Economic Diversification Research Articles

Moving forward from escaping the poverty trap in China's greenest regions: Examining four decades of socioecological evolution to re-orient sustainable development policies

Afforestation is an important aspect of ecosystem restoration (ER) and poverty alleviation (PA) through direct and indirect social, economic, and environmental effects. However, the existing afforestation projects worldwide have mainly viewed economic benefits through the narrow lens of subsistence and livelihood, thereby underestimating both indirect PA and the associated negative effects on agricultural production when formulating long-term solutions to global poverty. This study aimed to systematically examine the ecological, agricultural, and economic effects of ecosystem restoration in southeastern China over four decades based on biophysical models and statistical records, and further proposed an upgraded strategy for sustainable PA through ER that addresses conservation objectives and resource needs. We found that ER promoted vegetation growth and enhanced carbon sequestration and soil retention. Meanwhile, industrial transformation improved the economic scale and livelihood diversity (i.e., disposable income), which alleviated poverty and improved social services and infrastructure conditions. Nevertheless, the secondary and tertiary industries gradually replaced the primary industry in terms of output, and increased animal husbandry and forestry development weakened crop planting. Planting structure adjustments further threatened the stability of the grain supply, particularly after 1999, which could potentially lead to a grain crisis. Therefore, we propose upgraded forest management and coordinated development policies to avoid a grain crisis, improve livelihood diversity, balance multidimensional benefits, and facilitate sustainable development. Study results serve as a valuable reference for policy formulation and ER measures for more inclusive, resilient, and sustainable PA.

The challenge of securing growth in times of crises: does economic complexity matter?

ABSTRACT This paper investigates the moderating role of economic complexity in mitigating the negative impact of global economic and financial crises on a country’s economic growth. Utilizing panel data from 133 countries spanning from 1998 to 2021, we employ a robust empirical methodology, considering economic growth as the dependent variable and the Economic Complexity Index (ECI) as the main moderating variable. Three dimensions of ECI, namely Trade, Technology, and Research, are meticulously analysed for their impact on economic resilience during crises. Our findings reveal a consistent negative effect of global crises on economic growth across all specifications. Significantly, economic complexity emerges as a positive moderator, implying that more complex and diversified economies experiencing less severe negative impacts. The nuanced interaction with the Human Development Index (HDI) emphasises the varying importance of economic complexity across different development levels. This study underscores the vital role of economic complexity in enhancing economic resilience during crises, offering policymakers valuable insights for fostering economic diversification, innovation, and adaptability in a dynamic global landscape.

Peran UMKM dalam Meningkatkan Kesejahteraan Perekonomian di Indonesia

This research aims to determine the role of MSMEs in improving economic prosperity in Indonesia. This research approach collects data through literature studies, which involves reading literature from various sources including books, journals and reports using qualitative and deductive approaches. The findings in this research are that micro, small and medium enterprises (MSMEs) are a very crucial sector for economic prosperity in Indonesia. This is because MSMEs play an important role in absorbing labor, increasing people's income, creating new business opportunities, increasing economic equality, and preserving local culture and wisdom. Apart from that, MSMEs also play an important role in creating jobs, increasing local economic growth, increasing innovation and creativity, stimulating local economic growth, economic diversification, as well as contributing to taxes and state revenues. This can improve economic prosperity in Indonesia. The indicators for measuring the level of welfare are income, housing and settlement, education and health.

Toward sustainable energy transition: Unveiling the synergies of democracy, energy justice, and structural adjustment on emissions in West Africa

AbstractThe transition to sustainable energy is crucial for climate change mitigation, yet achieving net‐zero emissions remains challenging. While structural adjustments away from carbon‐intensive industries can reduce emissions, such transformations must be underpinned by democratic governance and equitable clean energy access (energy justice). Disappointedly, the interplay among structural change, democracy, and energy justice in mitigating emissions has received insufficient attention. This study examines this nexus among 15 West African countries using the Driscoll–Kraay standard estimator. Our findings indicate that democracy, structural adjustment, and energy justice significantly reduce carbon emissions, while globalization, urbanization, and international trade increase it. We recommend that governments in these nations should promote economic diversification into low‐carbon industries, ensure energy justice through electrification and clean cooking initiatives, enhance transparency and public participation in environmental decision‐making, and facilitate multi‐stakeholder dialogs on sustainable practices.

