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Kruiniger, Hugo. "GMM ESTIMATION AND INFERENCE IN DYNAMIC PANEL DATA MODELS WITH PERSISTENT DATA." Econometric Theory 25, no. 5 (October 2009): 1348–91. http://dx.doi.org/10.1017/s0266466608090531.
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In this paper we consider generalized method of moments–based (GMM-based) estimation and inference for the panel AR(1) model when the data are persistent and the time dimension of the panel is fixed. We find that the nature of the weak instruments problem of the Arellano–Bond (Arellano and Bond, 1991,Review of Economic Studies58, 277–297) estimator depends on the distributional properties of the initial observations. Subsequently, we derive local asymptotic approximations to the finite-sample distributions of the Arellano–Bond estimator and the System estimator, respectively, under a variety of distributional assumptions about the initial observations and discuss the implications of the results we obtain for doing inference. We also propose two Lagrange multiplier–type (LM-type) panel unit root tests.
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Cheng, Ningning, and Youngsok Bang. "A Comment on the Practice of the Arellano-Bond/Blundell-Bond Generalized Method of Moments Estimator in IS Research." Communications of the Association for Information Systems 48, no. 1 (2021): 423–42. http://dx.doi.org/10.17705/1cais.04838.
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Shina, Arya Fendha Ibnu. "ESTIMASI PARAMETER PADA SISTEM MODEL PERSAMAAN SIMULTAN DATA PANEL DINAMIS DENGAN METODE 2 SLS GMM-AB." MEDIA STATISTIKA 11, no. 2 (December 30, 2018): 79–91. http://dx.doi.org/10.14710/medstat.11.2.79-91.
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Single equation models ignore interdependencies or two-way relationships between response variables. The simultaneous equation model accommodates this two-way relationship form. Two Stage Least Square Generalized Methods of Moment Arellano and Bond (2 SLS GMM-AB) is used to estimate the parameters in the simultaneous system model of dynamic panel data if each structural equation is exactly identified or over identified. In the simultaneous equation system model with dynamic panel data, each structural equation and reduced form is a dynamic panel data regression equation. Estimation of structural equations and reduced form using Ordinary Least Square (OLS) resulted biased and inconsistent estimators. Arellano and Bond GMM method (GMM AB) estimator produces unbiased, consistent, and efficient estimators.The purpose of this paper is to explain the steps of 2 SLS GMM-AB method to estimate parameter in simultaneous equation model with dynamic panel data. Keywords:2 SLS GMM-AB, Arellano and Bond estimator, Dynamic Panel Data, Simultaneous Equations
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Dykas, Paweł, Tomasz Misiak, and Tomasz Tokarski. "Determinants of spatial differentiation of labour markets in Ukraine." Przegląd Statystyczny 67, no. 1 (August 18, 2020): 33–50. http://dx.doi.org/10.5604/01.3001.0014.1783.
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The aim of this paper is to present the differentiation of the situation in regional labour markets in Ukraine in the years 2004–2017. The analyses carried out for this purpose concern the diversity and dynamics of macroeconomic variables, such as labour productivity (measured by GDP per worker), wages, and unemployment rates. Moreover, using panel data from the Statistical Office of Ukraine, the authors estimate the parameters of a set of equations based on increments and levels by means of the system estimator of the generalized Blundell and Bond moments method from 1998. The estimates concern the parameters of equations describing the main determinants of the increase in unemployment rates and wages for the entire Ukrainian economy – both Left – and Right-Bank Ukraine.
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Ehizuelen, Michael Mitchell Omoruyi. "China's Infrastructure Financing and the Role of Infrastructure in Awakening African Economies." Journal of Comparative Asian Development 18, no. 2 (July 2021): 1–25. http://dx.doi.org/10.4018/jcad.20210701.oa2.
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African economies, through Agenda 2063, recognize that developing infrastructure – transport, electricity, energy, water, and e-connectivity – will be critical for the region to assume a lasting place in the global economic system. As a result, this paper addresses the continent’s infrastructure gap and provides an important insight into the rapidly growing presence of China’s official infrastructure financing in Africa as well as the distinctive character of its involvement. In addition, the paper provides an empirical evaluation of the role of infrastructure in awakening African economies. The generalized-method-of-moments (GMM) estimator for dynamic models of panel data developed by Arellano and Bond (1991), and Arellano and Bover (1995) was employed to estimate an infrastructure-increased growth model.
