Role Of Institutional Quality Research Articles

FDI, industrialisation and environmental quality in SSA—the role of institutional quality towards environmental sustainability

In light of the quest to achieve economic development without compromising environmental quality, we empirically examine whether institutional quality (INSQY) can help moderate the possible harmful effects of foreign direct investments (FDI) and industrialisation on environmental quality in sub-Saharan Africa (SSA). We utilise the Driscoll and Kraay standard error estimation technique on a panel of 45 SSA countries from 2000 to 2019. The results indicate that FDI and industrialisation generally have a significant harmful effect on the environment. Our findings reveal that INSQY directly promotes environmental quality. Notably, the results confirm that INSQY plays a stimulating role in mitigating the adverse effects of FDI and industrialisation on environmental quality. The results further validate the environmental Kuznets curve (EKC) hypothesis in SSA. These findings contribute to environmental sustainability literature and offer policymakers insights on how INSQY can enhance environmental quality. Our empirical results are also robust to different estimation techniques, such as the two-stage least squares. We recommend SSA leaders strengthen institutional capacities, enforce environmental regulations, and implement strict policies to ensure environmental quality while promoting industrialisation and FDI inflows.

Role of Institutional Quality and Financial Developments in Realizing Clean Energy Legislation in Indonesia

Role of Institutional Quality and Financial Developments in Realizing Clean Energy Legislation in Indonesia

The Role of Institutional Quality on FDI: A Comparison for Pre and Post – Global Financial Crises

In this study, the relative importance of institutional quality indicators on foreign direct investment (FDI) is investigated using a dynamic panel regression model for the countries that attracted the most FDI between 1996-2021. The World Bank (2023) data shows that FDI inflows gained a significant momentum at the beginning of the 2000s and reached its highest level in 2007. However, the Global Financial Crises (GFC) created a turning point in FDI inflows and it followed a very volatile course in the following years. For this reason, the analysis focused on the periods pre and post the global financial crisis. As a result of the study, it is revealed that all institutional quality indicators (except the rule of law) have positive effects on FDI inflows in the pre-crisis period, and regulatory effectiveness, government effectiveness and corruption control have a relatively higher impact on FDI inflows. On the other hand, it has been determined that no institutional quality indicator has a significant effect on foreign direct investments in the post-crisis period when FDI inflows are highly volatile.

International financial integration and financial stress of emerging market economies: The role of institutional quality

In the wake of unprecedented financial liberalization policies adopted by Emerging Market Economies (EMEs) since the late 20th century, their integration into global financial markets has brought forth both opportunities and challenges. This paper endeavors to assess the intricate relationship between international financial integration (IFI) and financial stress in EMEs, focusing on the potential moderating effect of institutional quality. Addressing key questions, it examines how various IFI indicators impact financial stress and evaluates the role of different dimensions of institutional quality in influencing this relationship. Using a Financial Stress Index (FSI) and employing the panel threshold regression technique, the study unveils significant threshold effects of institutional quality on the IFI-FSI nexus, with variations across different institutional factors. This study underscores the vital need for policymakers to identify threshold levels in institutional quality indicators to strike a balance between attracting investments and preventing unwarranted financial distress.

An Examination of impact of infrastructure on Foreign Direct Investment: The Role of Institutional Quality in MENA Region from (2000-2020)

An Examination of impact of infrastructure on Foreign Direct Investment: The Role of Institutional Quality in MENA Region from (2000-2020)

The impact of factors on environmental pollution in asean countries: The role of institutional quality

The impact of institutional quality on environmental pollution in ASEAN countries is analyzed in this study. The researcher collected 250 observations from the World Bank dataset using data from 1996 to 2020. The author applied principal component analysis (PCA) and autoregressive distributed lag (ARDL) techniques to estimate panel data. The evidence of this study suggests that institutional quality has a negative impact on environmental pollution in the short run and a positive impact in the long run. Other macro factors, such as economic growth, trade openness, financial development, FDI, and energy consumption, have varying degrees of impact on environmental pollution. To the best of the authors' knowledge, there is currently no research examining the impact of institutional quality on environmental pollution in ASEAN countries, with the institutional quality variable created from six indicators based on the WGI database by using the PCA technique.