A COMBINED MANAGEMENT MODEL FOR RESTRUCTURING A REPRODUCTION SYSTEM

This paper considers a management model for a reproduction system with the synchronous change of the technological matrix during its restructuring. Such models can be characterized as models with combined (direct and indirect) control links. In the case of production resource reserves, the processes of changing control parameters and transforming technological links should be simultaneous. Invariants are obtained for the relationship between the volume of inputs and outputs of a multi-sector (diversified) economy. As a result, the formalized representation of the structural management model of a reproduction system is modified, and the linear reproduction model is replaced by a nonlinear one. The results of numerical calculations using this model and the real data of a diversified economy are presented. Based on the results, the obtained model is compared with the original restructuring model of a reproduction system.

Satellite gravimetry observations on the state of groundwater level variability in the Arabian Peninsula Region and the associated socio-economic sustainability challenges

Groundwater is an important resource for the Arabian Peninsula Region. The population increase, rise in agricultural activities, and Gulf Cooperation Council (GCC) countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates) inclination towards economic diversification and tourism promotion have heightened the freshwater demand. As a result of climate change and varying weather patterns, the situation has become more complicated. Due to arid conditions, recharge is mostly less than withdrawal which consequently results in underground water level decline over time. In the research, we have used Gravity Recovery and Climate Experiment (GRACE/GRACE-FO) MASCON solutions, Global Land Data Assimilation System (GLDAS) soil moisture, and the Integrated Multi-satellite Retrievals for Global Precipitation Mission (IMERG) rainfall data to observe the Equivalent Water Thickness (EWT), and rainfall patterns in this region for the past two decades (2002–2023). The results indicate that in Saudi Arabia the water level is declining nearly at a linear rate and the linear regression model fits well with the data (R2 value, the coefficient of determination, for different cities of Saudi Arabia is ≥ 0.94). In the Al Jouf Area, the water decline is the highest at −1.69 cm/year which is 43% greater than the previous calculations. The lowest decline rate is in Sanaa (Yemen) which is −0.13 cm/year. Furthermore, all the other studied locations show a groundwater declining trend. In Saudi Arabia's Makkah, Madina, Riyadh, and Damam the reduction rate is −0.36, −0.48, −0.72, and −0.48 (cm/year) respectively. Kuwait, UAE's Dubai, and Al Ain show a similar groundwater reduction rate of −0.19 cm/year. In Oman's Masqat, the groundwater decline rate is −0.22 cm/year. Also, in the recent data, one can see the higher seasonal amplitudes that are indicative of greater fluctuations in EWT data in recent times. If water mining continues at the same pace, this important resource can become a rare commodity. Limited water supply can likely become a limiting factor for further social, agricultural, and industrial development. That's why major reviews and shifts are necessary in the current policies related to water resource management and conservation.

Pengaruh Boikot Besar-besaran Produk Amerika terhadap Peningkatan Jumlah Pengangguran di Indonesia

This research aims to analyze the impact of a large-scale boycott of United States products on the increase in unemployment in Indonesia. The boycott was driven by political tensions and controversial trade policies. Using quantitative analysis with secondary data from the Central Statistics Agency (BPS), company financial reports, and labor market surveys, the research shows a significant impact on sectors dependent on United States products and investments. Declines in sales and production in affected companies led to layoffs and higher unemployment rates. The impact was more pronounced in regions with concentrated industries related to American products. The study concludes that the boycott contributed to higher unemployment in Indonesia, with varying impacts across sectors and regions. These findings suggest important implications for policymakers in mitigating the economic effects of boycotts and highlight the need for economic diversification to reduce reliance on specific imported products.

Natural resource extraction and economic diversification in Russian regions: Application of dynamic DID

The abundance of natural resources can hinder economic diversification. Russia's heavy reliance on natural resources has not thoroughly been examined to determine whether a resource extraction boom promotes or stifles economic diversification. This study uses a dynamic DiD event approach to analyze panel data for 83 Russian regions over the 1996–2019 period. We compare regions with and without oil and gas extractions as the treatment and control groups to scrutinize the causal effect of these extractions on both trade and economic diversification. Our analysis reveals that natural gas extraction reduces trade concentration and slightly improves economic diversification, while oil extraction has an inconclusive causal effect on economic and trade diversification. Our findings have several policy implications.

