Developed Economies Research Articles

Threatening the Poor? The economic impacts of carbon border adjustment mechanism on developing countries

It is highly necessary to conduct a more detailed assessment of the economic impacts caused by the Carbon Border Adjustment Mechanism (CBAM), especially for numerous developing countries. This study utilizes the input-output (IO) model to evaluate the inequality consequence of CBAM. Results indicate that 1) the overall impact of output decline and production cost increase on non-OECD countries is greater than that on OECD countries; 2) regionally, African countries experience a more severe output decline, while Asian countries see a higher increase in production costs. Apart from BRICS, other developing countries demonstrate low reduction efficiency; 3) a refund mechanism based on historical emission responsibility results in larger benefits for the LDCs. Conversely, green innovation contribution and emission reduction efforts primarily benefit developed economies and large developing countries. We recommend 1) prioritizing assessments for developing countries before designing cross-border climate policy; 2) considering both fairness and efficiency when designing a refund mechanism.

Corrigendum: Corporate governance and performance of state-owned enterprises in a least developed economy

No abstract available.

Examining the suitability of the local climate zones (LCZ) framework in informal urban settlements: Insights from Kabul, Afghanistan

To better investigate the Urban Heat Island (UHI) effect, a standardized framework known as Local Climate Zones (LCZ) has been developed and widely applied to numerous cities. However, cities from least-developed countries with heterogeneous typologies are underrepresented in the LCZ literature. This study assesses the applicability of the LCZ framework in the slum-dominant built-up environment of Kabul. Using a combined method involving GIS and remote sensing, we classified natural and built-type LCZs and analyzed LCZ-LST fluctuations. The analysis revealed that four new subclasses cover 23 % of the built type LCZs: LCZ 35 (mid/high-rise buildings within compact lowrise layouts) and LCZ 65 (midrise buildings among open lowrise areas) have the lowest LSTs at 34.36 °C and 34.42 °C in July, respectively. In contrast, LCZ 73 (two/three-story buildings in lightweight configurations), and LCZ 9F (sparse buildings on bare soil or sand) have higher LSTs at 37.2 °C and 38.6 °C in July, respectively. These subclasses showed distinct zone parameter thresholds compared to standard LCZs. In most built-type LCZs, Average Building Height (ABH) and Pervious Surface Fraction (PSF) negatively influenced LST, while impervious surfaces and Sky View Factor contributed to higher LST. Based on the findings, LCZ-specified strategies (Vegetation, urban form, and using high-albedo materials) for LST mitigation are proposed. Furthermore, we provide planning, design, and policy recommendations aimed at mitigating urban heat, with potential applicability to other cities facing rapid urbanization and growth of informal settlements. The findings can inform action toward urban climate change adaptation.

Sustainable development and investor confidence: The safe‐haven appeal of green‐bond issuing firms

AbstractThis study investigates the performance of a green‐linked portfolio as a safe haven and hedge against traditional assets during periods of market turmoil, such as the COVID‐19 pandemic and the Russia‐Ukraine war. Utilizing a dynamic conditional correlation (DCC)‐generalized autoregressive conditional heteroscedasticity (GARCH) approach, the study analyzes the portfolio's correlations with global asse like SENSEX 30, BSE ESG 100, Gold, S&P Green Bond Index, and US 10‐year Treasury bonds, demonstrating its stability. Our findings demonstrate that the green‐linked portfolio outperforms both individual stocks and major indices as well as traditional safe havens like gold and US Treasury bonds. The portfolio exhibits superior risk‐adjusted returns and lower volatility, particularly during crisis periods. The portfolio's strong positive correlation with the S&P Green Bond Index highlights its alignment with the broader green market. Interestingly, with a 95% hedge effectiveness, it emerged as a viable safe haven investment, surpassing gold in stability during market uncertainties. Further, forecast matrix results and VAR analysis confirm the portfolio's potential as a diversifier and safe haven asset, characterized by significant positive returns. Additionally, the SAP‐LAP framework provides clarity to stakeholders on safe‐haven options within green markets. Moreover, while green bond markets are more mature in developed economies, our results suggest that green‐linked investments in emerging markets, such as India, offer a promising avenue for investors seeking both financial returns and environmental impact. Overall, the study provides empirical evidence supporting the inclusion of green‐linked assets in diversified portfolios to enhance risk management and capture long‐term growth opportunities.

