Investment Gap Research Articles

EU Global Health Strategy: Better health for all

The European Commission (EC) adopted a new EU Global Health Strategy in November 2022. The goal is advancing global health through policies tackling key challenges. The ongoing impact of climate change, biodiversity and pollution on global health and the interconnected and borderless nature of health are foundational concepts for the Strategy. There is also a focus on digitisation and research opportunities. Three priorities for the strategy are better health and wellbeing, strengthened health systems and combating health threats through a One Health approach. These will be achieved by following 20 guiding principles between now and 2030. The Strategy is part of Global Gateway, which seeks to reduce the global investment gap worldwide. The EU is collaborating with the United Nations (UN) and the World Health Organization (WHO) to tackle global health issues and improve prevention, preparedness and response via the EU Global Health Strategy. The Strategy will replace the EC’s 2010 Communication on the EUâ–™s role in global health and comes with important updates, such as a focus on climate change, environmental degradation, humanitarian crises and food insecurity and their negative impacts on health. Antimicrobial resistance, mental health and challenges in the health and care systems landscape will also be confronted by harnessing research and digitisation, including artificial intelligence (AI), to enhance new opportunities. The emphasis on a One Health approach will enhance access to vaccines, improve global disease surveillance and strengthen global collaboration on health issues, with numerous stakeholders pledging political commitment and shared responsibility to achieving goals.

The Gender Investment Gap over the Life Cycle

Abstract Single women invest less in risky assets than do single men. This paper analyzes the determinants of the “gender investment gap” based on a structural life-cycle framework. The model can rationalize the gender investment gap without gender heterogeneity in preferences. Rather, lower deterministic income and larger household sizes shift the composition of single women toward poorer households that invest less risky (composition effect). Additionally, future outcomes of both variables (which cannot easily be controlled for in regressions) make single women more vulnerable to financial shocks and decrease their optimal equity share even conditional on state variables (policy effect). (JEL E21, G11, G50, J16)

The Bucharest Nine Part of NATO's Eastern Flank: an Analysis of Military Investment on Equipment

An important part of NATO's deterrence and defence role is its military presence in the eastern part of the Alliance's territory, represented by the Bucharest Nine (B9). The ability of this group to fulfil its strategic mission depends on the condition of the military equipment at its disposal. The number of pieces of military equipment and their combat capability are determined by the investment in military equipment. In the context of the pledge to spend at least 20 % of total defence expenditure on military equipment, it appears that between 2004 and 2022 there is a steep increase of defence investment gap, followed by a partial absorption of the investment gap after 2014. The investment gap is reflected in the volume and condition of military equipment. Rising spending in recent years is positively reflected in the increasing volume of acquisitions for new military equipment in all B9 countries. However, due to the delay, these investments are and will only be reflected in defence capabilities in the future.

The unmet demand of food security in East Africa: review of the triple challenges of climate change, economic crises, and conflicts

East Africa struggles with a profound challenge in ensuring food security amidst the convergence of climate change, economic crises, and conflicts. This paper presents a comprehensive review of the interconnected and compounding effects of these three factors on the region’s food security landscape. It investigates the complex ways in which shifting climatic patterns disrupt agricultural systems, exacerbating food scarcity and amplifying vulnerabilities among marginalized communities. The study also examines the intertwined impact of economic downturns, which diminish access to resources, disrupt supply chains, and deepen food insecurity. Furthermore, the paper scrutinizes the ramifications of persistent conflicts, which not only displace populations but also destabilize agricultural production, aggravating food shortages. To achieve the objective of this, review the authors have collected the relevant documents through search engines of Web of Science, Google, Google Scholar, Scopus, and Science Direct databases. This review found that climate change, economic instability, and conflict are the primary challenges to food security in East Africa. Climate change exacerbates extreme weather events, rising temperatures, and pest infestations, reducing agricultural productivity and economic growth. Economic instability stems from a lack of industrialization, dependence on foreign aid, and significant investment gaps, resulting in persistent poverty and underdevelopment. Additionally, conflict and instability disrupt agricultural activities, displace populations, and restrict access to essential resources, further aggravating food insecurity. The study emphasizes the necessity for coordinated efforts among governments, international organizations, and local communities to navigate these intersecting crises and establish sustainable pathways toward enhanced food security in the region.

