Governance Indicators Research Articles

The Relationship Between Interest Rates, Financial Ratios, and Bond Ratings with Profitability as a Mediating Variables in Non-Financial Sector Companies in Indonesia

Abstract During the latest decades, regional creativity has often been considThis study seeks to investigate the relationship between interest rates, liquidity, and leverage to non-financial companies in Indonesia who have issued bond securities between 2018 and 2023 with profitability as an intervening variable. Panel data regression analysis and path analysis are used in the study to explore the connections between the variables, both directly and indirectly. According to the results, bond ratings are heavily affected by interest rates, but liquidity does not appear to play a major role. Moreover, leverage appears to have a positive effect on bond ratings. Moreover, profitability is significantly influenced by interest rates, while leverage has a detrimental effect on profitability. The study suggests that there is a slight influence of profitability on the connection between interest rates and bond ratings, but not for liquidity or leverage. Interest rates are found to have a significant positive effect on bond ratings, whereas liquidity and leverage have minor direct impacts. These findings contribute to investors in making bond investment decisions, as well as for companies in optimizing their capital structure to improve bond ratings. This study suggests further development by expanding the coverage of other industry sectors and adding variables such as corporate governance and macroeconomic indicators to increase external and internal validity.

Practices of Good Governance in Budhanilkantha Municipality: Local Government Initiatives

This article explores good governance practices and public service delivery by elected representatives and administrative staff in Budhanilkantha Municipality, Nepal. It examines local government initiatives and emphasizes key principles of good governance such as accountability, transparency, justice, and participation. This study employs a mixed-methods approach, incorporating surveys and interviews, to assess key governance indicators, including transparency, accountability, public participation, and service delivery. Likewise, a stratified sampling method was used to select 120 respondents from all wards of Budhanilkantha Municipality. The findings provide a comprehensive overview of governance practices in the Municipality, highlighting strengths and improvement areas. While awareness of governance principles is generally high, challenges such as limited public participation, delayed public service delivery, and varying levels of transparency persist. The research underscores the importance of citizen engagement and the proactive implementation of good governance mechanisms to foster trust, enhance service delivery, and support sustainable local development. The insights derived from this case study offer valuable guidance for policymakers, practitioners, and community stakeholders seeking to strengthen governance frameworks at the local level.

Evolution of flood protection levels and flood vulnerability in Europe since 1950 estimated with vine-copula models

AbstractThe magnitude of flood impacts is regulated not only by hydrometeorological hazard and exposure, but also flood protection levels (primarily from structural flood defenses) and vulnerability (relative loss at given intensity of hazard). Here, we infer the variation of protection levels and vulnerability from data on historical riverine, coastal, and compound floods and associated impacts obtained from the HANZE database, in 42 European countries over the period 1950–2020. We contrast actual damaging floods, which imply flood protection was locally inadequate, with modelled potential floods, i.e. events that were hydrologically extreme but did not lead to significant impacts, which imply that flood protection was sufficient to prevent losses. Further, we compare the reported magnitude of impacts (fatalities, population affected, and economic losses) with potential impacts computed with depth-damage functions. We finally derive the spatial and temporal drivers of both flood protection and vulnerability through a multivariate statistical analysis. We apply vine-copulas to derive the best predictors out of a set of candidate variables, including hydrological parameters of floods, exposure to floods, socioeconomic development, and governance indicators. Our results show that riverine flood protection levels are much lower than assumed in previous pan-European studies. North-western Europe is shown to have better riverine protection than the south and east, while the divide is not so clear for coastal protection. By contrast, many parts of western Europe have relatively high vulnerability, with lowest value observed in central and northern Europe. Still, a strong decline in flood vulnerability over time is also observed for all three indicators of relative losses, suggesting improved flood adaptation. Flood protection levels have also improved since 1950, particularly for coastal floods.

Governance quality in Western Balkan countries: are they converging with the EU?

ABSTRACT The accession process of the six Western Balkan countries – Albania, North Macedonia, Montenegro, Serbia, Kosovo, Bosnia and Herzegovina – has been a long-standing issue and a stalled process in the EU’s enlargement agenda. Notably, countries aspiring to join the EU are expected during the pre-accession phases to adapt and implement (converge) the acquis Communautaire in areas that include the quality of governance and the functioning of national institutions. Using the World Bank’s six ‘Worldwide Governance Indicators’ that allow for the multidimensionality of governance, this paper examines through a battery of unit-root tests, whether the six Western Balkans have been converging with the EU in terms of governance quality. Moreover, the paper examines whether EU’s neighbourhood policy as a whole bears a responsibility for the present stalemate and whether this complies with the so-called EU conditionality principle.