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Karim, Sitara. "Do women on corporate boardrooms influence remuneration patterns and socially responsible practices? Malaysian evidence." Equality, Diversity and Inclusion: An International Journal 40, no. 5 (January 15, 2021): 559–76. http://dx.doi.org/10.1108/edi-07-2020-0213.
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PurposeThe prime objective of this study is to investigate the moderating influence of executive and independent female directors on the relationship between remuneration packages (CEO and executive director) and socially responsible practices (marketplace, environment, community, workplace and money spent on CSR) of 483 Malaysian listed firms during 2006–2017.Design/methodology/approachThe dynamic estimator, namely, system generalized method of moments (GMM) given by Blundell and Bond (1998) has been employed on the dataset to control dynamic endogeneity, unobserved heterogeneity and simultaneity problems.FindingsFindings indicate that there is a significant relationship between remuneration patterns of CEOs and executive directors and socially responsible activities. In the same way, executive board gender diversity significantly, whereas independent board gender diversity insignificantly moderates the remuneration and CSR nexus.Practical implicationsThis study is particularly significant for regulatory bodies of Malaysia, e.g. Securities Commission Malaysia, Bursa Malaysia, policy makers, investors and managers. For academia, this study fetches support from agency theory, stakeholder theory and upper echelons theory and presents integrated theoretical approach to be considered for future research.Originality/valueThis paper is unique in providing empirical evidence on the moderating effect of both executive and independent women directors on the relationship between remuneration patterns of CEOs and executive directors and independent CSR activities for the first time. Moreover, this study has sourced several theoretical and practical implications. And, the study employs dynamic estimator for precise and concrete results.
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Ezeoha, Abel, and Ferdi Botha. "Firm age, collateral value, and access to debt financing in an emerging economy: evidence from South Africa." South African Journal of Economic and Management Sciences 15, no. 1 (March 16, 2012): 72–93. http://dx.doi.org/10.4102/sajems.v15i1.138.
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This paper applies the Blundell and Bond system generalised method of moments (GMM) two-step estimator to examine the impact of age and collateral value on debt financing, using a panel of 177 non-financial companies listed on the Johannesburg Stock Exchange over the period 1999 to 2009. The results show that South African firms have target leverage ratios and adjust their capital structures from time to time to achieve their respective targets, that the relationship between firm age and debt financing is non-monotonic, and that firms with higher collateral value are likely to face fewer constraints on borrowing and therefore have greater access to medium-term and long-term debts. Robustness tests also reveal that during start-up and maturity stages, a firm’s access to debt markets is significantly influenced by investments in assets that are acceptable to external creditors as collateral. These findings suggest that debt financing policies could be more critical for firms in the start-up and maturity stages.
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Jia, Shaomeng. "Foreign aid: boosting or hindering entrepreneurship?" Journal of Entrepreneurship and Public Policy 7, no. 3 (September 3, 2018): 248–68. http://dx.doi.org/10.1108/jepp-d-18-00031.
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Purpose The current literature has not made any connection between foreign aid and entrepreneurship. The purpose of this paper is to investigate if foreign aid influences entrepreneurial activities in a recipient country. Design/methodology/approach Using system generalized method of moments (Blundell and Bond, 1998) estimators with a panel of 38 recipient countries during 2005–2014, the author tests for 33 measures of entrepreneurial activities. Findings This paper finds that aggregate aid tends to only boost necessity-driven early-stage entrepreneurship and benefit low-income entrepreneurs. Aid to infrastructure promotes entrepreneurship driven by both opportunity and necessity motivations. It also incentivizes competition with homogeneous products. Additionally, evidence suggests that both aggregate aid and infrastructural aid discourage adoption of state-of-the-art technologies, raise business failure rate and are associated more with necessity-driven early-stage entrepreneurial activities for females. Originality/value This is the first research examining “aid and entrepreneurship” relation.