Feasibility of Establishing and Re-operation of Industrial Projects in Iraq Through import-substitution strategy

The research idea originated from the significance of the industrial sector and its pivotal role in inducing structural and systemic changes at the national economic level. Given the numerous challenges the industrial sector faces in Iraq, many industrial projects have partially or entirely ceased operations. In contrast, state-owned industrial companies have become a burden on the government. Import substitution through manufacturing is considered one of the leading strategies and most vital industrial approaches that have historically catalyzed industrial growth and structural transformations in the economy. This has been evident in the development of countries that initially relied on primitive economic models centred around simple agriculture and the export of raw materials and transitioned into diversified economies with a significant industrial component, producing numerous high-quality and technologically advanced products. Based on this, the study aims to assess the compatibility of this strategy with the current Iraqi economic landscape. It seeks to shed light on inactive industrial projects and companies, exploring the feasibility of reactivating them or establishing new industrial ventures. Priority will be given to projects aligned with its objectives and goals. Additionally, the study aims to provide a forward-looking perspective on the state of the industry in Iraq's prospects, diagnose existing problems, and attempt to find solutions and remedies that can contribute to establishing a reliable industrial sector.

The Prospects of AfCFTA in Promoting Industrialization and Economic Diversification in Africa

African Continental Free Trade Area (AfCFTA) functions as a boost for Africa's economic development by enhancing intra-African trade. This is because trade is an engine of growth and development. For the fact that most African nations that are located within the same region engage in similar and competitive production, the ensuing economic cooperation and trade exchanges not only have the promise of increasing trade but also stimulating other ancillary economic activities, creating new job opportunities, speeding up economic growth, promote the standard of living, and promote economic development. However, AfCFTA's record has not been very impressive. The main obstacles to intra- regional commerce among African countries include heavy reliance on trade in primary goods, high product and market concentration of exports, and inadequate regional manufacturing networks. This study therefore examines continental economic trends and Intra African Trade: Prospects for African Continental Free Trade Area. The study adopted qualitative methods of data collection and analysis and the comparative theory of integration. The study found that the low level of trade diversification implicated the capacity of the African Continental Free Trade Area (AfCFTA) to achieve improved intra-regional trade performances in Africa. African countries maintain as much as 77% export specialization, with higher external/world trade at 84.6 percent of their total import and export trade. The study recommended that Governments should invest in infrastructure development, including building roads, railways, ports, and airports, as well as improving access to electricity and broadband. Governments should adopt modern trade facilitation measures such as electronic customs systems, single window platforms, and risk management techniques and should align their technical regulations and norms with global best practices and standards, as those created by appropriate international standard-setting organisations like the International Organisation for Standardisation (ISO).

The Impact of Public Expenditure on Inflation: An ARDL Approach

The aim of this study is to investigate and evaluate the impact of public spending on inflation in Algeria from 1973 to 2022. The data used are obtained from the official website of world Bank (WDI) and the Finance Ministry of Algeria. This study is conducted by applying the Auto-Regressive Distributed Lag model (ARDL)-(bounds testing approach) using eviews13 software. The time series of the data were subjected to statistical tests by applying the Augmented Dickey-Fuller (ADF) test. The cointegration tests were also applied for a common relationship and the Model Stability: The Bounds Test for confirming the existence of a stable long-term relationship, the Breusch-Godfrey serial correlation LM test to test the absence of serial correlation, Test Breusch-Pagan-Godfrey to test the Heteroskedasticity; and the CUSUM and CUSUM Squares test for the stability of the model as well as the estimation of the model’s short- and long-term parameters. The results obtained confirm the hypothesis posed in the introduction on the existence of a cointegration relationship between public expenditure and inflation the indicate that there exists a cointegration relationship between public expenditure and inflation, such that a 1% increase in public spending leads to a 0.23% rise in the inflation rate. It is important to mention that this percentage is relatively low compared to the short term, having reached 2%. As regards the other control variables, we found a positive and statistically significant correlation between the inflation rate and the percentage of broad money to GDP and the percentage of imports to GDP. However, we found an inverse relationship between the inflation rate and GDP per capita at constant 2015 prices, which serves as a measure of inverse economic growth. Based on these results, we can suggest Moving forward, policymakers in Algeria must prioritize measures aimed at curbing inflation while ensuring sustainable economic growth. This may involve reassessing public spending priorities, implementing effective monetary policies, and enhancing fiscal discipline. Furthermore, fostering economic diversification and promoting investment in sectors with high growth potential can contribute to reducing reliance on public expenditure as a driver of inflation.

