and stock indices and that Bitcoin and wheat despite their significant linkages with financial markets fail to act as safe havens. Moreover, GDCC-GARCH indicates that the returns of sectoral indices are weakly related but display powerful volatility co-movements. Gold serves efficiently as a hedger and oil follows and both act as better shelters during crises. Nevertheless, Bitcoin partly abides by conventional markets in stressed periods. Notably, wheat reliably works as a hedger overall but does not become a safe haven during crises.

Association between foreign agricultural investments and adoption of soil and water conservation practices in Uganda

ObjectivesRecently, some developing countries are promoting foreign agricultural investments in Agriculture to exploit currently under-exploited land. Yet, the benefits to recipient countries remains less understood and inconclusive. The study sought to understand the association between proximity to a foreign agricultural investments (FAI) and adoption of soil and water conservation farming methods by smallholder farmers in Uganda.MethodologyWe used cross-sectional data collected from a total of 1,181 smallholder respondents, sampled through a multi-stage random sampling process resulting in three independent samples from South-western, Central and Northern Uganda. Using logistic regression analysis and pooled data, we study the association between proximity to a FAI and other factors that influence the adoption of soil and water conservation farming practices by smallholder farmers in Uganda.ResultsDescriptive results show that at the aggregate level proximity to a FAI, the education level of the farmer and ownership of information and communication assets (radio and mobile phone) are significantly different between adopter and non-adopters of soil and water conservation farming methods in the research area. The econometric findings of the study suggest that proximity to a foreign agricultural investments (FAI) has weak but significant spillovers on soil and water conservation farming practices of smallholder farmers it their vicinity with possible site specific variations that warrant more in-depth investigation. The effect of proximity to FAI on the adoption of soil and water conservation farming practices is complemented by the education level of the farmer and access to means of communication (radio, and in particular mobile phone set) indicating the importance of information and also broader socio-economic conditions.RecommendationWe recommend policies that enhance increased exposure of smallholder farmers to FAI especially those that help promote rural digital penetration through increased band width, FM radios and affordable data packages.

The Paradox of Positivity: How Overly Positive Responses by Hosts Can Backfire on Peer-to-Peer Rental Platforms

Effective strategies for managerial responses to guest reviews on peer-to-peer rental platforms remain undefined. This study utilizes symbolic interaction theory to explain the effect of hosts’ response positivity on guests’ review-posting intention. The study employs a mixed-methods approach, combining econometric modeling with experiment, to empirically examine the effects of response positivity and the underlying mechanism. The econometric findings indicate a “positivity paradox” in that overly positive responses reduce review-posting intention. This reduction is more pronounced for hosts who have made fewer responses to reviews and those without “Superhost” status. The results of the experiment reveal that this effect is largely driven by guests’ perceptions of the hosts’ authenticity, with overly positive responses often being interpreted as inauthentic. Our findings provide both theoretical and practical implications for stakeholders on peer-to-peer rental platforms. (Also available in Chinese)

Supporting investment on long-term funding to maximize the effect of efficient use of natural resources

Global sustainable development is increasingly contingent on underpinning investment to multiply the number of practical uses of natural resources to enhance the impact on funding stability over the long term. This study investigates this imperative for the 1993–2018 time period through the CS-ARDL model in the case of China. The study reveals a statistically significant correlation between enhanced resource efficiency and a positive trajectory in long-term funding, underscoring the importance of strategic investments to maximize the beneficial effects on financial sustainability. Furthermore, the econometric findings demonstrate that variations in investment patterns significantly contribute to fluctuations in the efficiency of natural resource utilization, thereby influencing the long-term funding outcomes observed. This study's findings suggest that policy initiatives should prioritize strategic investments in natural resource efficiency, serving as a pivotal approach to bolster long-term funding sustainability and facilitate resilient economic development in China.