THE ENVIRONMENT, SOCIAL, AND GOVERNANCE AWARD FOR PESANTREN: HOW IS IT POSSIBLE?

Purpose: The purpose of this study is to obtain the possibility of designing an award matrix for pesantren by exploring and analysing the potential application of Environment, Social, and Governance (ESG) aspects. This study aims to identify key indicators relevant to ESG in the context of Pesantren and to assess how environmental sustainability, social responsibility, and good governance implemented. Design/methodology/approach: This study uses a qualitative approach that combines a comprehensive literature review with simulation-based analysis which supports in obtaining the results of the ESG award design for pesantren. Conduct Systematic search using parameters “environment”, “social”, “governance”, “pesantren”, “Indonesia” to get some important aspects in compiling the matrix indicator. Google Scholar and Scopus report 2006-2024 years of publication. Screening and selecting relevant articles by title and abstract to establish relevance. Several ESG methodologies (Refinitiv, Morningstar Sustainalytics, Ecovadis, LSEG) reviewed and equipped with analysis of scientific articles in Indonesia and English language. This step aims to obtain the results of the design of elements, aspects, indicators, case studies by previous ESG researchers and practitioners, and the mechanism for calculating and classifying awards based on the scores obtained from a matrix design. This matrix will be supported by pilot tests based on simulation analysis at AMQ Islamic Boarding School, East Java, Indonesia. Findings: The ESG Award is made possible to give appreciation to pesantren as an educational institution that has a strategic role in sustainable development. An ESG Award Matrix for Pesantren which is each level includes specific criteria tailored to the pesantren context with a total of 12 indicators across 4 environmental indicators, 4 social indicators, 4 governance indicators so three-tier ESG award system in consist of bronze, silver, and gold. Simulation based in AMQ pesantren that received the silver category with a score of 3.55. It suggests AMQ Pesantren is making significant efforts in ESG areas. Particularly in social responsibility based on that score as silver in ESG Award. Research limitations/implications: Empirical research and monitoring-evaluating steps are needed to provide a framework for Pesantren. Further research is possible to measure and improve this ESG Award for Pesantren. Practical implications: to suggests an approach to the development of environment social governance awareness and engagement program to increase capacity, institutions, production, human resources, sustainability also. Originality/value: The novelty in this study is an analysis involving the creation of ESG (Environmental, Social, and Governance) Awards designed specifically for Pesantren in Indonesia. The process includes the development of a comprehensive ESG framework that combines Islamic principles and cultural values that are unique to Pesantren. This framework is designed to introduce and assess and appreciate the sustainability performance of these religious education institutions. This award system is organized in three tiers: Bronze, Silver, and Gold.

Economic Growth and Income Inequality in Sub-Saharan Africa: Does Environmental Policy Matter?

The counter-intuitive correlation between economic growth and income inequality in sub-Saharan Africa in recent years and the lack of consensus in the literature on this relationship call for its re-examination, particularly in the context of sustainable development. This article analyses the effect of environmental policies on the relationship between economic growth and income inequality in sub-Saharan Africa. With its suitability for analyzing non-linear relationships, the panel smooth transition regression model (PSTR) of Gonzalès (2005) was applied to data covering the period 1999 to 2021 from the World Bank, the Yale Center for Environmental Law and Policy (YCELP), the World Governance Indicator (WGI) and the World Income Inequality Database WIID.In the presence of a strict application of environmental policies, the results show a U-inverted relationship between economic growth and income inequality in sub-Saharan Africa. The more a relatively wealthy country adopts a rigorous environmental policy, the more economic growth contributes to reduce income inequalities. Thus, the socially virtuous effect of a rigorous environmental policy only occurs in economically dynamic countries. In other words, environmental policies in sub-Saharan African countries can only be promoted in relation to their economic performance. Any standardisation of environmental policies on a continental or sub-regional scale for economically different countries should be reconsidered.

