Physical Capital Investment Research Articles

Impacto del gasto público en educación sobre el crecimiento económico en la región macro sur del Perú durante el periodo 2003-2021

The present research work aims to determine the impact of public spending on education on economic growth in the southern macro region of Peru during the period 2003 to 2021, covering the regions of Puno, Tacna, Arequipa, Moquegua, Apurímac, Cusco and Madre de Dios. The data used come from the statistical area of the Ministry of Economy and Finance, the National Institute of Statistics and Informatics and the Educational Quality Statistics of the Ministry of Education. The methodological approach adopted is hypothetical-deductive, non-experimental with a panel-type design; the estimation of the model was carried out using the Generalized Least Squares Feasible panel data technique which reveals significant quantitative relationships between the analysis variables. In general terms, the main findings indicate that a 1 % increase in public educational spending correlates with a 0.12 % increase in economic growth. Furthermore, when breaking down the impact of public spending by different levels of initial education - primary, secondary and higher - a 1 % increase generates an increase of 0.13 %, 0.14 % and 0.069 % respectively on economic growth. Furthermore, it is highlighted that investment in physical capital has a positive effect on economic growth. In conclusion, total public spending on education and spending by educational levels exhibit a positive and significant impact on economic growth, highlighting the strategic importance of government investment in education as a fundamental catalyst for economic growth.

R&D investment: A dynamic efficiency approach in the EU countries

This paper aims to analyze the role of research and development (R&D) in the production efficiency of European Union Member States. Utilizing Bayesian methods within a dynamic framework, the study jointly estimates production functions and efficiency for a sample of 27 countries over the 2000–2021 period. The findings reveal that human capital investment exhibits a higher output elasticity compared to physical capital investment. Additionally, the results indicate that inefficiencies persist due to escalating costs—both monetary and temporal—as inputs expand. Across the studied countries, an upward trend in R&D expenditure is associated with increasing technical efficiency levels, establishing a positive relationship between R&D spending and technical efficiency scores. Geographically, eastern and southern European regions exhibit lower average efficiency levels. These insights are crucial for policymakers seeking to foster innovation-driven policies, highlighting the importance of maintaining or increasing R&D spending to achieve the economic and social objectives of the European Union. Through appropriate R&D policies, policymakers can enhance technical efficiency, ensure the EU's global competitiveness, and promote more equitable development across the Union.

The Effect of Efficiency and Cost Changes in Labor Factor on Physical Capital Investments: Dynamic Panel Data Analysis

The Effect of Efficiency and Cost Changes in Labor Factor on Physical Capital Investments: Dynamic Panel Data Analysis

An investigation into the convergence of economic growth among Indian States and the path ahead

This study offers a comprehensive examination of economic growth and convergence in the Indian States and Union Territories (U.T.) over the period from 1991 to 2020. It investigates absolute, sigma, and conditional convergence within this diverse set of states and utilizes the augmented Solow and extended Solow models to explore conditional convergence dynamics. The empirical findings reveal several significant insights. First, there is no substantial negative correlation between the initial per capita GDP ratio and the average annual growth rate, indicating the absence of absolute convergence across the Indian States and U.T. economies during the study period. These results align with those obtained from sigma convergence analysis, reinforcing the absence of widespread convergence. However, conditional convergence is observed, as evidenced by the rate of conditional convergence (coefficient of initial GDP per capita) estimated at 0.038 among the Indian States and U.T. The presence of conditional convergence implies that while initial conditions matter, other factors, including physical and human capital, population growth, and additional variables, significantly contribute to the growth and convergence of Indian regions. The study concludes that policies aimed at promoting economic growth in the Indian States should prioritize the expansion of the labor force, investments in physical and human capital, and prudent government consumption. Furthermore, fostering an environment that encourages access to new technologies and ideas, maintaining sound macroeconomic management, and increasing investments in human capital formation are essential for sustained growth. Effective resource allocation through prudent budgetary policies and heightened investments in the health sector are recommended. Incentives to reduce fertility rates and adept monetary policy management are also identified as crucial elements for ensuring stability and sustainable growth. In summary, this research underscores the importance of adopting a holistic approach to foster economic growth and convergence in the Indian States. The suggested policy measures create a conducive environment for sustained development and prosperity in this diverse and dynamic region.