Towards an encompassing concept of remittance in the digital era: Assessing the role of formal banking and mobile money accounting in its spatial flow

Drawing from capital mobility theory, this article adopts an encompassing view on remittance that covers both domestic and international financial transfers, to retrospectively explore and evaluate the relative influences of formal banking (FB) and mobile money accounting (MMA) on the extensive supply of remittances from individuals living within the economic community of the West African states (ECOWAS), during the COVID-19 pandemic. To that end, the study uses random utility maximization to model ECOWAS level data extracted from the 2021 Global Findex Survey. The results show that FB and MMA had respectively 12.2% and 54.5% positive impacts on the marginal utilities (MUs) individuals derive from supplying remittances. The comparative evaluation of the two remittance channels suggested that FB and MMA were neither substitutes, nor complements into the individual’s extensive supply function of remittances within ECOWAS. However, MMA was found to be 4.47 times more effective than FB, at driving outbound remittance behavior. Additionally, the findings revealed a significant income gradient in outbound remittance behavior; as well as highlighting a 22.4% gender based gradient in remittance sending in favor of females; and a 6.4% regional gradient favoring urban residents. Moreover, the econometric findings suggested that expending financial inclusion through easing access to key financial products and services; as well as government welfare programs, and employment income, significantly increased the likelihood of remittance sending within the ECOWAS bloc. Hence, important implications for endogenous regional growth and future research are discussed.

Exceptional and long-time economic development: CO2 emission reduction and adoption of green marketing in China.

This study aims to boost green bond China's adoption of green marketing; the current research focuses on green defaults as demand-side strategies. This paper panel data collected from 2002 to 2021 used econometric methods. Purposive sampling was used to collect information from respondents. The empirical findings show that the link between income and Green Business Initiatives (GBI) increases emissions of carbon dioxide. Moreover, trade openness raises carbon dioxide emission, but human capital reduces them. This article also makes some predictions about how monetary policies will affect the economy. A policy of open market operations in which the government discounts less for second-hand debt, lowering the market value of money, credit, and interest rates. Results (2) show that the descriptive statistics for the dependent and independent variables of the global market's first-layer model. Green bonds are priced 0.12% more in ask yield than its conventional counterparts on average. The 0.09% point mean of GBI demonstrates that the bid-ask yields of green bonds are somewhat lower on average than those of conventional bonds. The econometric findings of robustness checks reveal that GDP volatility is low and growth rates are higher in economies with GB marketing. Excellent and long-term financial development, as well as strong gross fixed capital formation, are hallmarks China region, which indicate higher levels of economic investment than their control counterparts.

Determinants of Factors Affecting the Financial Performance of Indian General Insurance Firm: Panel Data Evidence

The researchers aim to examine the firm-specific variables that impact the financial performance of general insurance firms in India. The study’s scope is limited to India’s insurance industries from 2010-2011 to 2019-2020. The research considers 21 insurance firms in India out of 35 general insurers. We obtain statistical data from the financial statements of insurance companies. The research used correlation analysis and panel data regression to evaluate financial performance and its impacts. Panel data techniques were employed in the analysis to study the impact of eleven micro factors on the monetary performance of general insurers in India. The influence of micro (internal) variables such as capital adequacy ratio, firm size, age of the firm, retention, liquidity, loss ratio, investment ratio, reinsurance dependence, financial leverage, tangibility, and premium growth rate on the financial performance has been determined using econometric findings in this research. The fixed-effect model results reveal that firm’s age, loss ratio, size, premium growth, and retention ratio are vital in affecting the financial performance of Indian general insurance firms. On the other hand, liquidity and financial leverage are insignificant in determining the financial performance of general insurance firms in India.

Environmental consequences of ISO 14001 in European economies amidst structural change and technology innovation: Insights from green governance dynamism

In this last decade, the green growth paradigm has attracted a lot of attention. In addition to protecting the environment and people, green growth also instigates other stringent responsibilities on organizations and governments. Thus, to maintain and protect the environment, organizations must provide support for complex environmental concerns under a governance-enabling regulatory framework. Voluntary environmental initiatives have shown to be an effective strategy for reducing pollution. Through a variety of means, including modifications to procedures, adjustments to raw materials, redesign of products and packaging, and innovations in pollution control technology, these voluntary projects seek to reduce pollution. In order to access this channel within the European countries, we investigate how environmental safeguards are affected by ISO 14001, Structural change, technological innovation, and green Governance. We also took cognizant of spatial inference of environmental pollution using spatial econometric models. According to our econometric findings, (i) obtaining ISO 14001 certification leads to a sizable decrease in carbon emissions in European nations. (ii) The findings indicate spatial agglomeration, and neighbouring nations' pollution patterns are comparable. Because of the physical agglomeration between nations, nations must work together to combat air pollution and ensure progressive, sustainable development.