The role of institutional quality on tourist arrivals in leading emerging economies

The role of institutional quality on tourist arrivals in leading emerging economies

Public Expenditure in the Fastest Growing and Emerging Market Economies in Africa: The Role of Institutional Quality

Emerging and fastest-growing markets in Africa are developing their financial environment to attract investors and position themselves as an upcoming generation of strong and influential markets. The subject of this study is public expenditure outlays used to stimulate economic activity in emerging markets in Africa. The purpose of this study is to isolate the main determinants of government spending and the role of institutional quality. The relevance lies in the significance of maintaining such expenditures at optimal levels to benefit the economy. The scientific novelty lies in the analysis of the main factors explaining government spending to support policy formulation in emerging markets. This study applied the autoregressive distributed lag (ARDL) model to test both long-term and short-term dynamics. Based on the results, the study demonstrated both joint and long-run causality between the selected variables and government expenditure. Short-term causality is not confirmed. The study concluded that the Wagner law still holds, in which economic growth is coupled with an increase in expenditure. The Economic freedom index is more effective in controlling government expenditure than the POLITY 2 variable. This study offers some policy implications.

Decoding Inflation: Role of Institutional Quality in Türkiye Using Advanced Econometric Techniques

Decoding Inflation: Role of Institutional Quality in Türkiye Using Advanced Econometric Techniques

Environmental degradation in South Asia: Implications for child health and the role of institutional quality and globalization

Environmental degradation in South Asia: Implications for child health and the role of institutional quality and globalization

The role of institutional quality and financial literacy in cryptocurrency adoption

The role of institutional quality and financial literacy in cryptocurrency adoption

Advancing sustainable industrial development in Africa: the role of institutional quality and renewable energy

Advancing sustainable industrial development in Africa: the role of institutional quality and renewable energy

External Debt and Economic Growth Nexus in Sub-Saharan Africa: the Role of Institutional Quality

Sub-Saharan African (SSA) countries have recently embarked on an economic growth trajectory which is characterized by ambitious national development aspirations. The ability of the SSA economies to generate sufficient domestic revenues to spur their desired economic growth is limited resulting into fiscal deficits. External Debt has provided alternatives to the fiscal deficits prevalent in SSA economies. Dividends from external debt investments have been unevenly witnessed among the SSA countries. Regions with better institutional quality continue to reap considerable dividends from external debt investments while SSA economies continue to accumulate external debt with sluggish economic performance. This study made use of the Generalized Method of Moments (GMM) to examine the role played by institutional quality on the nexus between external debt and economic growth on a panel of 28 SSA countries over the period 2005 - 2021. Empirical results indicate that institutional quality influences a positive and significant relation between external debt and economic growth. Policy makers in SSA countries should therefore strive to improve on institutional quality in regard to external debt management in order to reap more economic benefits from external debt

Driving sustainable development: Role of institutional quality and future of China's mineral resource management projects

The rapid industrial progress in China along with significant dependence on minerals, raises concerns about the influence of its overall reliance on nations’ development trajectory. Moreover, institutional quality also plays an active role in shaping the economic structure of any nation. The study investigates the intricate association among mineral extraction, institutional quality, and economic development in China from 1990 to 2022. For an empirical investigation, the ARDL (Autoregressive distributed lag) co-integration method is employed based on the order of integration of the series defined by the ADF(Augmented Dickey-Fuller) stationarity test. Moreover, CUSUM and CUSUM square (Cumulative sum of square) also confirm the stability of the model. According to the findings mineral rent and mineral exports are found to be positively significant in the short and the long run and increase economic growth. While institutional quality is shown to be positively insignificant in the short term, in the long run, it is shown to have a positive significant effect. Moreover, inflation and population growth are shown to have a positive significant impact in the short term, but trade is found to be insignificant. Lastly, the study intends to suggest policy suggestions based on the results. A country should have a strong institutional setup to ensure sustainable long-term growth.