Renewable energy, regional tourism, and exports to tackle stagnant growth in developed economies

This study examines the effects of energy resources in the form of clean and unclean energy on the economic progress of 30 selected developed economies. This study used data from 1990 to 2020 and it employs the CS-ARDL method to obtain results. The results present that both clean and unclean energy significantly stimulate economic progress. The findings further expose that foreign investment resources in the form of inflow are significant factors that accelerate economic progress in developed economies. The results reveal that tourism development, capital accumulation, and exports are significant factors in boosting economic progress in the selected economies. Estimates from Dumitrescu and Hurlin's method for heterogeneous panels confirm the presence of the feedback-effect hypothesis for unclean energy, while the energy-conservation hypothesis holds for clean energy. This study suggests that targeting low-cost clean energy production is crucial for promoting economic growth and protecting the environment through carbon mitigation strategies. There is also a need to develop a policy framework that emphasizes the transformation of industry towards clean energy at a macro level. Furthermore, transitioning from unclean to clean energy may enhance economic progress by improving environmental quality norms in the selected developed economies. Finally, policies for tourism development, export improvement, and increased inflow of FDI should be directed towards fostering clean energy agreements and achieving environment-friendly economic progress in developed economies.

Autopsy of a futures market failure: Japan’s Dojima rice futures in the early 21st century

Futures markets promise improved price transparency and risk mitigation for staple commodities important to many developing countries, but they can fail even in developed economies with modern financial institutions. We investigate rice futures trading in Japan at the Osaka Dojima Exchange to identify the reasons underlying its failure in 2021. Our analysis reviews the multiple necessary conditions for a successful commodity futures market. We find the Japanese rice market did not meet many of these conditions. The spot market was fragmented with heterogeneous goods and a single dominant firm. Futures trading was unable to facilitate price discovery or effective hedging activity. To the extent it was traded, the Dojima rice futures contract was instead used as a forward contract for making and taking physical delivery. In addition, there was political opposition and regulatory uncertainty around futures trading. Using detailed data on trader positions in the futures market, we show how these factors contributed to diminished interest in futures trading from firms who handle physical commodities. The lessons from the Japanese case are useful for traders, exchanges, and policy makers, especially those in countries where futures markets may face similarly unfavorable economic and political conditions.

Impact of climate change on income inequality. Implications for rich and poor countries

The article aims to provide evidence of the link between income inequality and climate change in both developed and low-income economies. This study uses a descriptive analysis method along with panel data analysis to assess the impact of climate changes on income inequality in 42 advanced economies and 68 developing countries between 1995 and 2020. The results of empirical research confirm that climate change is an important factor responsible for growing income inequality. The impact of a country’s vulnerability is positively associated with increasing income inequality in low-income economies. In turn, climate resilience has a statistically significant effect on income distribution in both groups, although the ability to mitigate climate change and adapt is considerably weaker in developing countries. This research raises our awareness of the links between the economy and climate change, including their implications for income inequality, and signals possible changes in the redistributive system to mitigate climate change and combat income inequality. The added value of this article is the results of research on the negative consequences of climate change on income inequality in over 100 countries. Particular attention was paid to the ethical issue of unequal responsibility for causing climate change between rich and poor countries.