Infrastructure Investment and Finance in the Global South: Private Participation and Its Determinants

While the public sector is traditionally the sole provider for much of infrastructure, the pendulum is shifting in light of the enormous investment gap. Across the Global South, public utilities and planning agencies are engaging with the private sector to help bridge the gap. What are the key patterns of private participation in infrastructure (PPI) across countries in the Global South? What macro factors underscore such private participation? These research questions motivate this paper, focusing on five infrastructure sectors across the Global South and its regions. Following a historical synthesis of the changing balance of public and private provision, the paper outlines recent patterns of PPI. Drawing from a World Bank database, a regression analysis includes key macro-level predictors for private sector financing, for both the number of projects and stock of investment. Key results point to the importance of market size and in turn the potential for risk diversification, as well as a set of governance factors underlining investor confidence and stable environment.

Climate Change, Human Rights, and Private Capital: The Obligation of States to Close the Climate Investment Gap

Abstract Climate change affects humanity in many ways, such as rising sea levels, water shortages, agricultural droughts, and the displacement of people. Thus, climate change threatens the enjoyment of human rights. States must therefore put in place effective mitigation and adaptation measures to combat climate change. But since no public budget can finance those transformation efforts, combatting climate change requires large sums of private capital. However, the international community has identified a multi-trillion dollar ‘climate investment gap’. Against this backdrop, the present contribution argues that international human rights obligations call on states to urgently redirect private investment flows into climate mitigation and adaptation measures. The existence of such an obligation and its impact on concrete policy decisions is then illustrated by three practical examples: the announced withdrawal of European states from the Energy Charter Treaty, Austria’s windfall tax on energy profits, and the US Inflation Reduction Act.

Sovereign climate bonds: Policy innovation for just transitions in developing countries

This paper proposes sovereign climate-aligned bonds (SCBs) as an innovation that could mobilise climate investment towards developing countries. The research focuses on identifying the mechanisms underlying the issuance of SCBs in developing countries to unlock climate investment from capital markets and what they imply for facilitating just transitions. The research bridges scholarship across three fields: policy innovation, climate finance and just transitions, undertaking semi-structured interviews in two samples: SCB direct managers and intermediary and expert organisations. Drawing on Seychelles’s blue bond and Indonesia’s green sukuk as case studies, the research found that gaps in the public budgets of both countries were the main triggers for issuing SCBs and internationally, the influence of international organisations (World Bank and UNDP). Domestically, national wealth, access to international markets, alignment of the instruments' characteristics with political agendas and compatibility with regulations were key factors. SCB benefits, such as capital mobilisation, new investors and transparency, were perceived to outweigh additionality concerns or reputational risks (though higher transaction costs compared with non-green issuances remained a consideration). SCBs may be used as political statements in support of climate agendas, surpassing the perceived benefits of the mobilised capital. A legacy of exclusive dynamics in private markets remains a structural barrier for SCBs to be transformational in addressing climate change. Risk-return rationales and the exclusion of climate from countries’ risk profiling place developing countries in a more challenging position. While these instruments may not be sufficient to close the climate investment gap, they have an important role to play.