Unlocking organizational success in the hotel industry: the power of social exchange in HR practices

Purpose The purpose of this study is to examine the role of specific human resources (HR) practices (leadership, employee relations, employee safety, rewards and incentives and career opportunities) on organizational performance in the context of the Middle Eastern market, with a specific focus on the United Arab Emirates (UAE) hotel sector. Design/methodology/approach A comprehensive research methodology was used for this study. Two distinct questionnaires were crafted: one targeting 338 hotel employees who completed the HR practices survey, and the other for 109 general hotel managers who completed the organizational performance survey. All respondents were from five-star hotel establishments in the UAE. To validate the hypotheses, a multidimensional approach was adopted. This paper first applied factor analysis to understand correlations and groupings among the factors. This paper then undertook validity assessment by examining factor loadings, average variance extracted and the reliability values for all parameters. Discriminant validity was also carefully evaluated. Findings The results found that there is a direct correlation between leadership, employee relations and career opportunities, with boosted organizational performance. Contrary to prevalent assumptions, the data showed no discernible link between employee safety, rewards and incentives and the actual performance of organizations. The results highlight the crucial role of social exchange in interpreting the indirect relationship between HR practices and organizational performance. This insight offers a fresh perspective on the often-discussed 'black box' in HR research. Originality/value The novelty of this study lies in its intricate exploration of human resource management practices within a region experiencing swift socioeconomic transformations due to factors such as the significant expatriate presence and economic diversification. By underlining the significance of social exchange as a mediating factor, this research significantly contributes to the ongoing dialogue on HR-performance relationships, offering insights for both theoretical and practical applications in HR activities formulation in the context of the UAE.

The Effectiveness of Development Performance in Gorontalo Province Over Two Cycles of RPJMD (2012-2022)

This research aims to: 1) analyze the effectiveness of development performance achievements in Gorontalo Province over two cycles: RPJMD in 2012-2017 and RPJMD in 2017-2022; and 2) formulate recommendations for the effective achievement of development targets. The method employed was a survey utilizing secondary data in the form of time series with documentation data collection instruments. The effectiveness of development achievements was analyzed using descriptive statistics, and data were presented in tables, figures, and graphs. The effectiveness of development achievements was examined based on the trend of main development indicators in the two RPJMD cycles of Gorontalo Province from 2012-2017 and 2017-2022 and compared with the set targets. The research findings indicate that the development performance of Gorontalo Province during the period 2012-2022 reflects diverse dynamics. Economic growth experienced fluctuations with an initial surge in 2012 and the negative impact of the COVID-19 pandemic in 2020. The Human Development Index showed improvement, indicating efforts to enhance social conditions and the population's welfare, although it remains within the moderate category. The agricultural sector changed with increased maize production due to the Agropolitan program, but further efforts are needed to improve farmers' income and rural economic diversification. Surveys on community satisfaction revealed improvements in the quality of public services and governance and accountability enhancements. Despite positive achievements, Gorontalo Province still faces challenges in achieving better and sustainable performance in improving community welfare.

Strategy research in an African context: A systematic literature review

ABSTRACT This article presents a systematic review of strategy research in Africa. The quantity of management research in general and strategy research in particular is growing on the continent, though from a low level. It is, however, characterized by a strong focus on South Africa and Ghana, hence not reflecting the cultural and economic diversity of the continent in detail. This review consists of 161 articles. The review found that research on strategy-performance relationship dominates the field. The cultural context and how it may influence strategy and strategy-making is still not well addressed. The article ends by suggesting future research directions based on the identified gaps.

Economic Diversification in Developing Countries

Economic Diversification in Developing Countries

Does the Manufacturing Industry Reduce Poverty on Sumatra Island?

Poverty alleviation is an important priority for governments. Encouraging manufacturing growth is often seen as an effective strategy to alleviate poverty. However, the impact of such growth on poverty rates in Sumatra Island remains unclear. This study analyze the impact of manufacturing growth on poverty rates in 10 provinces in Sumatra Island, using secondary data from 2008 to 2022. Using the quantitative approach and panel data regression analysis, the results show that industrial growth in Sumatra Island, although not significant, has an impact on poverty reduction. However, industrial growth can indirectly absorb labor. Labor and education variables have a negative and significant effect on poverty. These findings highlight the need for policy interventions focusing on vocational education and training, infrastructure improvement, economic diversification, labor policies, and local community empowerment to effectively reduce poverty.