Unraveling the Effects of Economic Complexity on Governance in Developing Countries. New Evidence from Instrumental Variable Quantile Regression Estimates

This study examines the effect of economic complexity on governance indicators. We use instrumental variable quantile regression to estimate a panel data model for 78 developing countries over the period 2000–2019. The results show that there is a positive relationship between economic complexity and overall governance; however, the effect varies according to the distribution of the different governance indicators. More specifically, our results show that economic complexity improves political governance only for the higher quantiles. The effect varies positively along the distribution of economic governance. For institutional governance, the effect of economic complexity is statistically significant for the median and upper quantiles. Our results also allow us to show that the effects of economic complexity on governance differ significantly between quantiles of the distribution in low- and middle-income countries. Finally, human capital, FDI inflows and reductions in income inequality are the channels through which economic complexity affects governance.

The Importance of Governance and Audit Committee in ESG Reporting Within the Aerospace Industry

In the context of the global situation, against the backdrop of a rather marked instability and perhaps inappropriate behavior of mankind in recent times, as well as climate instability, the study aims to analyze the relationship between the presence of corporate governance, the existence and expertise of the AC as well as reporting on environmental, social and governance (ESG) indicators within the aerospace industry globally, taking into account long-term environmental objectives at global level, such as net carbon emissions to tend towards zero by 2050. The data analyzed were extracted from the Refinitiv Eikon database using, globally, from which a sample of 368 public companies in the aerospace industry was extracted, analyzed over a period of 4 years, respectively 2019-2022. As a methodology used in the research, a linear regression model was used, analyzing the linear relationship between the existing corporate governance dependent variable and the independent variables: the existence of the AC, the AC's expertise and the ESG score. This research contributes to the literature on the reporting of indicators (ESG) by aerospace companies, in which regulators do not play a dominant role in determining the degree of disclosure. Probably, in the future it will be necessary for most companies to realize that transparency in reporting contributes to a balance in the world and humanity would benefit if the polluters would reduce their intensity. In conclusion, corporate governance and the AC can play a key role in the effectiveness of ESG indicators reporting in the aerospace industry, which would lead to sustainable practices and contribute to the industry's efforts to address global environmental challenges.

The impacts of World Governance Index on Global Peace Index between 2008 and 2022

PurposeWhile many factors contribute to peace, economic and governmental factors are considered essential litmus tests for determining peace levels. This study aims to examine the impacts of World Governance Index (WGI) variables on the Global Peace Index (GPI) which ranges from 0 (very high) to 5 (very low).Design/methodology/approachThe GPI serves as a key indicator of peace levels. Valid data from two databases covering 161 countries from 2008 to 2022 were collected and analyzed by using a logarithmic panel data regression model. This approach ensures robust results, particularly when endogenous and exogenous variables have different measurement units.FindingsAccording to the Feasible Generalized Least Squares (FGLS) estimators, five WGI components exhibit inverse relationships with the GPI (increasing WGI components leads to a decline in GPI, indicating an enhancement in peace quality). The most significant factor influencing peace is “Political Stability and Absence of Violence/Terrorism”, while the effects of “Voice and Accountability” and “Control of Corruption” are also noted.Originality/valueExtant studies have largely overlooked the interaction between governance and peace, often relying on regional data (with neighboring countries) or case studies on local solutions. This paper, based on data from 161 countries, evaluates governance quality and its dimensions in relation to peace conditions on a global scale, providing more generalizable results for policymakers and scholars.

Corporate Governance, ESG, Audit Committee and Financial Performance in European Investment Holding Companies