Quality Infrastructure and Sustainable Development: An Empirical Economic Analysis

Sustainable development is one of the most important goals set by many countries worldwide. The United Nations (UN) has prioritized it as a significant objective within the Sustainable Development Goals (SDGs) program. Sustainable development implies economic growth that benefits both present and future generations without compromising their well-being. Some analysts argue that sustainable infrastructure may be more advantageous when evaluated based on private cost-benefit criteria, although comparisons are needed for clarity. One challenge in testing this hypothesis is the lack of a clear measurable distinction between sustainable and non-sustainable infrastructure at the national or global level. In this study, we utilize two quality infrastructure indices to quantify the extent of sustainable infrastructure. These measures are then applied to a sample of countries to test hypotheses regarding the effect of per capita Gross Domestic Product (GDP) and population on a country’s investment in quality infrastructure. The findings support the hypotheses that per capita GDP and population have a nonlinear effect on quality infrastructure, with both variables having a positive effect, albeit at a decreasing rate. At certain higher levels of per capita GDP or population, the effect turns negative. The policy implications for national governments and international organizations are also discussed, highlighting the need for tailored strategies to promote sustainable infrastructure development without undermining other much needed priorities such as eradicating extreme poverty. Keywords: development, sustainability, per capita GDP, population, quality infrastructure, marginal effects, elasticity, investment gaps

Farmers' preferences for sustainable farmland construction — Insights from a discrete choice experiment in China

Sustainable farmland construction (SFC) is a priority development strategy used to address the integrated goals of “efficiency output, resource conservation, and environmental friendliness” in agricultural systems. Introducing farmer participation to optimize SFC institutions can improve farmland construction efficiency and address limited construction funding. This study analyzed farmer preferences for participating in SFC through a discrete choice experiment survey of farmers in the project area. This study also evaluated farmers' willingness to pay for different SFC schemes. The findings indicate that farmers prefer constructing mechanized production roads (MPR), leveling farmland and transforming the contiguous farmland (LF and CF), integrated irrigation and fertilizer facilities (IIFF), and moderate improvement in ecological protection facilities. On the basis of the heterogeneity of the farmer preferences, they can be classified as benefits-driven and ecology-driven. In addition, factors such as age, educational level, risk proneness, land transfer, and cultivated land quality can influence the classification of farmer preferences. Farmers' willingness to pay for MPR, LF and CF, ED, IIFF, and moderate improvement in ecological facilities has reached 50–80 % of construction costs, essentially bridging the investment gap under the SF standards set by the central government. Based on the aforementioned, SFC schemes should be designed to consider farmers' needs and regional development requirements. Allocating SF construction costs according to farmers' willingness to pay for various facilities, formulating diverse investment ratios, and forming a coherent government-farmer cooperation mode are recommended. This study introduces policy tools to establish a farmers' participation mechanism in farmland construction, offering valuable insights into institutional reforms in land consolidation projects across other developing countries.

Bond Market Development and Infrastructure Investment Gap: Lessons for the African Continent

This paper, seeks to draw lessons for the African continent based on the experiences of three pioneer countries in bonds issuance for infrastructure financing. Theoretical foundation: The preferred habitat theory served as the study's lenses.it focuses on the bond market participants' choices for bonds as a financing option. Methodology: The authors conducted a systematic review of the literature using the SALSA framework, which is a search, appraisal, synthesis, and analysis framework. Findings; There is a pressing demand for bond market development in Africa. Developed and developing economies widely utilize bonds to bridge worldwide infrastructure investment gaps. Whereas some African nations have embraced them, there is still a lot to be done. Amongst others, is the need to familiarize with the various bonds available as a financing tool for infrastructure, the contribution of bond markets globally, the motivation for various bond market participants not disregarding the bond market processes and enablers. Practicability: This study solely employed a secondary literature analysis; other researchers can do the same investigation using different methods like the qualitative techniques that entail interviews or quantitative approaches. It also highlighted the bond processes and enablers based on the experiences of three countries that pioneered bond issuance. Further research can look at more or different countries for drawing lessons. Originality; This is the first article to present an overview of bonds, bond market participants, processes and enablers. As well as, the first paper to draw lessons for African countries based on the first-time experiences of Senegal, South Africa and United states of America.