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Abogun, Segun, Ezekiel Aiyenijo Adigbole, and Titilope Esther Olorede. "Income smoothing and firm value in a regulated market: the moderating effect of market risk." Asian Journal of Accounting Research 6, no. 3 (February 18, 2021): 296–308. http://dx.doi.org/10.1108/ajar-08-2020-0072.
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PurposeThis study aims to examine the impact of income smoothing on the value of firms in a regulated security market, moderated by market risk. This is based on the prevalence of accounting scandals resulting in the collapse of firms which has been attributed to the opportunistic behaviors of managers.Design/methodology/approachThe ex post facto research design was employed, and as such, data were gathered from secondary sources. The quantitative approach was also used in the study. Furthermore, the system generalized method of moments (Blundell–Bond) panel estimation technique was used for analyzing the data. Income smoothing was measured using the accrual based methods, while firm value was measured using share price.FindingsThe study found that income smoothing has a negative significant impact on firm value. The study also revealed that market risk is a significant variable that defines the relationship between income smoothing and firm value.Originality/valueTesting the moderating effect of market risk on the relationship between income smoothing and firm value is unique to this study, particularly from a regulated security market and emerging economy.
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Post, Lori, Michael J. Boctor, Tariq Z. Issa, Charles B. Moss, Robert Leo Murphy, Chad J. Achenbach, Michael G. Ison, et al. "SARS-CoV-2 Surveillance System in Canada: Longitudinal Trend Analysis." JMIR Public Health and Surveillance 7, no. 5 (May 10, 2021): e25753. http://dx.doi.org/10.2196/25753.
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Background The COVID-19 global pandemic has disrupted structures and communities across the globe. Numerous regions of the world have had varying responses in their attempts to contain the spread of the virus. Factors such as public health policies, governance, and sociopolitical climate have led to differential levels of success at controlling the spread of SARS-CoV-2. Ultimately, a more advanced surveillance metric for COVID-19 transmission is necessary to help government systems and national leaders understand which responses have been effective and gauge where outbreaks occur. Objective The goal of this study is to provide advanced COVID-19 surveillance metrics for Canada at the country, province, and territory level that account for shifts in the pandemic including speed, acceleration, jerk, and persistence. Enhanced surveillance identifies risks for explosive growth and regions that have controlled outbreaks successfully. Methods Using a longitudinal trend analysis study design, we extracted 62 days of COVID-19 data from Canadian public health registries for 13 provinces and territories. We used an empirical difference equation to measure the daily number of cases in Canada as a function of the prior number of cases, the level of testing, and weekly shift variables based on a dynamic panel model that was estimated using the generalized method of moments approach by implementing the Arellano-Bond estimator in R. Results We compare the week of February 7-13, 2021, with the week of February 14-20, 2021. Canada, as a whole, had a decrease in speed from 8.4 daily new cases per 100,000 population to 7.5 daily new cases per 100,000 population. The persistence of new cases during the week of February 14-20 reported 7.5 cases that are a result of COVID-19 transmissions 7 days earlier. The two most populous provinces of Ontario and Quebec both experienced decreases in speed from 7.9 and 11.5 daily new cases per 100,000 population for the week of February 7-13 to speeds of 6.9 and 9.3 for the week of February 14-20, respectively. Nunavut experienced a significant increase in speed during this time, from 3.3 daily new cases per 100,000 population to 10.9 daily new cases per 100,000 population. Conclusions Canada excelled at COVID-19 control early on in the pandemic, especially during the first COVID-19 shutdown. The second wave at the end of 2020 resulted in a resurgence of the outbreak, which has since been controlled. Enhanced surveillance identifies outbreaks and where there is the potential for explosive growth, which informs proactive health policy.
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Lee, Huay Huay, Siong Hook Law, and W. N. W. Azman-Saini. "Effects of Financial Development and Institutions On Firm Growth in Malaysia." 11th GLOBAL CONFERENCE ON BUSINESS AND SOCIAL SCIENCES 11, no. 1 (December 9, 2020): 50. http://dx.doi.org/10.35609/gcbssproceeding.2020.11(50).
