High Investment Rates Research Articles

The economic potential of the brics countries as a challenge to modern world realities

Today, the governments of various countries, regardless of the level of economic growth of the state, strive to initiate macroeconomic policies aimed at achieving better economic indicators in order to increase the level of business activity and, finally, to ensure a better quality of life for people. In this regard, the policy of the BRICS countries is very indicative. The author analyzes the importance of the BRICS group as representatives of developing countries in the world economy. The article points out that the financial crisis did not have a strong impact on the BRICS group, and its economic performance was much better than that of developed countries. The main factors that led to the economic expansion of the group were the increased influence in a number of markets, as well as the huge scale of resources, including labor. For example, Brazil and Russia rely mainly on huge mineral reserves and speculation in international markets. China has the advantage of cheap labor and resources at low prices. India also relies on cheap labor. Last but not least, all the BRICS countries, except Brazil, demonstrate very high rates of investment. The purpose of the work is to consider the economic potential of the BRICS countries as a challenge to modern economic realities.

СТРУКТУРНЫЕ СДВИГИ В ЭКОНОМИКЕ КИТАЯ

Economic reforms changed a course of industrialization in China. Expansion of heavy industries was a must for the authorities during the previous era of central planning. Marketization paved the way for a redistribution of resources in favor of those industries where an abundant and cheap labor force could be applied effectively. That cause of events, by and large, corresponded to a comparative advantage of China’s economy. More rational use of resources provided preconditions for a fast economic growth to sustain. However, by now high investment rate and adaptation of foreign technologies have exhausted their potential as drivers of a structural transformation. Innovation capabilities are needed for China’s economic success to go on. The review covers how this research agenda is treated by modern Chinese economists.

Online Appendix for “Macro-Finance Models with Nonlinear Dynamics”

Section 1 describes the model in greater details. Section 2 displays a benchmark model without intermediary frictions and compare the decentralized frictionless model with the social planner’s problem. Section 3 briefly introduces the various numerical solution methods we use to solve the model. Section 4 provides additional results of quantitative analysis. Section 5 compare two cases with high and low investment rates, and we show that the local perturbation method can fail in the case of low investment rate.

Herding Through Booms and Busts

This paper explores whether rational herding can generate endogenous aggregate fluctuations. We embed a tractable model of rational herding into a business cycle framework. In the model, technological innovations arrive with unknown qualities and agents have dispersed information about how productive the technology really is. Rational investors decide whether to invest based on their private information and the investment behavior of others. Herd-driven boom-bust cycles arise endogenously in this environment when the technology is unproductive but investors' initial information is unusually optimistic. Their overoptimism leads to high investment rates, which investors mistakenly attribute to good fundamentals, leading to a self-reinforcing pattern of higher optimism and higher investment until the economy reaches a peak, followed by a crash when agents ultimately realize their mistake. We calibrate the model to the U.S. economy and show that it can explain boom-and-bust cycles in line with episodes like the dot-com bubble of the 1990s.

Influences of the compressed dry air-based active cooling on external and internal qualities of wire-arc additive manufactured thin-walled SS308L components

Among additive manufacturing (AM) technologies, wire-arc additive manufacturing (WAAM) features a high material deposition rate and low costs of device investment. However, WAAM parts generally undergo a complex-thermal history and a high accumulation of heat, which significantly influences its external and internal qualities. In this article, the influence of different cooling conditions on the qualities of WAAM SS308L components was addressed. Three thin walls were built by WAAM with three cooling conditions. The first and second walls were produced with the free-cooling condition, where an interlayer holding time (Tih) of 30 s and 60 s was used between two successive deposits, respectively. The third wall was built with the compressed dry air (CDAir)-based active cooling, in which the compressed dry air (CDAir) and an interlayer holding time of 10 s were employed between two adjacent layers to cool down the workpiece. The obtained results indicate that the evolution of microstructures in three walls is very likable. In the bottom and the middle regions, the microstructure mainly contains vertically oriented dendrites of austenite and ferrites that appear in the austenite grains’ boundary. The austenitic phases also appear in equiaxed grains in the top region. However, the CDAir-based active cooling has noticeable effects on the spacing of secondary dendrite arms (SSDA) in the middle of the walls. The wall built with the CDAir-based active cooling features the smallest average SSDA, followed by the walls produced in the free cooling condition and a Tih of 60 s and 30 s, respectively. Accordingly, the CDAir-based active cooling produces the highest average hardness and tensile strengths. Moreover, the wall produced using the CDAir-based cooling also reveals the lowest surface roughness. Therefore, it can be considered that the CDAir-based active cooling is a reasonable option to enhance the internal and external qualities of WAAM stainless steel 308L components.