The purpose of this research paper is to explore the connection between Corporate Governance, Environmental, Social and Governance (ESG), Audit Committee (AC) and Financial Performance in European Investment Holding Companies. This paper aims to understand whether there is a correlation between these elements. The study answers the following research question: "What is the impact of corporate governance indicators, ESG and financial performance on investments in public holding companies in Europe?" Our findings reveal significant correlations between corporate governance structures and financial performance metrics, as well as the influence of ESG ratings on financial performance and corporate governance. Additionally, we identify the effects of audit committee characteristics on financial performance and ESG outcomes. The reported data is collected from a sample of companies included in the Refinitiv Eikon Database and analysed using a panel data analysis at both regional and industry level. The sample is composed of 228 European Companies, covering a period of 4 years, from 2019-2022. I chose this because it includes the impact of the pandemic and the post-pandemic recovery period, providing insight into the adaptability and resilience of companies in the face of major economic challenges.This research contributes to a deeper understanding of the dynamics between corporate governance, ESG practices and financial performance, providing valuable insights for investors, managers and regulators aiming to navigate sustainable investment strategies in the European market. This sample is considered large enough to provide meaningful data and draw relevant conclusions. Companies from various European countries were included to reflect the diversity of the market and to analyse variations in governance and ESG practices in different national contexts. The focus on public holding companies provides a specific perspective on how these entities manage corporate governance and ESG, given their importance in the European economy. The selection of the sample was based on the availability of financial and corporate governance data to ensure the reliability and validity of the analysis. This data will be used to investigate how governance and ESG practices influence companies' financial performance, thus providing important insights for understanding the relationship between these aspects within the European market.

Shadow Economy and Environmental Sustainability in Global Developing Countries: Do Governance Indicators Play a Role?

Environmental sustainability has been a challenging issue all over the globe, with air pollution posing a significant threat. One main factor contributing to air pollution is the growth of the shadow economies. This study investigates the effect of the shadow economy on air pollution and explores how these effects depend on the levels of governance indicators. We utilize key air pollution indicators: carbon dioxide (CO2) and nitrous oxide (N2O) emissions. Furthermore, we examine the role of key governance indicators: corruption control, the rule of law, and regulatory quality. The study utilizes an annual panel dataset of 107 selected developing countries worldwide, spanning from 2002 to 2020, and employs the System GMM technique, which effectively tackles the omitted variable bias, potential endogeneity, and simultaneity issues in the model. The estimation results indicate that a sizeable shadow economy significantly increases the levels of CO2 and N2O emissions. Moreover, the results reveal that robust governance frameworks, evidenced by enhanced corruption control, a stronger rule of law, and superior regularity quality, mitigate the adverse effects of the shadow economy on CO2 and N2O emissions. This highlights a significant substitutability between the shadow economy and governance indicators, indicating that improvements in governance formworks will not only reduce the size of the shadow economy but also weaken its harmful impact on air pollution. Policy initiatives should thus focus on strengthening governance mechanisms, particularly enhancing control of corruption and the rule of law to effectively reduce the environmental impact of the shadow economies in developing countries. Additionally, governments should prioritize reforms in regulations and legal frameworks to limit the expansion of the shadow economy, thereby decreasing their contribution to air pollution.

UNVEILING THE FACTORS BEHIND THE SHADOW ECONOMY: A GLOBAL INVESTIGATIONSURVEY UTILIZING PANEL DATA ANALYSIS

The paper addresses the topic of the shadow economy and the socio-economic factors that influence it. By reviewing relevant studies, we will observe that a variety of factors play a role in shaping this economy. Using a dataset comprising 50 countries from around the world, monitored over 13 years, we conducted an analysis to determine which of the discussed factors most significantly impact the level of the shadow economy. The OLS model shows a positive relationship between income inequality, the unemployment rate and the shadow economy and a negative relationship between the World Governance Index, income inequality and the shadow economy. We will find that this model will have autocorrelation problems that might influence the significance of the coefficients. Our main model (the GMM one) addresses autocorrelation and heteroskedasticity but shows some different outcomes. The findings can serve as a valuable resource for other researchers or even governments, helping to identify what changes are needed to reduce the share of the shadow economy. By the end of this research, we will have identified the key areas that need enhancement and growth to effectively address and reduce the shadow economy.

The impact of carbon awareness, country-governance, and innovation on the cost of equity: Evidence from oil and gas firms

The present paper explores the impact of carbon awareness on the cost of equity (COE) with a keen focus on the influence of country governance and innovation factors. Drawing on Bloomberg data spanning from 2011 to 2022, our analysis encompasses 263 firms within the Oil and Gas sector across 50 countries, culminating in 2122 annual observations. Through the employment of a comprehensive suite of regression analyses—including median regression, M-estimator regression, and MM-estimator regression, alongside Firm-Fixed Effect and Reverse Causality Models—we uncover a consistently negative association between carbon awareness and COE. Our investigation further assesses the effect of country-level governance on COE, revealing a universally negative correlation. Among governance indicators, regulatory quality emerges as a particularly significant factor. Similarly, we observe a consistent negative relationship between country-level innovation and COE, reinforcing the significance of national innovation capabilities in financial performance metrics. These findings remain robust across a range of tests, underscoring their reliability and relevance. The study is important for policymakers, investors, managers, and strategic environmentalists.