Reducing carbon emissions at the expense of firm physical capital investments and growing financialization? Impacts of carbon trading policy from a regression discontinuity design

This study examines the effects of China's carbon trading policy on firm emissions and explores its impact mechanisms through financial and physical asset investments. The empirical analysis utilizes a fuzzy regression discontinuity design based on a sample of 427 industrial firms in China between 2014 and 2019. The results indicate that China's carbon trading policy incentivized firms to increase their financial investments while simultaneously discouraging physical capital investments. These shifts in investment patterns helped firms achieve their emission reduction targets. The study reveals that carbon trading policy in China has contributed to the financialization of firms, resulting in the erosion of firm assets and a decline in their overall competitiveness. Based on these findings, some policy recommendations are put forward.

Neophodan nivo investicija za ubrzani privredni rast - stilizovane činjenice i politike

To close the gap in economic development relative to the EU average, Serbian economy has to achieve significantly higher growth rates in comparison to other European countries over the longer period. Theoretical and empirical literature indicates that the level of investment in physical capital is one of the key determinants of the dynamics of economic growth. In this paper, based on data on investments and savings in Serbia and in 37 countries that in the previous three decades achieved an average GDP growth rate of over 5% per year (so-called fast-growing economies - FGE), we present and analyze relevant stylized facts. In the observed period, FGE had average total investments of 25.6% of GDP, of which 69% was private and 31% public investments, whereby private investments were predominantly domestic, which is associated with a high rate of gross domestic savings (of 27.4% of GDP). On the other hand, total investments in Serbia were 9.7% of GDP lower than the FGE average, which was a consequence of significantly lower public and domestic private investments, which was, among other things, a consequence of significantly lower domestic savings (by over 20% of GDP). As in the recent period there has been a noticeable increase in public investments in Serbia, in order to accelerate economic growth, it is necessary, in addition to maintaining them at a high level, to encourage a considerable increase in domestic private investments through economic measures policy and wider reforms of the general institutional environment, with the aim of having the total level of investments of over 25% of GDP over the next few decades.

Африка южнее Сахары: тренды, пропорции и факторы развития

The author’s calculations and models show that although the countries of Sub-Saharan Africa (SSA) suffered greatly as a result of the plunder of their human and natural resources by the countries of the West during the period of colonial oppression and the centuries-old era of the slave trade, they have managed – after they gained political independence – to achieve on the whole a number of positive socio-economic results. The gross fixed capital formation (GFCF) as a percentage of GDP has doubled, the average number of years of education of the adult population has increased six times, the average life expectancy at birth has augmented by one and a half times, and the human development index has risen by 2.5 times. However, since SSA countries are growing on average slowly and unsteadily, the gap between SSA and the advanced economies as well as many Asian developing countries (ADCs) by levels of development has enlarged significantly, and the total number of poor people in SSA has more than tripled over the past forty years, reaching 1 billion people. Besides the demographic dividend coefficient that is almost twice as low as in ADCs, the low dynamics of per capita GDP growth in SSA, according to our model, is associated by 1/3, 1/4 and 1/10, respectively, with the low rate of GFCF, low growth rates of exports (mainly raw materials), low level of social institutions. Since the assistance of the countries of the West is small and decreasing, and the capacity of markets in SSA countries is low, in order to avoid worsening the situation, they need to (a) increase the share of investments in physical and human capital in GDP at least one and a half times (including by reducing unproductive use of resources), (b) more actively develop intra-African cooperation and foreign economic relations with other developing countries and the Russian Federation, (c) rely on export-oriented industrialization (as SSA lags the most – 3–4 times – behind ADCs in terms of output growth rates of manufacturing industry).

RELATIONSHIP BETWEEN UNEMPLOYMENT AND INFLATION: IMPACT OF UNEMPLOYMENT AND INFLATION ON INDIA'S ECONOMIC GROWTH

Unemployment is a significant issue in modern India, as it is in many other countries around the world. The issue of joblessness in India is explored in this paper. This studys information is secondary data collected between 2010 and 2020. Unemployment (UNEMP) serves as the dependent variable, with Gross Domestic Product (MKTP) and Inflation (INF) serving as the independent variables. The findings show that due to increased uncertainty, inflation significantly negatively impacts economic performance in India. The use of a log of real GDP, the nature of the regression model applied, and the fact that the impact of human capital and physical capital has been controlled explain why unemployment has not significantly affected Indias real GDP. Indias economic performance has been dramatically boosted by the countrys physical and human capital investments. Human capital investment boosts labour force productivity, which in turn boosts output. In contrast, physical capital investment increases the amount of capital per unit of labour, which in turn can boost productivity per worker. As a result, productivity rises and the economy benefits. The leading causes of unemployment are the rapid increase in the worlds population, the dearth of available jobs, and the inefficiency of the public sector. Through its strategies and resources, the Indian government may seek to attract foreign investors to facilitate the modernization of Indias agriculture sector and the creation of new jobs in the private sector. KEYWORDS: GDP (MKTP), Inflation, Unemployment, Regression Analysis, Descriptive Statistics

