Intermediate Development Research Articles

Macroeconomic Factors of Stock Market Development (The Case of Saudi Arabia)

Most economists recognize that a healthy capital market can enhance economic growth. In 2016, Saudi Arabia launched Vision 2030, and the Financial Sector Development Program is part of the Vision. The program aims to achieve economic diversification, reduce oil dependence, and trigger economic growth. Capital market development has an integral part to play in achieving Vision 2030 goals. For this reason, it is essential to investigate the factors that could influence it. The literature on the impact of macroeconomic factors on the stock market development is inconclusive; thus, it is difficult to generalize the outcome of previous studies. This research investigates the macroeconomic and institutional determinants of stock market development in Saudi Arabia from 2008 to 2021 by using a multiple linear regression approach. Following previous research, our analysis explores the impact of several factors, including Global Trade Openness, Market Depth, Macroeconomic Stability, Control of Corruption, Income level, Private capital flows, Financial intermediary development, Economic Development, Domestic Savings and investment. Among the nine evaluated factors, only four were significant. We find that the determinants of stock market development in Saudi Arabia are Economic Development, Income level, Control of corruption, and Market Depth.

How Do Highways Enable Firm Productivity? The Role of Innovation

Transport infrastructure has been found to shape various outcomes of economic organizations by lowering travel costs and improving market access. In this article, we examine the spillover effect of highways on firm-level productivity and introduce innovation as a potential underlying mechanism. We argue that connection to national highways overcomes the localization of knowledge spillover by connecting ideas, information, knowledge, and talent across regions, which further improves firm productivity. Using a manufacturing sample from 1998 to 2007 in the context of China, we find a positive relationship between connection to the highways and firm productivity, and this relationship is mediated by innovation performance. Our results also suggest that such a mediating effect is strengthened when a firm is located in a region with greater market liberalization or intermediary development. Our findings add to the knowledge of economic geography by providing new insights into the interplay between infrastructure and organizational outcomes.

Innovation intermediaries at the convergence of digital technologies, sustainability, and governance: A case study of AI-enabled engineering biology

We probe the missions and practices of innovation intermediaries involved in the convergence of digital technologies, focusing on the case of AI-enabled engineering biology (AI-EB). As in other areas of emerging digitalization, applications and commercialization in this convergent technology domain raise multiple societal, ethical, and sustainability questions. Through interviews with various stakeholders involved in the AI-EB innovation ecosystem, we explore the extent to which these innovation intermediaries, as pivotal actors in innovation ecosystem development, are embedding attention to societal and sustainability objectives and concerns as well as facilitating economic goals. Notwithstanding available frameworks for responsible innovation that encourage attention to societal and sustainability implications, we find that innovation intermediaries in the engineering biology domain continue to emphasize conventional scale-up and commercialization approaches. Insights for intermediary development, research management, and policy are explored.

Research on index construction of sustainable entrepreneurship and its impact on economic growth

Based on the triple bottom line of sustainable development, sustainable entrepreneurship has been well studied; however, the existing literature on the measurement of sustainable entrepreneurship is still limited. This paper attempts to quantify sustainable entrepreneurship through three indicators, innovative spirit, entrepreneurial spirit and decision-making spirit, and constructs a new time-varying index of sustainable entrepreneurship by the time-varying coefficient state space equation model. Applying the new time-varying index, this paper studies the impact of sustainable entrepreneurship on Chinese regional economic growth and explores the role of technical R&D and financial intermediary development in the path of influence. The empirical results show following conclusions. First, sustainable entrepreneurship promotes regional economic growth. Second, there exists a positive mediation effect of sustainable entrepreneurship influencing regional economic growth through technical R&D. Third, financial intermediaries have a positive effect on sustainable entrepreneurship, and they play a moderating role in the first half of the path through which sustainable entrepreneurship affects regional economic growth through technical R&D.

Tribalism and Finance

We assess the correlations between tribalism and financial development in 60 countries using data averages from 2000 to 2010. The tribalism index is used to measure tribalism whereas financial development is measured from perspectives of financial intermediary and stock market developments. The long-term finance variable is stock market capitalisation while short-run variable is private and domestic credit. We find that tribalism is negatively correlated with financial development and the magnitude of negativity is higher for financial intermediary development relative to stock market development. The findings are particularly relevant to African and Middle Eastern countries where the scourge of tribalism is most pronounced. JEL: E62, H11, H20, G20, O43