A STUDY ON THE EXAMINATION OF GENDER EQUITY AND FEMALE PARTICIPATION IN SPORTS

The purpose of this paper is to explore the history that surrounds the issues of gender equity in sport, what actions have been taken to provide equal opportunity for women in sports, the current issues facing women in sports today, the research surrounding the issues pertaining to gender equity in sport, and also to discuss the findings and present recommendations for further research in this area.Undertake to close the gap in investment in women's sport and promote equal economic opportunities for women and girls. Promote women's equal participation and bias free representation in the media. Provide equal opportunities for girls in sports, physical activity and physical education.The main aim of this research is to know about the gender equity and female participation in sports.Empirical research is used for the purpose of the study.Convenient sampling method is used to collect the samples.Samples are collected based on the ease of access or availability.The sample size of this paper is 200. Statistics used in the research are clustered bar graphs.The information was collected from secondary sources like journals,articles,books and so on. Keywords: equal opportunity, women ,sports,gender equity ,physical education.

Corporate Social Responsibility: Impact on Firm Performance for an Emerging Economy

Corporate Social Responsibility (CSR) was usually referred to as a concept where companies initiate voluntary action towards social and environmental concerns in the context of business operations related to the stakeholders of the company prior to the CSR Act 2013 in India. Post-2013, the voluntary initiative was replaced by regulatory guidelines to address social and environmental concerns. The CSR applicability–investment gap was used as a base concept in this study with instrumental theory; the study offers a strategic perspective of CSR and how organizations emphasized maximizing stakeholders’ value. In order to further investigate the effect of CSR on corporate financial performance (CFP) through the measure of shareholders’ value, i.e., the return on equity (ROE), the study used the sample from the National Stock Exchange (NSE)-Nifty-100 indexed companies of Emerging Economy—India for a span of fourteen years (2009–2023). The vast majority of research in this domain is conducted in developed countries; the research gap is filled by this study by considering India and drawing samples from multiple industries. The empirical model was developed by using panel data regression, where the dependent variable was ROE, and the independent variables were earning per share (EPS), log total income (LTI), CSR applicability/profit after tax (CRSAPPPAT), and CSR investment/profit after tax (CSRIPAT). The findings also highlighted the CSR applicability and investment of the firms during pre- and post-Sustainable Development Goal (SDG) periods. The same was also analyzed for the firms committed to CSR and not committed to CSR. The results indicated that there is no significant impact of the CSR/ESG initiatives (applicability and investment) on the ROE of the firms. The performance could be better if the companies minimize the CSR/ESG promise–performance gap through effective communication with stakeholders.

Off-balance-sheet policies to the rescue: The role of statistical expertise for European public–private partnerships

Off-balance-sheet policies are an important but understudied phenomenon that emerged from a technical subtlety in the calculation of public debt statistics. Taking the case of an exemplary European off-balance-sheet policy, public–private partnerships (PPPs), this paper analyzes the technocratic processes that allow the emergence of such debt-neutral instruments. In the aftermath of the sovereign debt crisis, off-balance-sheet policies have become an important policy tool for Member States in the European Economic and Monetary Union, enabling them to strike a balance between the perceived ‘public investment gap’ and the mantra of fiscal consolidation. The case study shows how the lack of political solutions to Europe’s investment-consolidation conundrum leaves it to technical experts to find workable solutions within the existing rules. The off-balance-sheet status of PPPs came under threat in 2014 but was reaffirmed through a coordinated effort by two strange bedfellows: the European Investment Bank (EIB), a promoter of PPPs, and Eurostat, the European authority responsible for public debt and deficit indicators. I argue that Eurostat and the EIB have entered into strategic cooperation to increase each other’s room for manoeuvre, diffuse political pressure and avoid bureaucratic overload. This paper contributes to a better understanding of the role of technocrats and their expertise, which shape the mutual relations between fiscal constraints and financialized investment policies in the European investor states.