Role of Financial Development and ICT in Promoting Inclusive Growth in South Asia: Moderating Effects of Governance

The primary purpose of this study is to compute the index for inclusive growth by taking into account the indicators of poverty, income inequality, labor productivity, life expectancy, job creation, and climate. Calculating the index accomplished by the utilization of principal component analysis in order to acquire weights. Further in the study, the influence of financial development, governance, consumption, and economic growth on inclusive growth for selected south Asian economies (Pakistan, Bangladesh, India, Bhutan, Sri Lanka, and Nepal) is measured. The data is gathered from the World Development Index (WDI), the World Governance Index (WGI), the Internet Subscriber Database, and the International Monetary Fund Development Database. Due to the fact that the data spans from the year 2000 to the year 2023 and that missing values are interpolated through the use of trend projection, a fully balanced panel data sheet has been generated. Through descriptive statistic and VIF, prerequisite information is gathered to see the robustness of model. When it came time to make a decision on the unit root testing, the cross-sectional dependency test utilized to seek guidance. According to the findings, there is no evidence of cross-sectional dependency, and the first generation of unit root tests utilized. The stationarity results of mixed order of integration and T>N indicate the use of panel ARDL. Additionally, in order to see the influence that governance has on inclusive growth in connection to financial development, the moderator effect of governance also inquired. Based on the findings, it is concluded that regulatory quality is not playing a significant moderator role of the financial development towards inclusive growth in selected economies of south Asia. Drawing the inferences from the results of the study it is suggested that to expand the financial inclusion by supporting the digital financial services particularly in marginalized areas.

A framework of composite factors for assessing ecosystem service supply drivers: A sustainable socio-ecological perspective

Studying the coupled relationship between social-ecological systems (SES) provides a more comprehensive understanding of the impact of human activity on ecosystems, thereby facilitating the formulation of more rational environmental protection policies. A deeper understanding of this relationship can promote the sustainable utilization and management of the environment. With its abundant natural resources, Ganzhou City represents the most typical ecological location in the southern hilly region of China. In this study, we constructed a sustainable framework for composite factors to analyze their effects on the ecosystem services supply (ESS). This framework emphasizes the positive roles assessment indicators such as water, forests, lakes, grasslands, and governance have on ESS, which are directly linked to the objectives of Sustainable Development Goal (SDG) 15, which include forest conservation, biodiversity maintenance, and water resource management. The results indicate that: (1) From 2005 to 2020, the overall ESS index in the central and western regions of Ganzhou showed a trend of being lower in the north and higher in the south, with areas outside the central and western regions showing a yearly increase. (2) Water, forest, lake, grassland, and governance indicators have a positive impact on the total ESS, while indicators such as mountains, sand, society, and actors have a negative impact. (3) From 2005 to 2020, the coupling coordination relationship in the central-northern and southern regions of Ganzhou gradually strengthened, with most areas shifting from a dysfunctional state to a low coupling state. By 2030, the total ESS index in counties such as Ningdu, Yudu, Huichang, Chongyi, and Xunwu is expected to decline. Some northeastern and southern regions are projected to show an upward trend by 2035. This study will significantly contribute to the realization of SDG 15, as it integrates closely related composite factors into a sustainable SES framework, by further delving into the factors influencing ESS and providing practical guidance for achieving SDGs.

Is natural resource wealth a boon or a bane? The impact of oil rents and foreign direct investment on economic growth in Kazakhstan