Unlocking Inclusive Growth and Sustainable Development in Nigeria: A Roadmap Through Challenges and Opportunities

Purpose: This paper aimed to explore the concept of inclusive growth within Nigeria's socio-economic framework, particularly in light of the Nigeria Agenda 2050 (NA2050), a strategic policy initiative. It seeks to understand Nigeria's multifaceted challenges and opportunities in achieving inclusive growth. Design/Methodology/Approach: The study reviewed secondary data sources including, reports from various agencies and institutions, and government data. It utilised thematic analysis to dissect and present insights into Nigeria's developmental trajectory as outlined by NA2050. Findings: Despite significant economic strides, Nigeria struggles with socio-economic disparities, marked by high unemployment, rising inflation, and infrastructural deficits. The NA2050 is a crucial framework advocating for robust governance, macroeconomic stability, economic diversification, and human capital development to overcome these challenges. Practical Implications: The study highlighted the essential roles of technological advancement and financial inclusion as key drivers of sustainable development and economic resilience in Nigeria. It calls for a multi-stakeholder approach to implement NA2050's strategies effectively, enhancing transparency in the oil sector, prioritising human capital development, and fostering private sector-led growth. Social Implications: This research emphasised the need for inclusive growth that benefits all societal layers in Nigeria, addressing the persistent socio-economic gaps that hinder equitable development and social cohesion. Originality and Value: The paper contributes to the discourse on inclusive growth by providing a pragmatic roadmap for Nigeria’s socio-economic revitalisation, offering a detailed analysis of the strategies embedded in the NA2050 and their potential impact on the nation's future.

Distribution of Projects Financed by Means of the National Rural Development Programs in Cluj-Napoca Metropolitan Area

Distribution of Projects Financed by Means of the National Rural Development Programs in Cluj-Napoca Metropolitan Area. The measures and sub-measures included in the National Rural Development Programs of 2007-2013 and 2014-2020 have also been accessed by the 19 communes of the Cluj-Napoca Metropolitan Area. The present paper focuses on the most significant measures and sub-measures of these programs, in relation to their main purpose (supporting the modernization of agriculture, encouraging the diversification of the rural economy and improving the standard and quality of life in rural areas) and the distribution of contracted projects (and submitted projects - where the case) in this area, an area developing under the socio-economic influence of the nearby city. While for some communes the influence of the city is quite visible, some other communes still preserve accentuated rural features, and these different trajectories are also mirrored in the types of submitted or contracted projects from such communes, in the context of these development programs. Keywords: rural development, Cluj-Napoca, metropolitan area, projects, National Rural Development Program.

DOES THE LEGAL FRAMEWORK GOVERNING EMERGING INSTITUTIONS IN ALGERIA DIFFER FROM THAT OF TRADITIONAL PROJECTS?

Emerging institutions have garnered significant worldwide attention due to their unique characteristics and pivotal roles in fostering economic development. These institutions represent innovative economic models that have gained prominence in numerous countries, aiming to nurture emerging ventures and empower innovators. Like many nations, Algeria has adopted an alternative economic approach to achieve sustainable development and elevate the national economy. This approach prioritizes fostering creativity and innovation, enabling economic diversification, and encouraging the establishing of emerging institutions. Algeria aims to drive the desired development and investment momentum by expanding business opportunities within a sound economic environment. This strategy is a viable alternative to wealth creation and economic expansion beyond the hydrocarbon sector and traditional economic rents. Hence, Algeria issued an arsenal of legal texts to encourage these institutions and open the door for those with innovative ideas to implement their ideas on the ground. Therefore, supporting emerging enterprises has become a priority for Algerian economic decision-makers to contribute to advancing development and enhancing local production.

Effect of agriculture on economic growth in Algeria during the period 1991–2022

Purpose. This paper aimed to study the impact of both agricultural value-added and agricultural labour on the economic growth of Algeria (represented by the real Gross Domestic Product – GDP) during the period 1991–2022, using the co-integration method according to the bounds approach known as the Autoregressive Distributed Lag modeling (ARDL). Results. The study revealed a relationship between real agricultural value-added and real GDP in both the short and long terms. However, the impact ratio in the long term is somewhat weak, reflecting the weakness of agricultural production in contributing to total output formation and economic growth. Additionally, agricultural employment only affects real GDP in the long term. The error correction coefficient is negative and significant, with the speed of adjustment towards equilibrium in the long-term reaching approximately 52.19 % (about one year and 10 months). Scientific novelty. This study highlights the great importance of the agricultural sector as one of the solutions to economic diversification in order to achieve economic development in Algeria – a country that has suffered and continues to suffer from economic dependence on the hydrocarbon industry. However, this study stands out from previous research by addressing various programs and reforms implemented in the agricultural sector during the study period. Moreover, it measures the impact of the agricultural sector on economic growth by creating a logarithmic model with two main variables: agricultural value-added and agricultural employment, both of which effectively contribute to increasing agricultural production and thus economic growth. Practical value. This study emphasises the need for the government to prioritise and improve agriculture to move towards smart agriculture and reclaim wastelands. At the same time, the government must allocate new programmes to develop the agricultural sector and activate workers to increase agricultural productivity in order to achieve food security and transform the country towards a more prosperous and sustainable future.