Corruption impacting regional economic growth: A dynamic panel data analysis for the case of Vietnam

AbstractThis study analyses the effects of corruption on Vietnamese provinces and cities’ economic growth using a dynamic panel data analysis with a system generalized method of moments approach. Although this study investigates both the direct and indirect effects of corruption, it focuses more on the direct effects. The estimation results consistently support the assertion that, in general, corruption is detrimental to economic growth. Disaggregating this total effect, however, reveals more noteworthy issues in the Vietnamese context. Corruption directly impedes growth rates by reducing the efficiency of investments, and this effect is more intense in provinces and cities with higher investment rates. However, the adverse direct impact of corruption may be alleviated by its positive impact on investment rates, which is an unexpected finding.

Does Short-Selling Affect Mutual Fund Shareholdings?

Using the gradual lifting of the short-sale ban in the Chinese stock market from 2010 to 2019 as natural experiments, the paper studies mutual funds’ strategies towards short-sales. The difference-in-difference regressions consistently show that mutual funds hold fewer shares when stocks are allowed to sell short, and their shareholding reduction towards short-selling is more intensive in stocks with higher valuation, larger market value, higher profitability, higher investment rate or more media coverage. These results are robust in short-term and long-term sample, annual data and classified funds. Our findings suggest that mutual funds generally dislike short-selling activities, and since short-sellers process negative information to alleviate stocks’ overvaluation, or spread pessimistic beliefs to undervalue high-quality stocks, mutual funds’ dislike towards short-selling reinforces in overvalued or high-quality stocks.

Searching Beyond the Horizon: Opportunity and Motive in CVC Investments

We examine how corporate firms deal with the competitive effects of technological change by utilizing corporate venture capital (CVC) investment opportunities to source external knowledge. Whereas previous scholarship has largely focused on the composition of CVC investment portfolios to predict performance outcomes, we examine organizational level drivers of CVC investment behavior. We contend that CVC investment behavior is influenced by the interaction between two fundamental considerations: the supply of investment opportunities made available to the corporate firm because of its position in the environment; and the demand for new technological investments deriving from the need to cope with technological change. We argue that the degree to which CVC programs place bets on external startup ventures with uncertain prospects depends not only on their position in investment syndicate networks but also on how organizational attention is systematically guided by the threats posed by technological change. We analyze investments made by CVC programs of 209 publicly traded firms over 20 years and find that more centrally placed corporate firms in the VC investment syndicate have higher investment rates. We find that greater focus of the corporate firm’s technological capabilities induce them to take advantage of the investment opportunities that arise from a central position in syndication networks. Our findings imply that CVCs serve as a “window on technology” only to the extent that technological positions of corporate firms direct attention to choices within the opportunity set that is determined by the corporate firm’s network of investment relations.

EFFECTS OF WELDING CURRENT ON THE SHAPE AND MICROSTRUCTURE FORMATION OF THIN-WALLED LOW-CARBON PARTS BUILT BY WIRE ARC ADDITIVE MANUFACTURING

Wire arc additive manufacturing (WAAM) is nowadays gaining much attention from both the academic and industrial sectors for the manufacture of medium and large dimension metal parts because of its high deposition rate and low costs of equipment investment. In the literature, WAAM has been extensively investigated in terms of the shape and dimension accuracy of built parts. However, limited research has focused on the effects of welding parameters on the microstructural characteristics of parts manufactured by this process. In this paper, the effects of welding current in the WAAM process on the shape and the microstructure formation of built thin-walled low-carbon steel components were studied. For this purpose, the thin-walled low-carbon steel samples were built layer-by-layer on the substrates by using an industrial gas metal arc welding robot with different levels of welding current. The shape, microstructures and mechanical properties of built samples were then analyzed. The obtained results show that the welding current plays an important role in the shape stability, but does not significantly influence on the microstructure formation of built thin-walled samples. The increase of the welding current only leads to coarser grain size and resulting in decreasing the hardness of built materials in each zone of the built sample. The mechanical properties (hardness and tensile properties) of the WAAM-built thin-walled low-carbon steel parts are also comparable to those of wrought low-carbon steel, and to be adequate with real applications.