The divestment-reinvestment sequence in foreign countries: The role of relational vs. transactional ownership

In this paper, we claim that ownership is a key determinant of the firms' divestment-reinvestment sequence in a foreign country. Building on the notion of ‘relational vs. transactional ownership’, we distinguish between relational-type firms (namely, family-owned and state-owned firms), and transactional-type firms (privately non-family-owned firms). We argue that relational-type firms are less likely to both divest from, and reinvest in, a given foreign country. In fact, relational owners set a lower performance threshold of intervention than transactional ones; additionally, in order to turn the tide, the former often increase resource injection when subsidiary performance falls below the threshold. Such an escalation of commitment increases sunk costs and further decreases the likelihood of divesting the subsidiary. Moreover, when a divestment occurs, the memory of high sunk costs incurred reduces the propensity to reinvest in the same host country. We test our conceptual framework on a large sample of investments, divestments and subsequent re-entries undertaken in the period 2000–2015 by 602 Italian firms. Our econometric findings corroborate our hypotheses, thus contributing to the literature on the interdependencies between divestment and reinvestment choices, and their relationships with corporate ownership.

Effects of co-patenting across national boundaries on patent quality. An exploration in pharmaceuticals

ABSTRACT This paper explores three novel research questions. First, is an increase in the number of countries involved in ownership of a co-patent an effective way to enhance patent quality? Second, if the objective is to raise patent quality, which are the right countries to collaborate with? And third, does cooperation with partners located in a tax haven affect patent quality? The empirical methodology relies on forward citations as an indicator of quality, and patent co-ownership as a measure of international collaboration. Our econometric findings show that, first, the average effect of international collaboration is a 4.9% increase in patent quality compared with those patents for which the assignees come from a single country (once we controlled for patent characteristics). When the number of countries in which the assignees are based increases, the effect of this wider collaboration on patent quality is also greater, though only for up to a maximum of five countries. Second, to produce patents of better quality, the most suitable countries with which to collaborate were found to be the United States, Switzerland, Japan, Germany and the United Kingdom. Finally, collaboration with firms located in a country categorized as a tax haven does not have any significant impact on patent quality.

The Impact of Perceived Organizational Support Program on Employee Performance in the Presence of Job Satisfaction

The present study investigated the mediating role of job satisfaction influencing the impact of perceived organizational support (POS) on employee performance among 215 employees working in different organizations in Hattar Industrial Estate Pakistan. The data was collected through a well-designed questionnaire, which was adopted after a brief literature review. The study relied on different statistical tests such as frequency distribution, descriptive statistics, Pearson’s correlation, step-wise regression, and structural equation modeling. Results showed higher internal consistency among the scales used in the questionnaire representing different factors. The econometric findings revealed that POS along with control variables i.e. age, gender, education, income, and total experience is responsible for around 41.6% variation in employee performance increased to 68.9% with the inclusion of job satisfaction. The SEM results showed that job satisfaction positively mediates the relationship between POS and employee performance, where the coefficient value of the indirect effect is recorded statistically significant at 5%. The findings of the current study implied that for organizations it is not enough to promote POS culture to increase employee performance rather it is important to encourage and care about employee satisfaction first and then encourage POS-related policies.

Allies or rivals? Spatial price competition in the Chinese retail gasoline market of inner Mongolia

ABSTRACT This study examines the pricing behaviour in the gasoline market using station-level pricing data from Inner Mongolia, China. The spatial econometric findings confirm that: (1) there is a significant spatial dependence among gas stations; (2) the two state-owned oil giants, PetroChina and Sinopec, receive a positive pricing effect from their brands compared with other stations; (3) there is no significant evidence of price competition among PetroChina stations, and some evidence of competition among Sinopec stations, and more intense competition among other stations; and (4) ‘stand-alone’ (no stations nearby) stations have a price premium, but the premium is limited by the price regulation. Our results show the heterogeneity in pricing behaviour between stations, implying the need for differentiated policies to ensure orderly competition in the retail gasoline market.

