Institutions and Economies

Governance and Economic Growth: The Mediating Role of FDI Inflows

Dani Rahman Hakim, Saksono Budi — Mon, 01 Jul 2024 00:00:00 +0800

Abstract: Many studies have attempted to examine the effect of governance on
economic growth. However, these studies reveal heterogeneities that make it difficult to
implement policy. This current study attempts to fill these gaps by employing foreign
direct investment (FDI) inflows as a mediating variable. This study employs balanced
panel data for the 10 Association of Southeast Asian Nations (ASEAN) between the
period of 2000 to 2021. Based on the mediation framework in a random effect model,
this study reveals that political stability (PV) and government effectiveness (GE) affect
FDI positively. Moreover, this study finds that FDI can mediate the indirect effect of
PV and GE on economic growth. However, this study also reveals that the direct effect
of GE on economic growth is negative. This implies that ASEAN countries should be
practical, effective, and systematic in improving GE to minimise opportunity costs. On
the other hand, ASEAN countries should focus on maintaining PV to attract more FDI
and encourage economic growth.

Zakat and Socio-Economic Impact: The Role of Local Government and Zakat Institutions

Umar Al-Haddad, Agung Maulana, Rifaldi Majid, Muh. Fudhail Rahman — Mon, 01 Jul 2024 00:00:00 +0800

Abstract: This study aims to solve research questions on whether support for zakat
institutions (ZIs) from regional governments in the East Java province of Indonesia
affects the social and economic conditions of the region. The authors observed 11 samples
of cities and districts in East Java over the last three years (2019 to 2021). Thirty-three
research data were processed using panel data regression techniques with a fixed-effects
model approach. Data was obtained from the National Zakat Institution (Baznas). The
results show that financial support from the local government budget (RREB) and
through zakat regulations of the regional governments in East Java have a positive
effect on GRDP and a significant negative effect on the Gini index. In addition, zakat
distribution activities in East Java have also been shown to have a significant positive
and negative effect on GRDP growth and the Gini index. This study also provides
recommendations to the local government of East Java and zakat stakeholders in
synergising to build a better regional ZI system to support the regional economy.

Access Barriers for Marine Products Exporters in Andhra Pradesh

K. Vijaya Sekhar, T. Durga Prasad, A. Irin Sutha, G. Jitendra, N. Visalakshi — Mon, 01 Jul 2024 00:00:00 +0800

Abstract: The current study examines the barriers faced by marine product exporters
in Andhra Pradesh, India. These are categorised into infrastructural, operational,
human resource, financial, raw material, general, and exporting process barriers. The
present study is descriptive in nature, and surveys 115 marine exporters from Andhra
Pradesh. Cronbach’s alpha and factor analysis are used to assess the reliability of the
questionnaires and indicate a good reliability score between the variables. Following that,
we used a single-factor Analysis of Variance (ANOVA) test to determine the significance
of the variables. Finally, the findings show that infrastructural, general, and exporting
process barriers have a positive significant relationship with export performance, whereas
human resource, financial, raw material and operational barriers have a negative
significant relationship. This study can be beneficial to state and central governments
by increasing foreign reserves and tax revenue, increasing employment opportunities,
expanding the global market, properly utilising natural resources, and improving banks’
financial schemes.

Impact of Global Value Chains on the Performance of Moroccan Exports: Sector Analysis with Economic Dependencies

Abdelkarim Jabri, Jaafari Islam, Zenansi Mourad — Mon, 01 Jul 2024 00:00:00 +0800

Abstract: The last few decades have been marked by profound changes in international
trade, which is increasingly organised around global value chains. Theoretical and
empirical research shows the benefits associated with increasing participation in global
value chains (GVCs) for both developed and developing countries. However, empirical
studies on the effects of backward and forward participation in GVCs for the specific case
of a country remain limited. This article seeks to examine whether Morocco’s backward
and forward participation in GVCs improves the performance of its exports over the
period of 1995 to 2018 using different cointegration techniques in panel data. Our
empirical results show that forward and backward participation positively impact exports
and domestic value added in Moroccan exports. They also indicate that domestic and
foreign service inputs contribute positively to this performance. Based on the obtained
results, we propose some recommendations for policymakers.

Economic Crisis Treatment Based on Artificial Intelligence

Mohamed F. Abd El-Aal — Mon, 01 Jul 2024 00:00:00 +0800

Abstract: There are many possible causes of an economic crisis—a financial downturn,
a banking meltdown, political strife (e.g., the Russia-Ukraine war), or a health-related
catastrophe (e.g., Covid-19). Some of these crises are expected, while others are “bolts
from the sky.” However, what is certain is that all these crises, whatever their cause,
have a negative impact on global gross domestic product (GDP). If we can identify the
components of output that have the most impact in an economic crisis, we might be able
to mitigate its effects. Therefore, this paper uses machine learning algorithms to determine
how the components of expenditure and sectoral value-added approach impact global
GDP. The gradient boosting algorithm is the most accurate model for predicting and
determining the impact of independent variables on a dependent variable. The results
indicate that government spending has the largest effect on global GDP, accounting for
68.3% of the impact. The economic sector with the most impact on global GDP is the
service sector, which affects global output by 42.3%, followed by the agricultural sector
at 30.2%. Thus, stimulating government spending and the service sector may reduce the
negative effects of an economic crisis.