Industrial districts and the fourth industrial revolution

Purpose This paper aims to explore if firms located in industrial districts (IDs) have different adoption paths concerning Industry 4.0 technologies and get different results with respect to other similar firms located outside IDs. Design/methodology/approach The study is based on a quantitative analysis related to an original data set of 206 Italian manufacturing firms specializing in made in Italy industries and adopting Industry 4.0 technologies. A case study of a district firm is also presented to explain the rationale of investment strategies and results obtained. Findings The analysis shows that there are differences between district and non-district firms when Industry 4.0 technology investments are concerned (higher investment rate in big data/cloud and augmented reality for district firms than non-district ones). In contrast to a breakthrough view of the fourth industrial revolution, the study suggests that 4.0 technologies emphasize the peculiarities and competitiveness factors typical of the district model in terms of customization and flexibility. There are differences in the motivations of adoption (product diversification for district firms vs productivity enhancement for non-district firms) and in the results achieved. Originality/value The paper is one of the first attempts to empirically explore the technological innovation paths related to Industry 4.0 within IDs, therefore, contributing to the debate on the possible evolution of the district model

China, Like the US, Faces Challenges in Achieving Inclusive Growth through Manufacturing

AbstractFor more than three decades the goal of becoming “the factory of the world” has been at the core of China's development strategy. This strategy, in combination with high rates of domestic investment and low rates of consumption, has made Chinese production the most manufacturing intensive in the world. But as its wages have risen, China's competitiveness in the most labor‐intensive manufacturing industries has eroded. Its ability to assemble products remains a major source of its exports, but it has also tried to shift toward more sophisticated value‐added production domestically. Chinese domestic spending has shifted away from investment toward consumption as citizens' income has grown. Like Americans, Chinese are also spending more on services than on manufactured goods. All of these changes are fundamentally altering the structure of China's production, reducing the role of manufacturing and increasing the skill levels of workers in manufacturing. This paper reviews the challenges posed by these developments for China's long‐term goal of achieving more inclusive growth. It presents evidence that the commonly held perceptions that Chinese manufacturing employment growth is robust are wrong. In fact, such growth has peaked and China is now following a pattern of structural change that is typical of a more mature emerging economy, in which the share of employment in manufacturing declines as workers are increasingly employed in services.

TPM Maintenance Management Model Focused on Reliability that Enables the Increase of the Availability of Heavy Equipment in the Construction Sector

The purpose of this paper is to present a maintenance study focused on total productive maintenance (TPM) and reliability-centered maintenance (RCM). Its approach is based on the first pillars of TPM, preventive and autonomous maintenance, as well as the FMEA analysis of RCM for maintenance analysis, which was conducted in this study. The implementation of TPM was successful in that various preventive maintenance (PM) policies assigned to the assets were implemented and it was demonstrated that TPM application in the construction industry could reduce the excessive accumulation of maintenance with the same effective optimization, and with support from RCM analysis and its heavy equipment systems analysis. Excessive corrective maintenance accounts for high investment and delay rates in work times of the assigned project. Traditional methods of availability guarantee, such as reactive or routine maintenance, are insufficient to satisfy a heavy equipment maintenance plan; therefore, what is called for is the systematic application of RCM and TMP because they allow the selection and application of effective PM tasks. An approach that develops and thoroughly analyzes the strategies of continuous corrective and PM is used with an atmosphere of uncertainty and with operational data limited by criticism. Results show a 90% improvement in availability.

Entre o “milagre econômico” e o “quinquênio de ouro”: análise introdutória dos planos econômicos brasileiro e português (1968-1973)