An artificial intelligence handheld sensor for direct reading of nickel ion and ethylenediaminetetraacetic acid in food samples using ratiometric fluorescence cellulose paper microfluidic chip

User-friendly in-field sensing protocol is crucial for the effective tracing of intended analytes under less-developed countries or resources-limited environments. Nevertheless, existing sensing strategies require professional technicians and expensive laboratory-based instrumentations, which are not capable for point-of-care on-site analyses. To address this issue, artificial intelligence handheld sensor has been designed for direct reading of Ni2+ and EDTA in food samples. The sensing platform incorporates smartphone with machine learning-driven application, 3D-printed handheld device, and cellulose paper microfluidic chip stained with ratiometric red-green-emission carbon dots (CDs). Intriguingly, Ni2+ introduction makes green fluorescent (FL) of CDs glow but red FL fade because of the coordination of Ni2+ with CDs verified by density functional theory (DFT), concurrently manifesting continuous FL colour transition from red to green. Subsequent addition of EDTA renders FL of CDs-Ni2+ recover owing to the capture of Ni2+ from CDs by EDTA based on strong chelation effect of EDTA on Ni2+ confirmed via DFT, accompanying with a noticeable colour returning from green to red. Inspired by above FL phenomena, CDs-based cellulose paper microfluidic chips are first fabricated to facilitate point-of-care testing of Ni2+ and EDTA. Designed fully-automatic handheld sensor is utilized to directly output Ni2+ and EDTA concentration in water, milk, spinach, bread, and shampoo based on wide linear ranges of 0–48 μM and 0–96 μM, and low limits of detection of 0.274 μM and 0.624 μM, respectively. The proposed protocol allows for speedy straightforward on-site determination of target analytes, which will trigger the development of automated and intelligent sensors in near future.

Industrial and innovation policies in times of crisis: a widening technological divide?

Purpose The purpose of this paper is to analyze the ongoing revival of industrial and innovation policies across developed and developing economies. Design/methodology/approach The paper compare the scale and scope of recent industrial and innovation policy initiatives across developed and developing economies. Also, it analyzes recent data regarding R&D investments and other innovation indicators. Findings There are enormous disparities across economies in their capacity to implement industrial policies, particularly those to support science, technology and innovation. Most developed economies, and a few developing economies, are implementing bold, ambitious and medium-term innovation policies towards bolstering R&D investments, supporting advanced manufacturing and green energies and strengthening technological capabilities. Amid lack of fiscal policy space and vulnerable debt sustainability positions, institutional deficiencies and weak innovation ecosystems, developing economies – particularly in Africa and Latin America – face enormous challenges to implement strategic industrial and innovation policies. Research limitations/implications Under the current economic, financing and institutional conditions, together with subdued global trade and ongoing geopolitical fragmentation, the technological divide and innovation asymmetries across economies will likely widen even further, paving the ground for a “development divergence” in the coming decade. Originality/value The paper analyzes the implications of the current industrial and innovation policy trends across developed and developing countries. Under the current economic, financing and institutional conditions, together with subdued global trade and ongoing geopolitical fragmentation, the technological divide and innovation asymmetries across economies will likely widen even further, paving the ground for a “development divergence” in the coming decade.

Causal links between patents and economic growth: empirical evidence from OECD countries

Objective of the Study: This paper empirically investigates the reciprocal relationship and causality between patents and economic growth. Methodology/Approach: Utilizing the Generalized Method of Moments (GMM) Panel Vector Autoregression (PVAR) and panel VAR-Granger Causality frameworks, the study concentrates on Organisation for Economic Co-operation and Development (OECD) economies where a high fraction of global innovative activities take place. Originality/Relevance: The relationship and causality between patents and economic growth are investigated and evaluated by distinguishing the former variable into patent applications and grants. Main Results: The findings from the GMM panel VAR approach indicate that patent applications and grants significantly affect economic growth, whereas economic activities do not influence patent-related variables. The estimations from the panel VAR-Granger approach confirm these findings by presenting a unidirectional causality from patent applications and grants to economic growth. The impulse-response functions (IRFs) exhibit parallel findings, and further checks validate the stability of the findings obtained. The outcomes of this study point out two crucial implications. First, the impacts of patent applications and grants affect economic growth similarly while the impact of patent grants lasts longer. Second, while patents cause higher economic activity, the latter does not induce innovative activity through patents in the OECD. Theoretical/Methodological Contributions: It would be useful to conduct separate analyses for a selected product, sector, or country by including research and development (R&D) expenditures for different periods, country groups, and analysis methods. Social/Management Contributions: Countries should prioritize the establishment of an effective patent management system that will increase the pace of innovation and the implementation of incentive policies for the development of high-value-added technology products. JEL Classifications: O34, O40, O50, C23