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This study is motivated by Modigliani and Miller's (1958) financing constraints theory (FCT) and others like Rajan and Zingales (1998), Fisman and Love (2007), and Manganelli and Popov (2013) also sharing similar enthusiasm that firm growth are dependence on access to external finance but subject to macroeconomic environment. Using firm-level data from firms listed in Bursa Malaysia for 2006-2014 period, the study applies dynamic panel system generalized method of moments (GMM) estimation (Blundell and Bond, 1998) to estimate how a country's embedded financial development and institutional quality impacts the linkage of firms' external financial dependence and growth opportunities to firm growth. A dynamic system GMM approach is employed to address the endogeneity and serial correlation concern. Firms which have greater growth opportunities actually grow faster with better financial development with embedded good institutions in the case of Malaysia. So findings concluded that firms experience higher growth through better allocation of finance since they have good potential to grow. This has shed important lights to policymakers in formulating the design of many financial development policies across a wide set of countries aimed at fostering financial markets and banking services sector to provide the vital sources of external financing needed by corporations in financing their investments. A well-functioning financial systems is a necessary condition for promoting firm growth. Keywords:Firm growth; financial development; institutions; external financial dependence; growth opportunities
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Usman, Ojonugwa, and Umoru Adejo Yakubu. "An investigation of the post-privatization firms’ financial performance in Nigeria: the role of corporate governance practices." Corporate Governance: The International Journal of Business in Society 19, no. 3 (June 3, 2019): 404–18. http://dx.doi.org/10.1108/cg-05-2018-0190.
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Purpose The purpose of this study is to investigate the role of corporate governance practices on the post-privatization financial performance of the firms listed on the Nigerian Stock Exchange (NSE) over the period 2005-2014. Design/methodology/approach The study uses a two-step dynamic system Generalized Method of Moments (GMM) estimation technique for 27 privatized firms by considering a wide range of controlled variables such as managerial shareholdings, board composition, debt financing and stock market development. Findings The empirical result suggests that the improvement in the firms’ financial performance is attributed to good corporate governance practices through effective board composition, debt financing (leverage) and stock market development. The result further shows no substantial evidence to support that managerial shareholding improves firms’ financial performance. Research limitations/implications Therefore, based on the empirical findings of this study, the authors recommend that the firms need to maintain the optimum board composition and the ratio of debt to share capital as well as developing the stock market to function effectively. Originality/value This study contributes to the existing literature in several ways: (1) the first time that the role of corporate governance is considered in explaining the post-privatization financial performance of firms listed on the Nigerian Stock Exchange; (2) the paper applies a two-step dynamic system GMM estimation technique, proposed by Arellano and Bover (1995) and Blundell and Bond (1998) to control for the serial correlation and heterogeneity, which remain the major weaknesses of the panel data modeling in the literature.
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Soetanto, Tessa, and Pei Fun Liem. "Intellectual capital in Indonesia: dynamic panel approach." Journal of Asia Business Studies 13, no. 2 (March 21, 2019): 240–62. http://dx.doi.org/10.1108/jabs-02-2018-0059.
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Purpose Intellectual capital (IC) has been considered as a valuable asset in the wealth creation and sustainability of the company; however, limited and mixed results are found on its impact on firm financial performance and market value (MV). This paper aims to investigate the influence of IC toward MV and financial performance of publicly listed firms in Indonesia. In addition, this research also presents the comparison of the high and low level of knowledge industries regarding IC performance. Design/methodology/approach A balanced panel data of 127 firms from 12 industries in Indonesia during 2010 until 2017 was evaluated using dynamic panel regression and administering a well-developed Blundell–Bond instrument (dynamic panel data estimator) to account for endogeneity problem. Findings The results of this study showed that IC had a significant and positive impact on firm performance. Specifically, structural capital efficiency and capital employed (CE) efficiency have been contributed to the value creation of the company, after controlling for firm size and type of industry. Different to the theoretical expectation, this research found no significant relationship between IC and MV of the firm. However, when the sample was clustered into high-level and low-level knowledge industry, CE displayed positive and significant relationship in high-level industry. Originality/value This research contributes to IC research by having a larger sample of Indonesian firms from all industries except banks and financial institutions and using Modified Value Added Intellectual Capital measurement model. To address the endogeneity problem, dynamic panel regression using system generalized method of moment was applied.