Navigating the Intricate Relationship between Investments and Global Output: A Leontief Matrix Case Study of Romania

This research delves into the intricate dynamics underlying the impact of investments on global output, employing the Leontief matrix as a robust analytical framework. Investments wield a profound influence on economies worldwide, with varying effects contingent upon investment types, development levels of countries, and external factors such as trade conflicts and global shocks. The diverse range of investment forms, including physical capital, human capital, R&D, and technological investments, engenders distinct implications for productivity, innovation, and efficiency. Developing and developed economies navigate unique trajectories, with investments playing a pivotal role in bridging infrastructure gaps, improving technology, and spurring growth. However, external disruptions, such as trade wars and global shocks, introduce an element of complexity, reshaping investment patterns and altering global output trajectories. This study centers on harnessing the Leontief matrix’s prowess to evaluate the interplay of investments and global output, focusing on the Romanian economy. By analyzing input–output tables, encompassing 105 branches aggregated into 10 sectors, the research captures the intricate connections between economic segments. Notably, the Romanian context reveals the volatility of the matrix coefficients, an outcome of ongoing transitional processes, technological advancements, and fluctuating relative prices. In unraveling the intricate threads weaving investments and global output, this study contributes to a nuanced comprehension of these multifaceted interactions. The findings underscore the significance of tailoring investment strategies to specific economic contexts and advocate for robust frameworks, such as the input–output model, to inform policy decisions and drive sustainable growth in an increasingly complex global economy.

An Analysis of the Effects of Spatial Dependence on Economic Growth Among Regencies and Cities in Java

Java is inarguably essential for Indonesia’s economy with its 59% contribution to the country’s GDP. However, behind the tremendous participation lies high regional disparity, poverty, and unemployment, which have become challenges to its economic development. This research aims to analyze the role of spatial dependence on regional economic growth in 119 regencies and cities in Java during the 2015- 2019 period. Exploratory Spatial Data Analysis (ESDA) and Spatial Durbin Model (SDM) were used to analyze the determinants of the spatial dependence and its impact on regional economic growth. The travel time among regions was utilized for the spatial weight matrix. The existence of spatial dependence in inter-regional economic growth can be identified from all models. The positive value of Moran’s I in the ESDA analysis indicates that the spatial pattern of the growth is clustering. The lambda parameter in the SDM estimation indicates the occurrence of backwash spillover in the effect of the spatial dependence on economic growth. The direct effects of initial per capita income, physical capital investment, road infrastructure, population growth, and education are significant on economic growth. Furthermore, the spillover effect of initial per capita income and education is also significant on the inter-regional economic growth.

Abundance of natural resources, government scale and green economic growth: An empirical study on urban resource curse

Based on panel data of Chinese cities in 2000–2020, this study analyzed the impact of natural resources abundance on green economic growth at the urban level, and also examined the mediated effect of government scale. The findings of the study reveal that: The “resource curse” phenomenon in China's various cities is significant. The relationship between environmental regulation intensity and green economic growth presented as “U-shaped curve”. The impeding effect of industrial structure, as well as the promoting effect of factors such as economic openness level, technical innovation and physical capital investment on the development of green economy were significant. However, the marketization level and education level did not show significant impact on green economic growth. Natural resources abundance can produce “curse” effect on green economic growth by promoting the expansion of government expenditure scale and government personnel scale. Government institutional reform policies can effectively alleviate the “resource curse” phenomenon in various cities. Therefore, this study argued that optimizing the government internal expenditure structure, reshaping the political incentive structure and reducing administrative regulations in the natural resources industries were effective ways to optimize the government expenditure scale and alleviate the urban “resource curse”. Scientifically determining the government personnel scale, reducing the scope and intensity of government intervention, and fully leveraging the public's social supervision function were effective ways to optimize the government personnel scale and alleviate the “Resource curse” of cities.

