Scientific Annals of Economics and Business
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Unveiling the Linkages between Economic Complexity, Innovation and Growth: The Case of High-Income and Upper Middle-Income Economies
Get PDFThis article explores the essential variables of economic complexity, innovation, and growth by researching the relationships between imperative economic indicators in selected high-income and upper middle-income economies. The economic complexity and innovation of the observed economies are robustly linked to their economic growth. The goal of this article is to investigate the significance of economic complexity and innovation in encouraging economic growth in high-income and upper middle-income economies. Miscellaneous methodological measurement instruments have been applied towards exploring the linkages between the crucial variables of economic complexity, innovation, and economic growth. The empirical data necessary for conducting this exploration were accumulated from primary and auxiliary sources. Analysis of the observed economies was performed using the statistical software package SPSS 25. The exploration results reveal the essential determinants of economic complexity and innovation for economic growth in selected countries. The interrelated determinants supervised for enhancing innovation and growth are linked to synthesized indicators of economic complexity. Confirmation of the heterogeneity between essential variables and awareness of sensitivity is the foundation for the subsequent acceptance of convenient economic complexity indicators for improvement of the critical fields of national economies
Asymmetric Information and Agency Cost of Financial Leverage and Corporate Investments: Evidence from Emerging South-East European Countries
Get PDFIn this paper, we investigated the impact of financial leverage on investment decisions on a sample of 811 firms from ten emerging South-Eastern European countries (Bosnia and Herzegovina, Bulgaria, Montenegro, Croatia, Greece, Romania, North Macedonia, Slovenia, Serbia and Turkey). We apply a panel regression model involving investment ratio as a dependent variable, leverage as independent variable, and control for several firm characteristics that closely determines the corporate investments. The results of the analysis show that leverage is negatively related to investment in the companies in SEE. But only long term debt has a stronger negative impact on investment for firms with low growth opportunities than for firms with high growth opportunities. These findings show supportive evidence of agency theories of corporate leverage, especially with the debt overhang theory, but did not give strong validation that leverage has a disciplining role for firms with low growth opportunities in SEE emerging markets. In addition to leverage, we found that corporate investments in the SEE countries decrease significantly with tangibility and the company size. Corporate investments in the SEE countries increase significantly with cash flow, sales, non-debt tax shield and profitability. Overall, the results slightly defer with those from the research on the case of developed markets
Comparing Decision Trees and Association Rules for Stock Market Expectations in BIST100 and BIST30
Get PDFWith the increased financial fragility, methods have been needed to predict financial data effectively. In this study, two leading data mining technologies, classification analysis and association rule mining, are implemented for modeling potentially successful and risky stocks on the BIST 30 index and BIST 100 Index based on the key variables of index name, index value, and stock price. Classification and Regression Tree (CART) is used for classification, and Apriori is applied for association analysis. The study data set covered monthly closing values during 2013-2019. The Apriori algorithm also obtained almost all of the classification rules generated with the CART algorithm. Validated by two promising data mining techniques, proposed rules guide decision-makers in their investment decisions. By providing early warning signals of risky stocks, these rules can be used to minimize risk levels and protect decision-makers from making risky decisions
A Comparative Analysis on the Role and Market Linkages of Gold Backed Assets During COVID-19 Pandemic
Get PDFGold is a traditional favorite investment avenue for investors all over the globe, particularly during the crisis period. Irrespective of the nature of the crisis, investors are allocating their funds to different gold-backed assets. This paper uses various globally traded gold-backed assets to identify its role and market linkages during the Covid 19 pandemic. Daily prices of assets from March 2020 to January 2022 were employed. DCC GARCH model is used to ascertain time-varying correlations and quantile regression was employed to examine the relationship between assets in different quantiles. Based on the analysis, safe haven property of all the assets is revealed and it is associated with the severity of the stock market crash as specified by the quantiles. Moreover, double exposure of gold mining stock results in different flights to quality. Co-movement of gold bullion, gold futures, and gold volatility index is visible during this crisis. Gold Exchange Traded Funds and gold-backed cryptocurrency offer diversification by decoupling with gold bullion in the portfolio. The paper highlights the importance of the choice of gold-backed assets along with gold bullion in the investment portfolio based on its role and market linkages
The Effect of Fiscal Policy Asymmetries on Business Cycle Correlation in the EU