Finance, Institutions, and Private Investment in Africa

AbstractThis article extends the debate on finance versus institutions and measurement of property rights institutions (PRI). We assess the relationships between various components of PRI and private investment, notably: political, economic, and institutional governances. Comparative concurrent relationships of financial dynamics of depth, efficiency, activity, and size are also investigated. The findings provide support for the quality of institutions as a better positive correlate of private investment than financial intermediary development. The interaction of finance and governance is not significant in potentially promoting private investment, perhaps due to substantially documented surplus liquidity issues in African financial institutions. The empirical evidence is based on 53 African countries for the period 1996‐2010. Policy measures are discussed for reducing financial deposits, increasing financial activity, and hence, improving financial efficiency.Related ArticlesAideyan, Osaore. 2016. “Political and Institutional Prerequisites for Monetary Union: Assessing Progress in the Economic Community of West African States (ECOWAS).” Politics & Policy 44 (6): 1192‐1212. https://doi.org/10.1111/polp.12183Asongu, Simplice A., and Joseph Nnanna. 2019. “Foreign aid, Instability, and Governance in Africa.” Politics & Policy 47 (4): 807‐848. https://doi.org/10.1111/polp.12320Scarlato, Margherita, and Giorgio d'Agostino. 2019. “The Political Dimension of Cash Transfers in Latin America and Sub‐Saharan Africa: A Comparative Perspective.” Politics & Policy 47 (6): 1125‐1155. https://doi.org/10.1111/polp.12332

Mindestfallzahlensteuerung und Bedarfsgerechtigkeit in der stationären Versorgung

The mainly medical law and health economics treatise follows the interdisciplinary theoretical approach of health services research. The focus is on managing health care in Germany through minimum numbers of cases. What effects does this concept have on the quality aspect and the needs-based approach to inpatient care. Methodologically, a selective literature search is used. In a comparative analysis between the states of Saxony-Anhalt and Schleswig-Holstein, empirical data are examined. As a result, it can be stated that the actors have experienced a power shift in the health system due to the relevant legislation. In the future, it will be less the hospital planning of the federal states than the intermediary Federal Joint Committee (G-BA) and corporate structural development that will drive the centralization of the care landscape.

Asymmetric Impact of Financial Intermediary Development in Low- and High-Income Countries

This study uses the quantile regression method developed by Koenker and Bassett (1978) to examine the asymmetric effect of financial intermediary development on economic growth in low- and high-income countries. A three-sector neoclassical growth model composed of a representative family sector, production sector, and the financial intermediary sector is constructed, and the equilibrium solutions determine the variables employed in the empirical model. The empirical results reveal an asymmetric relationship between financial intermediary development and economic growth. Financial intermediary development is the main driving force of economic growth for high-income countries only, not for low-income countries. Overall, this study suggests that countries should not develop financial intermediaries indiscriminately in the pursuit of economic expansion, especially for low-income countries. Our empirical findings have important policy implications for regulators who are especially concerned about countries’ sustainable economic growth.

Financial Development and Economic Growth an Empirical Analysis for Syria

Recently, Syria startup a remarkable economic and financial revolution, which raised many positive expectations regarding development and growth in all sectors and on many levels. This research is evidence for an individual case study, although it is common to study regression across countries to judge the effects of financial development, but it is also important to study the evidence for each country at least at the simple level. Through this research we will highlight the impact of previous Syrian reforms, and analyze their role to reach this important stage, by explaining the relationship between financial development and economic growth in Syria, over a period of twenty years, in addition to examines whether the exogenous component of financial intermediary development influences economic growth, by using the direction of causality between financial development and economic growth in Syria is investigated for the period 1970-2009. In order to see the impact of different aspects of financial development . The results were obtained using statistical methods, and further provided panel results supported with evidence involve the legal, regulatory, and policy determinants of financial development.

Tribalism and Finance

We assess the correlations between tribalism and financial development in 60 countries using data averages from 2000-2010. The tribalism index is used to measure tribalism whereas financial development is measured from perspectives of financial intermediary and stock market developments. The long term finance variable is stock market capitalisation while the short run variable is private and domestic credit. We find that tribalism is negatively correlated with financial development and the magnitude of negativity is higher for financial intermediary development relative to stock market development. The findings are particularly relevant to African and Middle Eastern countries where the scourge of tribalism is most pronounced.

Macroeconomic factors and stock market development in sub-Saharan Africa: does the measure of stock market development matter?

We examine the impact of macroeconomic factors on stock market development in sub-Saharan Africa. More specifically, we examine the sensitivity of the impact of macroeconomic factors on stock market development to the choice of measure of stock market development. We apply the Feasible Generalised Least Squares (FGLS) estimator on a panel dataset of 12 countries over the period 2000–2015. The empirical results indicate that income, trade openness, financial openness, macroeconomic instability, financial intermediary development, savings, and investment influence stock market development. We provide evidence to suggest that the impact of macroeconomic factors on stock market development is sensitive to the choice of measure of stock market development. The implication of our findings is that the multidimensionality of stock market development should not be jettisoned in making policy prescriptions for stock market development in sub-Saharan Africa.

Does politician turnover affect foreign subsidiary performance? Evidence in China

While research has acknowledged the importance of political risks in affecting multinational companies’ behavior and performance outcomes, the roles of political agents in this process have largely been ignored. This study explores one important dimension of political risks caused by politician turnover at the sub-national level and examines its influence on the performance of foreign subsidiaries. We contend that policy uncertainty arising from politician turnover adversely affects the performance of foreign subsidiaries. We further develop a multi-level framework identifying contingent factors at event (i.e., internal promotion), firm (i.e., international joint venture), and environment (i.e., market intermediary development) levels that moderate the relationship between politician turnover and MNC performance. Analyses of foreign subsidiaries located in 310 Chinese cities from 1998 to 2007 largely support our thesis that politician turnover dampens the performance of foreign subsidiaries. This negative performance impact is then alleviated for internal promotions, international joint ventures, and firms located in regions with a high degree of market intermediary development. Our study opens a new avenue for examining the role of host-country political agents in affecting MNC performance.