The Relationship between Income Inequality and Economic Growth

The relationship between income inequality and economic growth has long been a subject of intense academic debate, with varying perspectives emerging from different theoretical and empirical studies. This article delves into the complexities of this relationship, exploring how income inequality can both positively and negatively impact economic growth, depending on the context. Theoretical perspectives range from the classical Kuznets Curve, which posits that inequality initially increases with economic growth before eventually declining, to more contemporary views that highlight the risks of excessive inequality, particularly in developing economies. Empirical evidence from developed and developing countries further underscores the nuanced nature of this relationship. In developed economies, income inequality may sometimes promote growth by incentivizing investment and innovation, provided there are strong institutions to mitigate potential downsides. Conversely, in developing economies, high levels of inequality often inhibit growth by restricting access to education, healthcare, and other essential services, thus limiting human capital development. The study also emphasizes the critical role of institutions and policy interventions in shaping the relationship between income inequality and economic growth. Effective governance, progressive taxation, and investment in social infrastructure are highlighted as key strategies to balance growth with equity. The findings suggest that while some inequality might be necessary to spur economic progress, excessive inequality poses significant threats to long-term sustainable development. The article concludes by advocating for a balanced policy approach that promotes inclusive growth and ensures that the benefits of economic expansion are shared more broadly across society.

Legal Framework and Impact of Corporate Social Responsibility on Environmental Sustainability in India

Corporate Social Responsibility (CSR) has undergone significant evolution from its philanthropic origins to a formalized concept influencing modern business practices. In India, CSR has deep cultural ties to philanthropy and charity, influenced heavily by globalization and regulatory measures such as the Companies Act of 2013. The integration of CSR into corporate strategies has emerged as a vital component for ensuring long-term sustainability and ethical governance. This paper examines the legal framework governing CSR in India, its impact on environmental sustainability, and the challenges and recommendations for enhancing CSR’s effectiveness within the legal realm. The growing importance of CSR reflects a broader global trend where businesses are increasingly held accountable for their social and environmental footprints. This shift is not merely a regulatory requirement but a strategic imperativethat aligns corporate success with societal well-being1 . The objectives of this research paper are to explore the evolution and current state of CSR in India, analyze the legal provisions that shape CSR activities, assess the impact of these activities on environmental sustainability, and identify the challenges and propose recommendations to enhance the effectiveness of CSR initiatives. By providing a comprehensive overview, this paper aims to contribute to the ongoing discourse on corporate responsibility and sustainable development2 . Globally, CSR practices have evolved significantly, with businesses across the world increasingly recognizing their role in addressing societal challenges. In developed economies, CSR is often driven by a combination of regulatory frameworks, stakeholder expectations, and the pursuit of sustainable business models. In contrast, emerging economies like India have witnessed a different trajectory, where traditional philanthropic practices are gradually being replaced by more structured and strategic CSR initiatives.

Motivations for International Open InnovatioN (IOI): the perspective of Quebec SMES in Africa

Objective: This research aims to understand the motivations for SMEs from developed countries to engage in open innovation (OI) projects with partners in developing countries. Methodology: We adopted a qualitative approach and studied the case of 16 SMEs from Quebec that successfully carried out OI projects within African countries. Relevance: Despite the growing body of research on OI within SMEs, the international perspective of OI still needs to be explored. In particular, the context of developing countries has received limited attention, especially the motivations for SMEs from developed countries to undertake OI projects in developing countries. Main results: The results show that OI projects with African partners allow SMEs to integrate into African markets and acquire knowledge different from that of developed economies. These partnerships strengthen the overall organizational capacity of the SME beyond the acquisition of specific knowledge related to the innovation project. They also include social objectives to improve local communities living conditions. Theoretical contributions: By addressing the calls for research on OI within developing countries, this article expands the scope of OI in this context. It also contributes to the resource-based view theory by identifying integration within foreign networks as the main strategic resource, motivating SMEs from developed countries to initiate OI projects in developing countries. Managerial contributions: The study provides insights to SMEs from developed countries about the various reasons for implementing OI projects with partners in developing countries. It also offers them tailored advice to carry out such projects successfully.