Technology Transfer, Technological Progress and Economic Growth: The Role of Institutional Quality in Pakistan

This study investigates the role of institutions in Pakistan’s efforts to stimulate technological progress, specifically analysing the evolution of institutional quality, technology transfer through technical cooperation grants, technological progress and economic growth. The role of institutional quality is emphasised, as proactive institutional coordination is paramount to achieve technological upgrading. As the evidence amassed shows, Pakistan’s institutional quality ranks lower than the successful industrialisers of East Asia, such as Japan, Korea and Taiwan. To ensure the robustness of our findings, data from 1996 to 2020 was deployed. The findings underscore the importance of policymakers in Pakistan directing their attention to fostering skills and competencies essential for patents or cultivating an entrepreneurial mindset, underlining the critical role of strong institutions in this process.

Total factor productivity and institutional quality in Vietnam: which institutions matter most?

The roles of institutional quality’s impact on firm performance are becoming increasingly prominent in the literature. This is true in the Global North and South. Vietnam has seen less research on this topic than other developing countries, so this paper seeks to rectify this by examining whether or not institutional quality influences firm performance, as measured by total factor productivity (TFP). This paper also digs deeper into the sub-components to see which institutions are the most influential. We applied the General Method of Moments (GMM) approach to a firm-level panel dataset covering the 2010–2020 period to examine institutional quality's impact on firm TFP. Results are explored by firm size and by ownership type (domestic private, foreign and state-owned). Using rich datasets covering institutional quality at the provincial level in Vietnam and also individual firm performance from 2010 to 2020, we found that Time cost (how long it takes firms to deal with the government on various issues) and Labor policy (how easy it is to hire good quality labor) are the most important of the 10 institutions studied. Additionally, while not all institutions influence TFP, institutional quality overall (all 10 institutions combined) clearly has a positive influence on TFP. This study fills a research gap by examining the relationship between institutional quality and firm performance in Vietnam. The findings emphasize the significance of Time cost and Labor policy as influential institutions and highlight the positive overall impact of institutional quality on TFP. The policy recommendations offered provide valuable insights for the government to further enhance firm productivity through targeted measures.

Natural Resources Abundance and Human Well-Being: the Role of Institutional Quality

Natural Resources Abundance and Human Well-Being: the Role of Institutional Quality

FDI, institutional quality and gender employment in Sub-Saharan Africa

With the widening saving-investment gap and the limited domestic financial resources to drive development imperatives in Sub-Saharan Africa (SSA), foreign direct investment (FDI) is considered a viable and sustainably promising option for boosting employment generation and closing gender gaps in employment. This paper provides critical insights into the gender and age-based employment effect of FDI in SSA and the role of institutional quality in shaping the relationship. The two-step generalized method of moments modelling framework was adopted to analyse relevant data of 29 SSA countries over the 2000-2021 period. The results revealed that FDI has a significant employment-enhancing effect irrespective of gender and age considerations. We also find that institutional quality amplifies this effect. Efforts should, therefore, be concentrated on improving institutional quality, the success of which will appeal to foreign investors and attract more foreign investments.

The Impact of Electricity Production on Environmental Quality: The Role of Institutional Quality in Ghana

The Impact of Electricity Production on Environmental Quality: The Role of Institutional Quality in Ghana

Greening African economies: Investigating the role of financial development, green investments, and institutional quality

AbstractThis study investigates the impact of financial development (FD) and green investments (GIs) on environmental pollution in Eastern and Southern African countries from 1990 to 2020. The research not only investigates the direct impacts of FD and green finance on environmental pollution but also examines the moderating role of institutional quality (IQ) and possible nonlinear effects of FD and green finance. Our analysis from the Panel autoregressive distributed lag (ARDL) long‐run PMG reveals a negative association between FD, green investment, and environmental pollution, indicating that a well‐developed financial sector supports sustainable initiatives, leading to improved environmental outcomes. IQ moderates this relationship, with strong governance enhancing the positive effects of FD and green finance on environmental preservation. Interestingly, the study identifies nonlinear impacts, suggesting that beyond a certain threshold, the contributions of FD and GIs to environmental preservation may diminish. Recognizing these nonlinearities and the role of IQ can inform more targeted policies for maximizing efforts toward environmental conservation in African economies.