Problems and prospects of development of intermediary business in Ukraine

The article deals with the problem of identification and search of the future-oriented directions of intermediary business development in Ukraine in the conditions of transformation processes in the national economy. The article describes the essence of trade and intermediary activity, outlines the main components and represents the content of trade and intermediary transactions. On the basis of the general analysis of theoretical and practical works on the implementation of trade and intermediary activities, the main problems that impede the development of intermediary business in Ukraine are identified. It is noted that it is expedient to use the formulated signs and principles for the organization of trade and intermediary activities. The prospects of using the newest marketing tools (neuromarketing) in the trade-intermediary business are described. It is noted that it is necessary to improve the normative base, that now inhibits the development of trade and intermediary activities.

Can Financial Intermediary Development Improve Financial Literacy? Evidence from China

Can Financial Intermediary Development Improve Financial Literacy? Evidence from China

Financial development and prehistoric geographical isolation: global evidence

Using cross-country differences in the degree of isolation before the advent of technologies in sea and air transportation, we assess the relationship between geographical isolation and financial development across the globe. We find that prehistoric geographical isolation has been beneficial to development because it has contributed to contemporary cross-country differences in financial intermediary development. The relationship is robust to alternative samples, different estimation techniques, outliers and varying conditioning information sets. The established positive relationship between geographical isolation and financial intermediary development does not significantly extend to stock market development.

Competitiveness as mediating variable in measuring supply chain performance

Garment, a sub-sector contributing the largest export value of textile and apparel (TA intermediary industry development, infrastructure improvement, trade system improvement of bonded area, financing, and full-service industry development. Further research needs to be performed by involving the government's policies for strengthening T&A competitiveness as a moderating variable to determine the effectiveness of these policies.

Financial Development and Pre-Historic Geographical Isolation: Global Evidence

Using cross-country differences in the degree of isolation before the advent of technologies in sea and air transportation, we assess the relationship between geographic isolation and financial development across the globe. We find that pre-historic geographical isolation has been beneficial to development because it has contributed to contemporary cross-country differences in financial intermediary development. The relationship is robust to alternative samples, different estimation techniques, outliers and varying conditioning information sets. The established positive relationship between geographic isolation and financial intermediary development does not significantly extend to stock market development.

The Impact of Financial Development on Economic Growth in Nigeria: An ARDL Analysis

This study empirically examines the relationship between financial intermediary development and economic growth in Nigeria over the period 1981–2011 using the auto-regressive distributed lag (ARDL) approach to co-integration analysis. The results show that the relationship between financial development and economic growth in Nigeria is not significantly different from what has been observed generally in oil-dependent economies. The relationship between financial intermediary development and economic growth in Nigeria is found to be insignificantly negative in the long-run and significantly negative in the short-run. The results highlight the dominant role of the oil sector in economic activities in Nigeria.

The Finance Growth Link: Comparative Analysis Of Two Eastern African Countries

This paper examines the finance growth link of two low-income Sub-Saharan African economies – Ethiopia and Kenya – which have different financial systems but are located in the same region. Unlike previous studies, we account for the role of non-bank financial intermediaries and formally model the effect of structural breaks caused by policy and market-induced economic events. We used the Vector Autoregressive model (VAR), conducted impulse response analysis and examined variance decomposition. We find that neither the level of financial intermediary development nor the level of stock market development explains economic growth in Kenya. For Ethiopia, which has no stock market, intermediary development is found to be driven by economic growth. Three important inferences can be made from these findings. First, the often reported positive link between finance and growth might be caused by the aggregation of countries at different stages of economic growth and financial development. Second, country-specific economic situations and episodes are important in studying the relationship between financial development and economic growth. Third, there is the possibility that the econometric model employed to test the finance growth link plays a role in the empirical result, as we note that prior studies did not introduce control variables.

Oil price and the development of financial intermediation in developing oil-exporting countries: Evidence from Nigeria

AbstractThis study examines the relationship between crude oil price and financial sector intermediary development in Nigeria over the period 1975–2011, using the autoregressive distributed lag approach to cointegration analysis. Four measures of financial intermediary development are used including an index of financial intermediary development constructed from three indicators of financial intermediary development using principal component analysis. The results show that crude oil price is a key driver of financial intermediary development in Nigeria. A positive and significant long run relationship between financial intermediary development and crude oil price coexists with a negative short run relationship. The results show that even if we control for economic growth, inflation and trade openness, crude oil price still has significant influence on the development of financial intermediation in Nigeria. The findings of this study have important policy implications for financial intermediary development...