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Cancela, Beatriz Lopes, Maria Elisabete Duarte Neves, Lúcia Lima Rodrigues, and António Carlos Gomes Dias. "The influence of corporate governance on corporate sustainability: new evidence using panel data in the Iberian macroeconomic environment." International Journal of Accounting & Information Management 28, no. 4 (August 3, 2020): 785–806. http://dx.doi.org/10.1108/ijaim-05-2020-0068.
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Purpose In the macroeconomic environment of the Iberian Peninsula, this paper aims to examine the influence of corporate governance characteristics on corporate sustainability performance. The purpose of this paper is to address corporate practices while determining which corporate governance characteristics can improve corporate sustainability, considering, for this purpose, three dimensions of sustainability: economic, environmental and social. Design/methodology/approach This sample comprises 99 non-financial companies of the Iberian Peninsula, during the 2013–2017 period. The authors have used the panel data methodology, specifically the generalized method of moments (GMM) estimation method proposed by Arellano and Bover (1995) and Blundell and Bond (1998) to test the hypotheses formulated. Findings The results obtained have shown that corporate sustainability performance is affected differently depending on the sustainability dimension that is considered. Specifically, the economic dimension is determined by public debt, the board size, board diversity and the existence of an audit committee. Regarding the environmental dimension, the board size and the presence of the audit committee, as well the corporate social responsibility committee, are the most important determinants. Finally, the social dimension was influenced by the board size, audit committee and the control variable of capital structure, which means that in this dimension, the sources of financing used by the company also help in determining its levels of social concern. Originality/value To the best of the authors’ knowledge, this is the first time that a study has been carried out in the Iberian Peninsula on the corporate sustainability using GMM-system model for three dimensions of sustainability. Corporate sustainability depends on external and internal factors of companies. Therefore, regulators and managers should realize that they will have to be more effective in their statements.
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Neves, Maria Elisabete, Zélia Serrasqueiro, António Dias, and Cristina Hermano. "Capital structure decisions in a period of economic intervention." International Journal of Accounting & Information Management 28, no. 3 (March 9, 2020): 465–95. http://dx.doi.org/10.1108/ijaim-08-2019-0094.
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Purpose This paper aims to analyse the Portuguese companies’ determinants of capital structure. To reach this objective, the authors used data from 37 non-financial Portuguese large enterprises and from 4,233 non-financial small and medium enterprises for the period 2010-2016. Additionally, the authors selected a sub-period from 2010 to 2014 for a deeper understanding of the impact of the sovereign debt crisis and the Economic Adjustment Programme of Troika on the capital structure of those companies. Design/methodology/approach Three dependent variables were tested according to debt maturity, and a dynamic panel data model, namely, the generalised method of moments system estimator, was used to test the formulated research hypotheses following Arellano and Bover (1995) and Blundell and Bond (1998) to capture the dynamic nature of the firm’s capital structure decisions. Findings In general, the results point out that the capital structure decisions depend on a set of firm-specific factors, and that the effects of the determinants of the debt maturity ratios differ according to the type of firm, i.e. large/small firms, and the economic cycle. Originality/value To the best of the authors’ knowledge, this is the first study that has been carried out in Portugal by using two samples of large and small companies for analysing the effects of the Economic Adjustment Programme of Troika on the capital structure of companies. The authors seek to understand which type of companies suffered more because of the effects of the Economic Adjustment Programme of Troika during this period, and which are the capital structure determinants that present greater change. Contrary to what might be expected, large companies are the firms that suffer most from the Economic Adjustment Programme. Probably, because these companies are the most immediate, most scrutinised and those that must show abroad that the bank did not fund them in the long term, because of the imposition and limits to grant credit faced by the banks themselves.
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Oehmke, James Francis, Charles B. Moss, Lauren Nadya Singh, Theresa Bristol Oehmke, and Lori Ann Post. "Dynamic Panel Surveillance of COVID-19 Transmission in the United States to Inform Health Policy: Observational Statistical Study." Journal of Medical Internet Research 22, no. 10 (October 5, 2020): e21955. http://dx.doi.org/10.2196/21955.
