Role Of Institutional Quality Research Articles

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.

Do natural resource rents aid renewable energy transition in resource‐rich African countries? The roles of institutional quality and its threshold

AbstractTransitioning to a carbon‐neutral renewable energy (REN) option to decarbonize ecosystems and mitigate carbon dioxide (CO2) emissions and the negative impacts of climate change is consistent with United Nations Sustainable Development Goals 7 and 13. Scholars have identified natural resource wealth and institutions as critical factors in the REN transition in resource‐rich countries. Financial barriers are arguably the most significant impediments to transitioning to REN, as it is more capital‐intensive and costly to produce, invest in, and use than traditional fossil fuel‐based energy. Meanwhile, weak institutions and corruption in most resource‐rich countries culminate in the resource curse phenomenon and the mismanagement of natural resource wealth. It implies that institutions (weak or strong) modify the natural resource rent contribution to the REN transition. Previous research has paid little attention to the impact of the interplay between natural resources and institutional quality on the REN transition in resource‐rich African countries. This study examines how institutions moderate the contribution of natural resource wealth to accelerating or inhibiting the REN switch in resource‐rich African countries for the period 2000–2021, using fully modified ordinary least squares, a Driscoll–Kraay nonparametric covariance matrix, and moments‐based quantile regression estimators. This study departs from earlier studies by determining the institutional quality threshold above which institutions significantly stimulate natural resource rents to accelerate Africa's REN transition. The findings indicate that institutions in resource‐rich African countries breed inefficient bureaucracies and corruption in natural resource rent administration. These undermine the ability of natural resource incomes to facilitate a shift to renewable energy sources. The threshold analyses indicate that most resource‐rich African countries operate below the institutional quality threshold. This finding corroborates that inefficient institutions abet natural resource rent mismanagement and hinder the channeling of resource income toward the REN transition. The findings' policy implications are robustly articulated and outlined.

The roles of inflation and financial development in the effectiveness of foreign aid: Evidence from Bangladesh

The long-run economic benefits of foreign aid in a recipient country depend on the absorptive capacity of the nation in terms of institutions, macroeconomic stability, and financial development. While the role of institutional quality on the aid-growth nexus has already been empirically determined, the moderating roles of inflation and financial development have not been investigated. Therefore, our study addresses these research gaps by examining the moderating roles of inflation and financial development on the impact of aid on economic growth in Bangladesh during 1980–2020 period. It utilizes the Autoregressive Distributed Lag (ARDL) bounds testing technique. This study reveals that the impact of aid on growth depends on the levels of inflation and financial development. If inflation rises above 9.85% threshold level, the marginal effect of aid on growth turns negative. In contrast, the marginal effect of aid on growth is positive even at the maximum level of financial development. The outcomes are robust to alternative proxies and structural breaks. The implication is that an increase in aid and financial development boosts economic growth, but high inflation limits the efficacy of aid. Therefore, to reap the long-term economic benefits of aid, countries should embrace the requisite macroeconomic stability and financial development.

Mobile Money and Financial Inclusion: The Role of Institutional Quality

Mobile Money and Financial Inclusion: The Role of Institutional Quality

Do geopolitical risk and economic policy uncertainty cause CO2 emissions in BRICS? The role of institutional quality and energy productivity

Do geopolitical risk and economic policy uncertainty cause CO2 emissions in BRICS? The role of institutional quality and energy productivity

Trade, institutional quality and economic growth in Africa: does China and United States trade matter?

We investigate the relationship between China and the United States’ trade with sub-Saharan Africa (SSA) and the region's economic growth (EG). The research analyzes trade dynamics, distinguishing between the effects of exports and imports, while highlighting the significant role of institutional quality (IQ) in shaping EG within the context of China–US trade with Africa. Despite increasing trade with China and the US, SSA’s growth has lagged, prompting exploration into the specific trade forms contributing to EG and the role of IQ. Using data from 30 SSA countries from 2002-2020, we employed AMG and IV-2SLS estimations for our analysis. The study reveals that IQ complements Chinese and US trade to promote EG. Importantly, Chinese and US imports from Africa consistently boost growth, with the impact of exports diminishing. Chinese trade proves influential in countries with strong institutions but lacks impact in those with weaker institutions at higher levels of IQ. In contrast, US trade benefits growth in both strong and weak institutional contexts. These findings are instrumental for policymakers, offering insights into the specific trade activities that drive growth in SSA. Additionally, we emphasize the pivotal role of robust institutions in ensuring the positive impact of trade on growth.

Globalisation and Manufacturing Sector Performance: The Role of Institutional Quality in Nigeria

Globalisation and Manufacturing Sector Performance: The Role of Institutional Quality in Nigeria

The role of institutional quality in the nexus between agricultural expenditure and agricultural production in Nigeria

The role of institutional quality in the nexus between agricultural expenditure and agricultural production in Nigeria