Digital economy and economic competitive pressure on local governments: Evidence from China

For decades, fiscal decentralization and gross domestic product growth targeting have resulted in fierce economic competition among local governments in China, putting tremendous economic competitive pressure on them. The latter has serious social and economic implications and is a major issue for policymakers. This study analyzes data from China's 30 provinces for 2011–2021. It demonstrates that digital economic development could considerably reduce economic, competitive pressure on local governments, with trade openness and entrepreneurial dynamism serving as impact mechanisms. This study also found that the alleviating effects are more pronounced in regions with a poor innovation environment, a less developed economy, or lagging human resources. These findings emphasize the important role of the digital economy in increasing regional competitiveness and reducing regional disparities.

Going out by doing good: The effect of mandatory CSR disclosure on outward FDI of Chinese firms

AbstractThis study examines the effect of mandatory corporate social responsibility (CSR) disclosure on outward foreign direct investment (OFDI) of Chinese listed firms. We address potential endogeneity concerns by employing propensity score matching (PSM) and difference‐in‐differences (DID) methods. Our analysis reveals that firms subject to mandatory CSR disclosure exhibit a significantly higher propensity to engage in OFDI and undertake a greater number of OFDI projects. This positive effect is particularly pronounced for specific sub‐samples of firms: highly polluting, non‐state owned, relatively large and those targeting developed economies for investment. Further investigation into the underlying mechanisms suggests that disclosing CSR information facilitates OFDI primarily by enhancing innovation capabilities, alleviating financial constraints and mitigating the liability of foreignness.

From waste to worth: a mediation analysis of lean manufacturing and operational performance in developing country

PurposeLean Manufacturing Systems (LMS) gained popularity among manufacturers globally. However, their efficacy in developing and least-developed countries remained noticeably understudied. Motivated by this research gap, the researchers of this study designed a quantitative study with a structured survey technique to investigate its context-specific impact on the apparel industry of a developing country. Hence, this study aimed to examine the relationship between LMS and elimination of waste (EOW) and operational performance (OP) and comprehend how the EOW mediates the relationship between an LMS and OP within the apparel industry of a developing economy.Design/methodology/approachThe researchers collected data from 227 garment companies in Bangladesh. These organization-level data were then analyzed using the structural equation modeling approach with AMOS 20.0 software to examine the direct and indirect effects among EOW, LMS and OP.FindingsThe findings of this study suggest that EOW has a direct and significant effect on OP. This research also revealed that EOW has a partial mediating effect on the relationship between LMS and OP.Research limitations/implicationsThis research focused on a single industry administering self-reported data and cross-sectional design, limiting generalizability and causal inference.Practical implicationsLMS and directing efforts towards EOW can significantly improve the operational performance of apparel companies by reducing lead times and costs, improving quality and increasing productivity.Originality/valueThese findings can provide useful insight to managers, practitioners and future researchers to understand the relationship between EOW, LMS and OP to optimize their production processes and improve OP in the apparel industry.

Current Role of PET CT in Staging and Management of Penile Cancers.

Penile cancer (PeCa) is a rare urological malignancy characterized by significant geographical variations in both incidence and mortality rates. Due to its rarity and the consequent lack of randomized trials, current management is based on retrospective studies and small prospective trials. In addition, both the diagnostic pathways and treatment strategies exhibit substantial heterogeneity, differing significantly between less-developed and well-developed countries. The prognosis of PeCas is determined by the presence and extent of regional lymph node (LN) involvement. Therefore, the early detection and treatment of LN metastasis is paramount to ensure better outcomes. In recent decades, overall survival of PeCas has increased, mainly due to advancements in imaging techniques and risk stratification. We aim to provide an overview of the current role of PET CT imaging in the management of patients with PeCa.