Employment protection and labour productivity growth in the EU: skill-specific effects during and after the Great Recession

Does employment protection affect sectoral productivity growth differently during crises and recovery periods? This paper sheds light into this question by investigating the relationship between employment protection legislation (EPL hereafter) and sectoral labour productivity growth in the EU in the context of the Great Recession. We consider the crisis and recovery periods, evaluate the relevance of both levels and changes in EPL for productivity growth, and explore the conditioning role played by sectoral differences in terms of cumulativeness of knowledge as well as the skills of the labour force, captured by different levels of education. We find that stricter labour protection reduces labour productivity growth in sectors with a large share of workers with tertiary education, whereas this effect is negligible or positive in sectors where workers with secondary or only primary education are more prevalent (such as agriculture, mining and quarrying). We attribute this to a more intensive labour hoarding in the former, as EPL strengthens labour hoarding in sectors that rely on firm-specific knowledge accumulation and skilled human capital that are difficult to substitute with physical capital. Whereas it is simple to dismiss (and to find later) unskilled employees. They not only can be substituted more easily with capital, but also the costs of their firing are lower, they are overrepresented among workers holding temporary contracts, and they might be unequally informed and able to exercise their rights. This leads to low (if any) labour hoarding and little impact of EPL on labour productivity in such sectors. We also document that the negative effect is prominent only during the crisis, and an increase in the stringency of EPL over an extended period stimulates employers to substitute labour with investments in physical and knowledge capital.

Capital accumulation and sustainable development in developing economies; role of natural resources development

In the realm of economic development, the intricate interplay among capital accumulation, sustainable growth, and natural resource utilization has gained notable attention. This study delves into the connection between capital accumulation and sustainable development in developing economies, specifically highlighting the role of natural resource development. Employing the PVAR (Panel Vector Autoregression) model, data from 124 countries spanning 1980 to 2018 is analyzed. By examining the dynamic interactions between capital accumulation, natural resource development, and sustainable indicators, this research offers insights into their influences within developing economies. First, a positive correlation is found between increased capital accumulation and enhanced sustainable development indicators, emphasizing the impact of investments in physical and human capital. Second, the study underscores the intricate relationship between natural resource development and sustainable progress, revealing diverse impacts across nations. These findings have crucial implications for policymakers and researchers striving for balanced development while preserving natural resources for future generations.

The Impact of Investments in Physical Capital, Labor, and Knowledge Capital on Enterprise Market Value: Estimation and Optimization

This study analyzes the market value of listed companies in Mainland China across different industries, including capital-intensive, labor-intensive, technology-intensive, and other industries. A generalized neoclassical investment model that considers physical capital, labor, and knowledge capital as input variables is built to theoretically decompose firm value. The empirical results indicate that knowledge capital accounts for an increasing proportion of the market value of companies, rising sharply from 21.5% in 2009 to 37.9% in 2018. In contrast, the share of labor in enterprise market value has been decreasing year by year, dropping from 56.5% in 2009 to 36.4% in 2018. The share of physical capital in enterprise market value remains relatively stable. Based on these findings, the study simulates the optimal investment behaviors and their influence on the firm value of various types of enterprises, providing valuable insights for investment decision-making for managers in different industries.

İnsan Hakları Ekonomik Büyümeyi Artırır mı? Gelişmekte Olan Ülkelerden Panel Kanıt

This study attempts to examine the impact of human rights and economic growth by utilizing two measures of economic growth for developing countries and an unbalanced data spanning from 1961-2017. The hypothesis of the study asserts that improvement in human right protection score increases economic growth in an economy. Firstly I conducted panel unit root test to see if the variables are stationary. After verifying the stationarity of variables at levels (i.e., I(0)) based on panel unit root tests, empirical estimations were conducted without the fear of potential spurious regression problem. According to the estimation results, in parallel to prior expectations, positive statistically significant effect on economic growth was identified for the variables of human right protection, physical capital investment, education investment, openness whereas negative statistically significant effect on economic growth was identified for the variable of inflation in all models estimated. Estimation results indicate that countries trying to reach to higher economic growth, besides the other determinants of economic growth, must pay attention to human right protection and implement policies that prioritizing human right protection.

How much do public and private sectors invest in physical and human capital? Towards a new classification of investments

Conventional wisdom says that today's investment drives future economic growth. Recent research shows that returns on human capital investment can be higher than those on physical capital investment. Yet, national accounts classify human capital expenditures as consumption and only investment in physical capital is recognized as investment. We propose new classification methodology and apply it to the data on public and private expenditures in 28 EU countries. We find that human capital investment constitutes on average 11.1% of GDP, of which 8.8 p.p. come from public sector. Physical capital investment constitutes on average 20.6% of GDP, of which 17.6 p. p. come from private sector. Understanding investment in narrow sense may lead to excessive concentration on the expansion of physical capital at the expense of otherwise profitable human capital spending.