Este trabalho tem como tema central a análise de uma das formas de organização dos interesses das frações burguesas dirigentes, os planos econômicos. O recorte temporal, 1968-1973, justifica-se por ser este o momento, tanto no Brasil quanto em Portugal, da consolidação de grandes projetos industriais e de intensa defesa do desenvolvimentismo como estratégia de crescimento econômico acelerado. Logo, o objetivo central é analisar de modo comparado os planos econômicos de dois países que receberam alcunhas distintas em um mesmo momento de crescimento econômico com altos índices de investimento e abertura da economia a capitais estrangeiros – guardadas as especificidades. Em Portugal, o governo Caetano ficou conhecido como “os anos dourados do capitalismo português” ou o “quinquênio de ouro”, enquanto o governo Médici, no Brasil, ficou conhecido como um momento de “milagre econômico”. Como objetivo secundário, pretende-se mapear as semelhanças e diferenças do III Plano de Fomento – elaborado em 1967 com metas a serem alcançadas entre os anos de 1968 e 1973 – e o I Plano Nacional de Desenvolvimento (I PND) entre 1972 e 1974. Como ferramenta central de análise, este artigo tem como arcabouço teórico as elaborações de Antonio Gramsci a respeito do Estado, entendido em uma perspectiva ampliada, isto é, as instituições oficiais como o âmbito restrito deste (também nomeada como Sociedade Política) e a Sociedade Civil como aspecto de ampliação da noção de Estado. A hipótese central perpassa pela noção de centralidade do desenvolvimento econômico nos dois países supramencionados como estratégia de promoção do crescimento econômico acelerado com uma argumentação de base social muito forte que, de certa forma, legitimaria o discurso desenvolvimentista.

Impact of health education on knowledge and behaviours toward obstetric fistula among women of reproductive age in Uganda

Obstetric fistula is among the most severe maternal morbidities. It is caused directly by obstructed labour, and indirectly by social, political, and economic factors. Effects of obstetric fistula include chronic urinary incontinence. Urinary incontinence often leads to isolation and death if left untreated. Death of women during childbirth is detrimental to both social economic transformation and shift of poor economies to middle income status. In this study, we estimate the burden of obstetric fistula on Ugandan women, and the effect of educating these women on its causes. We hypothesise that symptomatic women seek treatment after interactions with a treated woman. We consider one cycle of fistula and seek to determine how many women will eventually seek treatment, when one woman is treated in a population. We further assume that each treated woman becomes the educational resource for more symptomatic women. We then invest in getting women into treatment, providing treatment, or educating them about prevention and treatment of obstetric fistula. Results show that for each investment strategy, there exists a unique maximal solution that remains bounded. It is also shown from the model that high investment rates leads to high treatments rates. However, the highest treatment output is obtained when the level of investment is 44.9%. We also see from the results that for every one woman treated, 17 more seek treatment. However, as investment increases, the number of women that are eventually treated reduces due to lack of further investment into treatment and therefore no more women to treat. Results also show that educating women reduced fistula prevalence although the magnitude of reduction depended on the level of education coverage. These results show that an optimal strategy to reduce fistula prevalence would require achieving a balance between the two desirable but incompatible health outcomes. This will help maximise the total return or effectiveness under given circumstances such as continued women that develop fistula due to lack of skilled healthcare or lifetime incontinence due to lack of treatment. From this study we conclude that improving access to quality health education will contribute to the elimination of obstetric fistula in Uganda.

Insurability of Cyber Physical Production Systems: How Does Digital Twin Improve Predictability of Failure Risk?

Original equipment manufacturers (OEMs), machine operators and suppliers are three main stakeholders in today’s industrial asset management lifecycle. Considering high rate of investment and prices to purchase and operationalize secured IoT-based production systems, insurance companies explore contributing into industrial asset management lifecycle by providing new products to transparently monitor online condition and operation status of industrial machines, and accordingly adjust the insurance prices and offers. Hence, joint efforts and cross-disciplinary research is vital to introduce a new insurance product, i.e. failure-based insurance, gaining benefits from AI technologies and knowledge-based maintenance approaches. This paper provides insights into the aforementioned problem, and presents the work-in-progress research on failure-based insurance model aided by Digital Twin technology. Finally, the practical implications and future research directions are outlined.

Differentiation of Russian megacities by level of investment in comprehensive residential development

The paper presents main findings of the research on Russian major urban centers differentiation according to rates of investment in comprehensive urban development. Thorough investigation of current research on the nature of comprehensive urban development allows authors to define main indicators that determine the demand for residents’ vital needs satisfaction through public amenities provision. A review of global trends in Smart urban development resulted in proposing several hypotheses on contemporary conditions of comprehensive urban development in major urban centers. These hypotheses are aimed at integrating available statistical data on residents’ vital needs satisfaction. Comparative analysis is conducted via STATISTICA software package with the use of hierarchical agglomerative clustering method. The clusters of Russian cities are formed using differences in the variables of investment rates in principle areas of comprehensive urban development. As a result of comparative analysis, authors describe two clusters of Russian major urban centers: urban centers that are showing high rates of investment in public amenities like kindergartens, schools, medical clinics; and cities that are clearly lacking sufficient investment in comprehensive urban development.