Private sector participation in infrastructure in emerging market and developing economies: Evolution, constraints, and policies

AbstractThe private sector can play important roles in closing the infrastructure investment gaps in emerging market and developing economies. However, private participation in emerging market and developing economies' infrastructure has declined over the past decade, reflecting persistent structural challenges and risks in the business environment. The decline was broad‐based and gained momentum following the 2013 taper tantrum and the end of the commodity super cycle. Incentivizing greater private sector participation in infrastructure will require policies to improve access to long‐term finance and to derisk the business environment. This will require efforts to strengthen the banking sector regulation and supervision, to improve the legal and contractual environment, and to limit information asymmetries. Deepening local financial and bond markets can make it possible for infrastructure bonds to be issued in local currencies and minimize potential currency mismatches. Improvements in the broader business environment can benefit from greater macroeconomic stability and stronger institutional frameworks. Policies that improve the quality of projects at entry, address currency risk, relax capital controls, and enable cost recovery pricing can unlock private sector participation in infrastructure financing. Strong government support, including ensuring regulatory quality, and providing well‐targeted guarantees and subsidies, can play a critical role.

The Influence of Infrastructure Financing on Rural Municipalities in Limpopo Province, South Africa: Issue for Consideration

Infrastructure financing in an important source of funding for rural municipalities. The introduction of private financing in the South African region is a significant paradigm from which the rural municipalities pursue infrastructure investments. However, rural municipalities find it increasingly complicated to secure infrastructure funding from the private sector. Infrastructure financing constraints, including those exacerbated by economic, educational, social and political factors, are some of the many accelerating challenges facing rural municipalities in the Limpopo Province, South Africa. This analysis aims to identify and investigate the root cause of the lack of infrastructure financing and the challenges related to infrastructure financing at rural municipalities in South Africa. The challenge is to design ways to manage these constraints with infrastructure development effectively. Rural municipalities in South Africa face a significant infrastructure finance and investment gap. The study adopted a conceptual approach to analyse the effects of infrastructure financing on rural municipalities in the Limpopo Province. A literature study revealed that some of the challenges were linked to infrastructure development and financing mechanisms. Specific constraints include issues of transparency and autonomy and key provincial transitions. This study concludes with the mechanisms that can be applied to raise external funding for infrastructure development.

Capital Market and Economic Growth in Nigeria

In spite of its expected role of bridging the saving and investment gap for economic growth, the impact of the Nigerian capital market on the growth of the economy remains unclear. This study looked at the influence of the capital market on economic growth in Nigeria between 1981 and 2022, using vector autoregressive (VAR) analysis. The variables used included: real gross domestic product (RGDP), market capitalization (MCAP), total value of securities traded (TVST), and gross fixed capital formation (GFCF). The study concluded that while RGDP and MCAP influenced their own outcome as well as the outcome of other variables positively in both the short and long run, TVST and GFCF influenced their own outcome as well as the outcome of other variables negatively in both the short and long run, using the VAR system tools of impulse response function and forecast error variance decomposition. Based on the findings of this study, we recommended among others the urgent need to boost the perception of local firms listed in the Nigerian stock exchange both locally and internationally in terms of the total value of their corporate assets and performance measured by price-to-earnings, price-to-sales and return-on-equity metrics. This can be improved upon when these firms are able to increase the quality of their products and services thereby making them better competitors in the global space.

Limitations of coordinative Europeanisation in the Just Transition Mechanism in Romania

The EU currently promotes a radical transition towards a green, digital and more inclusive economy, which for its realization relies on the European Investor State’s financial architecture. As the transition generates losers, not only winners, instruments like the Just Transition Mechanism (JTM) are designed to provide a compensatory function. However, our research shows that it might miss its mark of ‘leaving no one behind’. JTM is a fascinating extension of European Investor State as it seeks to service the losers through investments rather than compensations. Firstly, JTM mirrors the vision of the InvestEU program and doubles down on industrial transformation and strategic investments that rely substantially on private sector involvement. Secondly, as a process, the JTM requires local stakeholder coordination and national institutional capacity – both of which can pose additional challenges to newer member states without enhancing local capabilities. Thirdly, based on the process design, much like other EU programs, JTM has a level of complexity that leaves beneficiaries highly reliant on technical assistance. As such, investment gaps in the newer member states might be extended, and not compressed by the current compensatory financial tools of the EU. Using an in-depth case study method, we develop a multi-dimensional evaluation of the Just Transition process in the most affected region of the Jiu Valley in Romania. Through an original local stakeholder mapping, we find that while the local and national authorities have the highest influence in determining the Just Transition process in Romania, they are also very much distrusted by other local actors. Our findings reveal that it is not just the often-cited weakness in institutional capacity, but also that of poor stakeholder consensus that impede the strategic planning and implementation of new EU investment tools at the level of targeted beneficiaries.