Typology of Irrigation Technology Adopters in Oil Palm Production: A Categorical Principal Components and Fuzzy Logic Approach

Oil palm is the second most cultivated oilseed crop in the world after soybeans, with more than 23 million hectares cultivated worldwide; it has become crucial for the economy of many countries. In Colombia, it is one of the most developed agricultural sectors, and every year the sector promotes the development of technologies that lead to greater sustainability of agricultural and food systems and address the challenges and opportunities of agribusiness. In this research, the central focus was the adoption of irrigation technologies, which is limited despite significant efforts and investments in physical and human capital. On many occasions, the typology of farmers has been associated with low technology implementation. Thus, linking the typology of farmers according to certain commonalities or differences is an essential step in exploring the factors that explain the adoption. In addition, the ranking also helps in the understanding of existing adoption constraints, as well as finding opportunities for change. This study aimed to determine the socioeconomic and demographic typology of those who adopt irrigation technologies. The analysis was performed using categorical principal component analysis to reduce dimensionality and fuzzy cluster analysis to classify the groups. As a result, four groups of producers that differ in terms of their demographic and socioeconomic characteristics were obtained, where the groups “population with female leadership” and “diversified population” were the adopters of irrigation technologies. The most outstanding characteristics of these two groups were the profitability of the harvest and the age of the producers. Determining the typology of farmers is a fundamental step in expanding the technology adoption process through agricultural extension services, which represent a way of reaching producers directly. In addition, these results allow decision makers to participate in this dynamic reflectively and intentionally (such as governments, researchers, and technology transferors).

A Structural Empirical Model of R&D, Firm Heterogeneity, and Industry Evolution*

This article develops and estimates an industry equilibrium model of the Korean electric motor industry from 1991 to 1996. Plant‐level decisions on R&D, physical capital investment, entry, and exit are integrated in a dynamic setting with knowledge spillovers. We apply the novel approximation of oblivious equilibrium to estimate the R&D cost, magnitude of knowledge spillovers, adjustment costs of physical investment, and plant scrap value distribution. Knowledge spillovers are essential to explaining the firm‐level productivity evolution and the equilibrium market configuration. A R&D subsidy maximizes industry output and is broadly consistent with a past policy initiative of the Korean government.

An assessment of the capacity and the performance of marine services in South Africa’s ports

Background: With about 80% of world trade being seaborne, seaports’ capacity, efficiency and associated services are vital to ensure seamless, sustainable global supply chains. A lack of investment in marine services capacity and performance in South African ports remains a concern for port users and supply chain practitioners.Objectives: This study examines the capacity and performance of marine services in South Africa’s ports. The primary example examines marine services performance data for the Port of Durban.Method: This study uses Transnet National Ports Authority (TNPA) data and descriptive statistics to analyse marine fleet performance, bollard pulls and human capacity in South Africa’s ports to identify causes of shipping delays in the Port of Durban from 2014 to 2021.Results: The 8 years analysis show five most prominent sources of shipping delays in Ports as; tugboats occupied, shift changes, shipping movements, tugs out of commission and adverse weather conditions. Other factors identified were pilot-boat availability, overbooking slots, port meetings, etc. The performance of marine services are impacted by outdated wet infrastructure and a shortage of marine crafts and critical skills.Conclusion: There is a clear and justified need to increase physical and human capital investment in the provision of marine services and improve maintenance spending on critical infrastructure to reduce shipping delays and costs of conducting trade in South African (SA) ports.Contribution: The study compiles, analyses and provides a contextual understanding of the number of marine crafts, average bollard pulls, human resources capacity and causes of shipping delays in Republic of South Africa (RSA) ports.

Open doors: The impact of border reforming and opening policies on the regional border economies of China

AbstractThe openness and security of a country's borders is a matter of concern for countries worldwide. Since its reform and opening up in 1978, China has implemented reforming and opening policies in border regions, as represented by the “Xingbian Fumin Xingdong” (Revitalize Border Areas and Enrich Residents' Lives Policy [RBAERL Policy]) to achieve economic prosperity and stability. This study evaluated the impacts of the RBAERL policy in terms of outcomes related to county‐level economic growth in China's border regions. Using China's county‐level panel data from 1999 to 2016, we applied a spatial discontinuity design with the geographical boundary serving as the running variable. We found that the RBAERL policy contributed significantly to the economic growth of the border counties. These results were shown to be robust when measured against a series of test procedures. Through a by‐segment analysis of the border regions, we found that the policy had the strongest effect in northeastern China. Further mechanism analysis showed that the effect of per capita GDP growth primarily resulted from the expansion of the industrial sector along with physical and human capital investment rather than the promotion of employment and the growth of total factor productivity. The findings of this study can provide references for the importance of open borders for economic development and national security.