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Background The Great COVID-19 Shutdown aimed to eliminate or slow the spread of SARS-CoV-2, the virus that causes COVID-19. The United States has no national policy, leaving states to independently implement public health guidelines that are predicated on a sustained decline in COVID-19 cases. Operationalization of “sustained decline” varies by state and county. Existing models of COVID-19 transmission rely on parameters such as case estimates or R0 and are dependent on intensive data collection efforts. Static statistical models do not capture all of the relevant dynamics required to measure sustained declines. Moreover, existing COVID-19 models use data that are subject to significant measurement error and contamination. Objective This study will generate novel metrics of speed, acceleration, jerk, and 7-day lag in the speed of COVID-19 transmission using state government tallies of SARS-CoV-2 infections, including state-level dynamics of SARS-CoV-2 infections. This study provides the prototype for a global surveillance system to inform public health practice, including novel standardized metrics of COVID-19 transmission, for use in combination with traditional surveillance tools. Methods Dynamic panel data models were estimated with the Arellano-Bond estimator using the generalized method of moments. This statistical technique allows for the control of a variety of deficiencies in the existing data. Tests of the validity of the model and statistical techniques were applied. Results The statistical approach was validated based on the regression results, which determined recent changes in the pattern of infection. During the weeks of August 17-23 and August 24-30, 2020, there were substantial regional differences in the evolution of the US pandemic. Census regions 1 and 2 were relatively quiet with a small but significant persistence effect that remained relatively unchanged from the prior 2 weeks. Census region 3 was sensitive to the number of tests administered, with a high constant rate of cases. A weekly special analysis showed that these results were driven by states with a high number of positive test reports from universities. Census region 4 had a high constant number of cases and a significantly increased persistence effect during the week of August 24-30. This change represents an increase in the transmission model R value for that week and is consistent with a re-emergence of the pandemic. Conclusions Reopening the United States comes with three certainties: (1) the “social” end of the pandemic and reopening are going to occur before the “medical” end even while the pandemic is growing. We need improved standardized surveillance techniques to inform leaders when it is safe to open sections of the country; (2) varying public health policies and guidelines unnecessarily result in varying degrees of transmission and outbreaks; and (3) even those states most successful in containing the pandemic continue to see a small but constant stream of new cases daily.
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Post, Lori, Ramael O. Ohiomoba, Ashley Maras, Sean J. Watts, Charles B. Moss, Robert Leo Murphy, Michael G. Ison, et al. "Latin America and the Caribbean SARS-CoV-2 Surveillance: Longitudinal Trend Analysis." JMIR Public Health and Surveillance 7, no. 4 (April 27, 2021): e25728. http://dx.doi.org/10.2196/25728.
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Background The COVID-19 pandemic has placed unprecedented stress on economies, food systems, and health care resources in Latin America and the Caribbean (LAC). Existing surveillance provides a proxy of the COVID-19 caseload and mortalities; however, these measures make it difficult to identify the dynamics of the pandemic and places where outbreaks are likely to occur. Moreover, existing surveillance techniques have failed to measure the dynamics of the pandemic. Objective This study aimed to provide additional surveillance metrics for COVID-19 transmission to track changes in the speed, acceleration, jerk, and persistence in the transmission of the pandemic more accurately than existing metrics. Methods Through a longitudinal trend analysis, we extracted COVID-19 data over 45 days from public health registries. We used an empirical difference equation to monitor the daily number of cases in the LAC as a function of the prior number of cases, the level of testing, and weekly shift variables based on a dynamic panel model that was estimated using the generalized method of moments approach by implementing the Arellano–Bond estimator in R. COVID-19 transmission rates were tracked for the LAC between September 30 and October 6, 2020, and between October 7 and 13, 2020. Results The LAC saw a reduction in the speed, acceleration, and jerk for the week of October 13, 2020, compared to the week of October 6, 2020, accompanied by reductions in new cases and the 7-day moving average. For the week of October 6, 2020, Belize reported the highest acceleration and jerk, at 1.7 and 1.8, respectively, which is particularly concerning, given its high mortality rate. The Bahamas also had a high acceleration at 1.5. In total, 11 countries had a positive acceleration during the week of October 6, 2020, whereas only 6 countries had a positive acceleration for the week of October 13, 2020. The TAC displayed an overall positive trend, with a speed of 10.40, acceleration of 0.27, and jerk of –0.31, all of which decreased in the subsequent week to 9.04, –0.81, and –0.03, respectively. Conclusions Metrics such as new cases, cumulative cases, deaths, and 7-day moving averages provide a static view of the pandemic but fail to identify where and the speed at which SARS-CoV-2 infects new individuals, the rate of acceleration or deceleration of the pandemic, and weekly comparison of the rate of acceleration of the pandemic indicate impending explosive growth or control of the pandemic. Enhanced surveillance will inform policymakers and leaders in the LAC about COVID-19 outbreaks.