Finding common development paths in voluntary national reviews reporting on sustainable development goals using aspect-based sentiment analysis.

Voluntary National Reviews (VNRs) provide a platform for participating countries to share their experiences, failures, and successes in achieving the United Nations (UN) Sustainable Development Goals (SDGs). The objective of this study is to gain a deeper understanding of the narrative elements, particularly the sentiment, in VNRs in order to more effectively assess and support global SDG progress. A total of 232 VNRs from 166 countries are analyzed using Aspect-Based Sentiment Analysis (ABSA) to extract each country's sentiment toward the 17 SDGs. The sentiment scores are then compared to the corresponding official UN SDG scores, and countries are grouped by their sentiment toward all 17 SDGs to identify potential common development pathways. The analysis uncovers a notable positive correlation between the reported sentiment and official SDG scores for SDG 2 (zero hunger) and SDG 11 (sustainable cities and communities), and a negative correlation for SDG 5 (gender equality). Conversely, this relationship is not significant for the majority of SDGs, suggesting that VNR narratives may not directly reflect actual progress. A t-distributed stochastic neighbor embedding (t-SNE) approach indicates a consistent sentiment score among developed countries. In contrast, there are greater differences in reporting sentiment among Emerging Markets, Frontier Markets, and Least Developed Countries (LDCs), where there is greater dispersion (especially among LDCs) and sentiment in reporting on SDG progress that appears to have changed from one reporting year to another. These findings highlight the need to interpret VNRs in the context of each country's unique situation and challenges specific to each country.

From Debt to Sustainability: Advancing Wastewater Projects in Developing Countries through Innovative Financing Mechanisms—The Role of Debt-for-Climate Swaps

Developing countries, including Small Island Developing States (SIDSs) and Least Developed Countries (LDCs), are exceptionally vulnerable to climate change due to their distinct geographical and environmental characteristics. Escalating sea levels and heightened salinity levels imperil freshwater reserves, while warmer ocean temperatures and acidification disrupt water demand, tourism, health services, and fisheries. Concurrently, these countries bear the brunt of water shortages, flooding, and declining water quality. However, significant barriers such as limited financing capacities to fund water security initiatives, exacerbated by a growing debt crisis marked by escalating interest rates and inflation, hinder developmental progress and investments in climate adaptation and mitigation endeavors. Consequently, there arises a critical necessity to harness innovative financial mechanisms to transform these debts into opportunities that support effective climate action. This paper explores the potential of debt-for-climate swaps as a catalyst for advancing transformative wastewater projects, focusing on their strategic deployment to underpin critical initiatives. Through case studies and empirical evidence, the paper elucidates how debt-for-climate swaps can enhance sustainable wastewater management systems in developing countries and delineates best practices for leveraging these mechanisms and the roles and responsibilities of key stakeholders, including governments, policymakers, the private sector, communities, and climate financial institutions. Combining theoretical insights with tangible examples, this paper furnishes a comprehensive framework for harnessing debt-for-climate swaps to enhance water security and resilience in developing countries. It offers actionable strategies for policymakers, practitioners, and stakeholders to navigate the complex terrain of climate change and engender sustainable development.

Regional Integration and Economic Development: Optimal or Messy Networks?

States join regional integration organizations (RIOs) hoping that membership will boost economic development. Such cooperation should improve the efficiency of economic factors via firm competition, which will promote development. We argue that economic growth is difficult to produce when states form overlapping memberships and join RIOs with economies of similar size and similar levels of development. While joining an RIO may be beneficial, many overlapping memberships tend to involve larger costs through added obligations, leading to low economic performance. Integrating with similarly sized economies is not as beneficial as integrating with larger, relatively wealthier partners. We support our hypotheses using 180 states from 1962-2014. Using social network and time-series analysis, we find that joining multiple RIOs tends to decrease GDP per capita growth. However, the effect is not uniform: the negative effect is stronger in lesser-developed countries and does not hold when RIO membership includes a large economic partner.