Fiscal incentives, competition, and investment in China

This paper explores how fiscal incentives offered to local governments in China affect investment rates in their jurisdictions. Theoretically, we build a simple fiscal competition model to establish the linkage between local fiscal incentives and expenditure policy and consequently, capital movement. The key prediction of the model, borne out by data from Chinese provinces spanning 2004–2013, is that an increase in the local corporate income tax-sharing ratio, which proxies fiscal incentives offered to local governments, motivates local governments to compete for capital investment through increased public expenditure. Our results contribute to the literature on both fiscal federalism and state capacity by showing that local fiscal incentives significantly shape policy choices and local economic performance. In addition, by exploring fiscal incentives offered to local governments, we offer a novel explanation for the unusually high investment rate in China that has been sustained over a prolonged period.

The Role of Internally Financed Capex in Rising Chinese Corporate Debts

This paper aims to identify potential drivers behind China’s rising corporate leverage, using an international aggregate panel dataset. We find strong evidence of significantly negative effects of the internally financed share of capital expenditure on the change of corporate debt/GDP: a rise in internally generated funds relative to gross capital formation consistently slows corporate debt buildup. While our core finding is robust to choices of benchmark models, control variables and data samples, this negative effect appears more pronounced in China’s case. Our regressions also suggest more important roles played by real economic factors than monetary factors. While the investment rate contributes to rising corporate debt, a higher saving rate dampens corporate leveraging. Finally, we present some evidence of consistently negative impacts of government debt on corporate leveraging, suggesting possible interactions between corporate and government debts. Overall, our empirical evidence points to the declining investment efficiency as a possible important driver behind China’s high and rising corporate leverage, in light of its high investment rate and low internally funded capex ratio.

Explaining the East Asia miracle: The role of urbanization

Defying the law of diminishing marginal returns, many countries experienced high rates of investment for a prolonged period of time during their take-offs. This paper represents a first attempt to explain this contradiction from the perspective of urbanization. Urbanization provides opportunities for investment and helps moderate the capital/labor ratio in the urban sector. In particular, it promotes knowledge accumulation through “learning by doing”. This can explain why the law of diminishing marginal returns to capital is not applicable to economies in the early period of their catching-up. More specifically, we construct a two-sector general equilibrium model incorporating urbanization and “learning by doing”, predicting that in the presence of urbanization, as long as the “learning by doing” effect is sufficiently large, capital return will depict an inverted U-shape as capital accumulates or urbanization proceeds. Empirical evidence from China confirms the theoretical prediction.

Military and Democratic Rules In Nigeria (1981-2016): Which Has Greater Impact?

Background: In recent years, many countries of the world turn away from military system of government to embrace democracy. Some studies have argued that good democracy is not a by-product of development but a stepping stone while others assert that the military is seen as a modernizing agent and a vigorous champion of change and development in some countries. This study therefore tried to analyse the contributions of the military and democratic political systems to the growth of the Nigerian economy between 1981and 2016. Method: Secondary data were collected via CBN statistical bulletin and the World Bank. Dummy variable analysis using Ordinary Least Squares technique was employed. Real Gross Domestic Product (LGDP) was used as the dependent variable with Unemployment rate (UNMP), Investment Rate (LINVST), Inflation (INFL), Broad Money Supply (LM2) as independent variables with the dummies. Unit root test, Johanson’s cointegration test and the Engle Granger 2-step tests were carried out. Finding: The regression result showed that the military government contributed significantly to the growth of the Nigerian economy more than the democratic government by 35.98% even though the democratic government had more significant investment rate (8.16%). Conclusion: The study concludes that democratic government should be adopted and made more efficient in other to materialise the high investment rate accrued to it through a strategic corruption fight and creation of politically and economically friendly environment . Keywords : Military Rule, Democracy, Impact, Economic Growth, Nigeria DOI : 10.7176/JAAS/54-06 Publication date : April 30 th 2019