The nexus between foreign direct investment, natural resource endowment, and their impact on sustained economic growth, is contentious. This study investigates the resource curse hypothesis and the effects of FDI on economic growth in Kazakhstan. The study covers the period from 1990 to 2022 and employs the Autoregressive Distributed Lag (ARDL) model and Toda-Yamamoto causality methods. The Bounds cointegration results reveal the existence of long-term equilibria between per capita GDP and the predictors. The findings reveal a significant impact of oil rents on economic growth, contradicting the resource curse hypothesis and suggesting a resource boon instead. In stark contrast, the impact of FDI on Kazakhstan’s economic growth is found to be insignificant, despite the presence of a causal nexus. Furthermore, economic freedom and export diversification have a positive significant impact on economic growth, while inflation exhibits a negative but significant impact. Although governance has a direct impact on GDP per capita, it is deemed insignificant, as the negative average governance index implies poor governance. Expectedly, the result establishes a causal effect between export diversification, economic freedom, governance, oil rents, and economic growth. This underscores the fundamental role played by the interplay of diversification, economic freedom, governance, and oil rents in fostering sustainable economic growth. In addition, economic freedom stimulates gross fixed capital formation, indicating that it enhances domestic investment. Notably, the findings refute the crowding-out effect of FDI on domestic investment in Kazakhstan. Consequently, to escape the resource curse and the Dutch disease syndrome, the study advocates for enhancing good governance capabilities in Kazakhstan. Thus, we recommend that good governance could reconcile the twin goals of economic diversification and deriving benefits from oil resources, ultimately transforming oil wealth into a boon in Kazakhstan.

ISO 14000 as a driver of sustainability: Exploring its alternative drivers beyond ISO 9000 standards

This study replicates and extends Corbett and Kirsch (2001) and Vastag (2004) using a new data set to investigate the drivers of ISO 14000 certification diffusions using decision tree analysis. The findings indicate that at the national level, ISO 14000 certification diffusions are influenced by factors other than ISO 9000 certification diffusions, such as the number of environmental treaties signed and ratified, industrial activities as a percentage of GDP, and GDP per capita, thus provides a range of managerial insights and enhances scholarly understanding of sustainability beyond the influence of ISO 9000. Future studies might extend the countries included in this study to see if the results are the same. Future research may include other factors like a country’s Environmental, Social, and Governance (ESG) indicators to better understand its commitment to sustainability, including environmental sustainability. The country’s culture may influence customers, investors, and other stakeholders’ knowledge and desire for sustainable practices and inspire firms to obtain ISO 14000 certifications. Since larger firms may seek ISO 14000 certification, future studies may evaluate the influence of the number of large firms in various countries as drivers of ISO certification diffusions.

Governance, foreign investment, and growth: the impact of governance indicators, foreign direct investment, economic expansion, and industrialization on carbon emissions

Governance, foreign investment, and growth: the impact of governance indicators, foreign direct investment, economic expansion, and industrialization on carbon emissions

The Sustainable Development Index: An Integration of the Ecological Framework Considering the Governance-development Nexus

This paper aims to enhance the formulation of the Sustainable Development Index (SDI) by introducing a further correction term, governance lack (GL) index, in additional to the ecological impact index (EII). The GL considers a country’s governance lack by calculating a governance index (GI) with the World Governance Indicators (WGIs) starting from 1996. The SDI(g) retains the original formula of the SDI, thus remaining an indicator of strong environmental sustainability but adequately considering in its formulation the differences significant in countries’ governance climate. Finally, graphical relationships between DI and GI, and DI and (EII + GL) are shown, and the existence of these relationships are tested with WLS and nonparametric regressions. Our findings show that significant differences in country ranking were found; the graphical relationships are empirically proven; and countries with a worse GI have been further penalized in the SDI(g) ranking.

Do governance indicators have a role in remittances-growth nexus in Egypt?

Purpose ― Drawing on annual data from 1996 to 2022, this study aims to examine the effect of Egypt’s real GDP growth. Methods ― Autoregressive Distributed Lag (ARDL) and Cointegration technique are applied by first examining the stationarity of the series by utilizing the Augmented-Dicky-Fuller (ADF) unit root test. The bound cointegration test is then implemented to evaluate the existence of cointegration among the variables. Findings ― The results indicate that the GDP growth rate has a long-run positive relationship with remittance inflows in Egypt. This paper also finds that the average governance indicators in Egypt, which include government effectiveness, political stability, control of corruption and regulatory quality, voice and accountability, and the rule of law, could help facilitate the long-run effect of remittances on GDP growth. Implication ― The findings imply that maintaining high levels of governance indicators is essential for helping Egypt benefit from remittances and enhancing its economic growth.Originality/value ― The study is a pioneer in including the average governance indicators in the remittance-growth nexus study for Egypt. Its purpose is to assess whether governance quality affects the nexus and whether there exists a threshold for the average governance indicators below which the flow of remittances does not encourage economic growth.