Get PDFThis paper reviews the role of bilateral fiscal differences, fiscal indiscipline and their joint effects in particular in determining business cycle synchronicity in the European Union (EU). Panel data comprising 28 EU members from 1999–2019 are used in the analysis. The two-step Instrumental Variable–Generalized Method of Moments (IV–GMM) is employed to estimate the effects of examined fiscal measures on business cycle correlations. The study finds that fiscal indiscipline doubles the negative effect of increasing fiscal differences on business cycle correlation compared to fiscally disciplined country-pairs. The findings suggest reopening the debate on fiscal policy coordination across Europe
The Effect of Economic Growth on Employment in GCC Countries
Get PDFThe objective of this research is to analyze the employment intensity of growth in six Gulf Cooperation Council countries between 1970 and 2017. To this end, a two-step econometric methodology is proposed. First, we estimate the time-varying employment intensity of growth using the time-varying parameters model based on the Kalman filter. Second, we identify the short and long-run determinants of the obtained employment intensity of growth using the Pooled Mean Group estimator. The analysis uncovers that elasticities range between 0.4 and 0.6 and has an increasing pattern over time. Findings reveal that in the long-run, the employment intensity is positively affected by trade liberalization, the share of services in GDP, the working-age population growth, and urbanization, while macroeconomic volatility has a negative impact. In the short-run, trade liberalization and natural resource rents exert adverse but weak effects on employment intensity. Based on these findings, some policy recommendations are drawn.JEL Codes - J23; O47; C32; C2
An Empirical Model of Motivation for Social Entrepreneurship
Get PDFThis paper responds to calls for more empirical research in social entrepreneurship (SE) and aims to empirically establish the role of intrinsic, extrinsic, and complex motivations, alongside employment status and the existence of start-up capital on motivation for SE. A quantitative methodology is employed, using multiple linear regressions (MLR). Six hypotheses are tested and the results reported show that all variables have a positive effect on SE. For the first time, this study tested the “complex motivation” which has a positive impact on SE up to the level that intrinsic and extrinsic motivation, become non-significant.JEL Codes - A14; E02; E03; E61; M14; O31; O52; P5
University Behavior under Borrowing Constraints: The Effect of Students' Abilities Distribution
Get PDFThe interaction between a university and potential students is examined under the assumptions of financial constraints and of students' abilities following the pattern of a triangular distribution. Subsequently, a comparative statics analysis in terms of welfare and vectors composed of three components – namely quality, tuition fee and ability threshold – is provided. Results suggest that the mode of the distribution is an intrinsic part of equilibria, and that a human capital maximizing university makes additional efforts in terms of pricing and non-pricing strategies in order to alleviate the inconveniences arising due to financial constraints and non-uniformity in the distribution of students' abilities.JEL Codes - D42; H42; I21; I2
Effectiveness of monetary policy: Application of modified Peter and Clark (PC) algorithms under Graph-Theoretic Approach
Get PDFIt is common practice that central banks around the world must adopt an inflation targeting framework; based on the assumption that inflation could be reduced by increasing interest rates. On contrary, the theoretical literature and data-based evidences differ remarkably. The arduous attached in finding the true association and causation is the existence of multiple monetary transmission channels. Theoretical literature lists both monetary and non-monetary channels linking interest rate and inflation. However, most of the existing studies are focused on single equation model ignoring other parallel channels. This study is first of its kind where we have developed modified Peter and Clark (PC) algorithm of the Graph-Theoretic approach taking all the monetary and non-monetary channels to determine the causal nexus between monetary policy and inflation. The results show that, causality is running from interest rate towards inflation; suggesting a positive and significant long run relationship of interest rate with inflation in case of Pakistan. Furthermore, monetary policy have cost-side effects on inflation; however, the monetary policy becomes counterproductive whenever high interest rate is used to decrease cost push inflation. Therefore, there is need of serious rethinking about current monetary policy regime.JEL Codes - E4; E5; E42; E5
Teleworking and Emotional Experience and Wellbeing: The Case in the Turkish Financial Services Industry During COVID-19
Get PDFSince the worldwide increase in COVID-19 cases, teleworking in the Turkish Financial Services Industry has become increasingly popular. Wellbeing of working outside traditional workplace settings, is still in its infancy and as far as we understand, has not yet been addressed in the Turkish Financial Industry. We administered a survey using the telephone, e-mail and other social media asking employees in the financial sector in Turkey currently working under these new conditions to provide us with specific responses which take as our data. 438 valid responses were received and analysed using Structural Equation Modelling on Lisrel. We tested the relationship between teleworking, Covid-19 fear, emotional experience, and affective well-being. As a result of the study we found a significant relationship (i) between Covid-19 fear and individual differences and (ii) between individual differences and affective wellbeing. The findings will allow financial institutions managers to re-evaluate working conditions during the pandemic period, while guiding legislators to produce policies.JEL Codes - D53; I31; D9