The impact of the investment expectation gap on households’ risky financial asset investment

Rational household asset allocation is crucial for the accumulation of household wealth. However, there is still a widespread phenomenon of limited participation among households. This paper aims to explore the impact of the investment expectation gap on households’ risky financial asset investment. Utilizing data from the China Household Finance Survey 2019, this paper systematically investigates the role of the investment expectation gap in risky financial asset investment through the Probit and Tobit models. The study reveals that the investment expectation gap has a significant negative impact on the investment probability (Average Marginal Effect, –0.118, p < 0.01) and holding proportion (β, –0.082, p < 0.01) of household investment in risky financial assets. This conclusion remains robust after conducting robustness tests by replacing the explanatory variable and performing subsample tests and endogenous treatment. The analysis of transmission mechanisms revealed that an expanding of the investment expectation gap would concurrently result in a decline in households’ assessment of stock’s profitability (Average Marginal Effect, –0.080, p < 0.01), the satisfaction with current asset allocation (β, –0.167, p < 0.05), and the subjective well-being of household members (β, –0.289, p < 0.01). Furthermore, the investment expectation gap not only hampers household investment in risky financial asset, but also diminish the household savings rate (β, –0.055, p < 0.01). This study demonstrates that helping households form reasonable expectations for risky financial assets investment returns will contribute to diversifying household asset allocation and enhancing satisfaction with investment decisions. AcknowledgmentThis study is funded by the Chongqing Social Science Planning Fund, grant number (2021BS052).

Institutional investor behaviour and the energy transition: A complexity framework for accelerating sustainable finance from UK investors

Despite sustainable investment flows having increased significantly over the past decade for transforming the current energy system, a large investment gap remains. This research explores the complex links between institutional investors' expectations on the speed of the energy transition and their sustainability-related investment behaviours. Through in-depth semi-structured interviews with institutional investors, we construct a complex system model using a causal mapping approach, illustrating complex relationships within the sustainable investment system. Our contribution involves the development of multi-layer cognitive maps for different types of institutional investors, followed by a composite causal map that dissects key investment behaviours and investor expectations. Results reveal interlinked concepts influencing investment behaviour and highlight feedback loops with potential amplifying effects on investor expectations and investment behaviour. Two critical feedback loops emerge: 1) the interplay between political and financial support for the energy transition and the associated cost, and 2) the intricate relationship between sustainability factors and asset valuation. Addressing these interconnected issues simultaneously and monitor negative feedback loops that may curtail sustainable finance flows are vital. The results reveal heterogeneities amongst institutional investors such as fiduciary duties, stranded assets, the importance of fossil fuels in the energy system. In sum, our insights provide a foundation for holistic energy policies and a reference system for evaluating policies aimed at accelerating green finance.

The airport access gap in Latin America and the Caribbean

We estimate the investment gap in the provision of adequate levels of access to airports in Latin America and the Caribbean. Based on georeferenced data for population centers and existing airport locations, we estimate the region requires USD 10 billion in investments to close the gap for 23 million people living in localities of more than 100,000 inhabitants who currently lack sufficient access to airports offering adequate service standards within reasonable travel times. The gap is equivalent to approximately 18% of total investment in transport in Latin America in 2019, but is quite sensitive to variations in the criteria chosen to define access in terms of maximum access time and minimum population center size thresholds.