Evaluation of post COVID-19 energy poverty and global trading impact on energy affordability

Energy poverty become a serious global problem after COVID-19 among the developing and developed countries that must have to be addressed to meet United Nations Sustainable Development Goals (SDGs). Moreover, the factors contributes to energy poverty have given little attention. The study aims to overlooked on the energy affordability and accessibility among the Europeans living in Energy poverty. Therefore, study mainly concerning on the effecting factors such as bilateral commerce, globalization, and the quality of bureaucracy that possibly affect energy poverty. The influence of bilateral commerce on energy poverty was investigated using many robust panel data approaches, including cross-sectional autoregressive distributed lag (CS-ARDL), common correlated effects generalized method of moments (CCE-GMM), and instrumental variable regression. Annual data utilizes from European nations (from 2000 to 2019). According to the econometric findings, bilateral commerce enhances energy accessibility while raising energy prices. Economic globalization was meant to raise energy costs and restrict fuel access for Europe’s poorest citizens. Study suggested that bilateral trade should be assessed to ensure energy demand and supply conditions meet to keep the energy pricing in the afforadbale range especially among the low income families in the Europen countries. Across models, these results are consistent, allowing us to propose fresh energy accessibility and affordability conclusions in line with the SDGs.

Nexus between Government spending’s and Green Economic performance: Role of green finance and structure effect

In response to the dual problems of global climate change and the economic crisis, the concept of the green economy has spread beyond environmental economics and into mainstream politics and business. The green Belt and Road Initiative (BRI) is a critical component of achieving a green transition in the regional economy, as well as a key component of the United Nations 2030 Agenda for Sustainable Development. We used data envelopment analysis and system GMM techniques to measure the association between Government expenditure and the green economic performance. This method uses panel data from 2008 to 2018 in selected BRI countries. The results show that the fluctuations in the green economic performance index of BRI countries are caused by the lack of serious government policies. Moreover, the econometric findings shows that government expenditure have positive significant effect on green economic performance. Furthermore, the analysis demonstrates that public expenditure on human capital and renewable energy leads to a productive green economy through labor, and technically advance developmental practices, with varying consequences in distinctive countries. This research also includes policy recommendations for BRI countries. • Role of technological innovation for promoting the green economic performance. • Sustainable green economic development with emission reduction. • Assessment of government spending’s on green economic performance.

Investigating the relationship between financial inclusion and financial health in South Africa

Orientation: Financial inclusion (FI) and financial health (FH) are important for the country’s economic development, particularly upliftment of people from the lowerend of income distribution.Research purpose: The study investigated the relationship between FI and FH in South Africa using FinScope data for 2011 and 2016.Motivation for the study: Whilst there has been an emergence of South African studies on FI, there is a lack of research on FH and its relationship with FI.Research approach/design and method: FI index and FH index were derived. The study estimates three regressions, the first in which FI is a dependent variable regressed on determinants, the second in which FH is the dependent variable regressed on FI and other determinants, and the third is a bivariate probit regression in which FI and FH are modelled co-jointly.Main Findings: The proportion of people who were both financially included and enjoyed good FH increased from 45% to 57%. These people were middle-aged white men employed with post-secondary education. The econometric findings also suggested a significantly positive correlation between FI and FH.Practical/managerial implications: These findings provide valuable information on the design of FI and FH initiatives that specifically focus on the needs of the under-privileged and assist in understanding and making informed decisions on the implementation and provision of appropriate FI and FH measures to targeted individuals.Contribution/value-addition: This is the first South African study that examined both FI and FH with FinScope data.

Food security in South Asia under climate change and economic policies

PurposeThe first purpose of this study is to examine the impacts of climate-caused cereal productivity changes on food security, welfare and GDP in South Asian countries. The second purpose is to assess the agricultural subsidies and South Asia Free Trade Agreement (SAFTA) as policy responses to climate change.Design/methodology/approachThe present study uses the computable general equilibrium (CGE) framework and econometric approach in an integrated manner to examine the economic impacts of climate-caused cereal productivity changes in South Asian countries. An econometric model is used to identify the impact of climate change on cereal yields and CGE approach is used to assess the future effect of climate change through simulations. In this course, the econometric findings are applied to Multiregional Global Trade Analysis Project 10 and then the model is calibrated for future projection.FindingsThe results indicate that there is a decrease in cereals production because of climate change and eventually it increases the prices of cereals, decreases the local consumption and GDP and, as a result, causes a loss in welfare. Subsidies and SAFTA have been found to have no substantial impact on increasing food security in South Asia.Originality/valueThe present study uses the concept of food demand for all cereals in an integrated way and focuses on the fiscal and trade policy responses to climate change.

Impacts of bilateral trade on energy affordability and accessibility across Europe: Does economic globalization reduce energy poverty?

Energy poverty is a major issue in both developing and developed countries, and its mitigation is a key aspect of the United Nations’ Sustainable Development Goals (SDGs). However, the determinants of energy poverty are relatively less explored. The current research adds to the scholarly literature on energy affordability and accessibility for the lowest 20% poor European population. This is one of the first studies to examine the impact of bilateral trade, globalization, and bureaucratic quality on energy poverty. A variety of robust panel data techniques were used to investigate the role of bilateral trade for energy poverty, which includes cross-sectional autoregressive distributed lag (CS-ARDL), common correlated effects generalized method of moments (CCE-GMM), and instrumental variable regression. This study employs annual data (from 2000 to 2019) from 27 European countries. The econometric findings revealed that bilateral trade increases energy accessibility and causes energy prices to upsurge. Economic globalization was determined to increase energy expenses and reduce access to fuel for the poorest people in Europe. In the future, bilateral trade should be reviewed to ensure the following criteria. All European countries receive maximum benefit from it; low-income countries should be supported; and environmental harm should be minimized. These empirical findings are robust across model settings, enabling us to suggest novel conclusions on energy accessibility and affordability in accordance with the SDGs.

Centralization versus decentralization of traffic law enforcement governance in Spain

ABSTRACT The current paper deals with the debate over centralization versus decentralization in road safety management, and specifically in traffic law enforcement. We address the case study of Spain, where a single traffic law acquis is enforced by two systems: road policing decentralized for some regions and national road policing for all others. Our econometric findings reveal that the Spanish regions with centralized traffic policing present better safety figures, which might be useful for reinforcing the coordinated performance of road safety policy in other traditionally decentralized countries. Furthermore, our evidence indicates that cautious analyses have to be carried out on a case-by-case basis.

Innovativeness, Work Flexibility, and Place Characteristics: A Spatial Econometric and Machine Learning Approach

This paper seeks to study work-related and geographical conditions under which innovativeness is stimulated through the analysis of individual and regional data dating from just prior to the smartphone age. As a result, by using the ISSP 2005 Work Orientations Survey, we are able to examine the role of work flexibility, among other work-related conditions, in a relatively more traditional context that mostly excludes modern, smartphone-driven, remote-working practices. Our study confirms that individual freedom in the work place, flexible work hours, job security, living in suburban areas, low stress, private business activity, and the ability to take free time off work are important drivers of innovation. In particular, through a spatial econometric model, we identified an optimum level for weekly work time of about 36 h, which is supported by our findings from tree-based ensemble models. The originality of the present study is particularly due to its examination of innovative output rather than general productivity through the integration of person-level data on individual work conditions, in addition to its novel methodological approach which combines machine learning and spatial econometric findings.

The role of public policy in debt level choices among small-scale manufacturing enterprises in Ethiopia: conditional mixed process approach

This paper explores the determinants of debt financing choices among small-scale manufacturing enterprises in Ethiopia—with special focus on the role of government policies. The study exploits survey data gathered from 1321 enterprises in the Amhara region of Ethiopia and employs conditional mixed process (CMP) system estimation technique to test the effect of public policy on firm debt levels. The relevant econometric findings confirm that policy activism through the provision of training and related intervention schemes boosts debt utilization in startup finance mix while it lowers the probability of firms' falling into higher debt levels over time. The results also show that enterprises that had some debt mix in their startup capital are more likely to be in higher debt categories than those enterprises that kick start exclusively with their own internal resources. In addition, the findings also reveal that self-reported profitability, firm age, and ownership structure have strong effects on the degree of firms’ indebtedness. One major bottleneck to the survival and growth of SMEs is their relatively large default rates. One strand of the existing literature shows that firm default rates are strongly correlated with debt levels. As default rates driven by high debt levels have devastating implications for creditors, debtors, and regulators, it is very important to understand the determinants of debt levels. This study is the first to apply conditional mixed process system estimation on firm level data from Ethiopia to test the effects of government policies on debt level choices.