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Bougatef, Khemaies, and Fakhri Korbi. "The determinants of intermediation margins in Islamic and conventional banks." Managerial Finance 44, no. 6 (June 11, 2018): 704–21. http://dx.doi.org/10.1108/mf-11-2016-0327.
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Purpose The distinctive feature of Islamic financial intermediation is its foundation on profit-and-loss sharing which reinforces solidarity and fraternity between partners. Thus, the bank margin and its determinants may differ between Islamic and conventional banks (CBs). The purpose of this paper is to empirically assess the main factors that explain the bank margin in a panel of Islamic and CBs operating in the Middle East and North Africa (MENA) region. This study will permit to identify the common and the specific determinants of the intermediation margins in dual banking systems. Design/methodology/approach The authors use a dynamic panel approach. The empirical analysis is carried out for a sample of 50 Islamic banks (IBs) and 126 CBs from 14 MENA countries. Findings The results reveal that net profit margins of IBs may be explained for the most part by risk aversion, inefficiency, diversification and economic conditions. With regard to CBs, their margins depend positively on market concentration and risk aversion and negatively on specialization, diversification, inefficiency and liquidity. Practical implications The significant impact of the degree of diversification on margins suggests that any policy analysis of the pricing behavior of banks should rely on its whole output. The high levels of margins in Islamic and CBs based in the MENA region may represent an obstacle to these countries to pursue their development process. Thus, policy makers in these countries should consolidate the role of capital markets and nonbanking financial institutions to provide alternative sources of funding and stimulate more competition. Social implications The positive relationship between concentration and net interest margins requires that policy makers should create competitive conditions if they want to lower the social cost of financial intermediation. The creation of competitive conditions may be achieved through encouraging the establishment of new domestic banks or the penetration of foreign banks. Originality/value The present study aims to contribute to the existing literature on the determinants of bank margins in three ways. First, the authors identify the factors that most explain bank margins for both conventional and IBs. The majority of previous studies examine the determinants of the profitability or the overall performance of banks and in particular conventional ones. Second, this paper employs two generalized method of moments (GMM) approaches introduced by Arellano and Bover (1995) and Arellano and Bond (1991). It differs from Hutapea and Kasri (2010) who employed the co-integration technique to examine the long-run relationship between Islamic and CB margins and their determinants in Indonesia. Third, unlike previous studies focusing on MENA region that use a small number of countries and a short sample period, the period of study covers 16 years from 1999 to 2014 and a large sample of countries (14 countries). This paper differs from Lee and Isa (2017) who applied the dynamic two-step GMM estimator technique introduced by Arellano and Bond (1991) to study the determinants of intermediation margins of Islamic and CBs located in Malaysia.
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Post, Lori Ann, Jasmine S. Lin, Charles B. Moss, Robert Leo Murphy, Michael G. Ison, Chad J. Achenbach, Danielle Resnick, et al. "SARS-CoV-2 Wave Two Surveillance in East Asia and the Pacific: Longitudinal Trend Analysis." Journal of Medical Internet Research 23, no. 2 (February 1, 2021): e25454. http://dx.doi.org/10.2196/25454.
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Background The COVID-19 pandemic has had a profound global impact on governments, health care systems, economies, and populations around the world. Within the East Asia and Pacific region, some countries have mitigated the spread of the novel coronavirus effectively and largely avoided severe negative consequences, while others still struggle with containment. As the second wave reaches East Asia and the Pacific, it becomes more evident that additional SARS-CoV-2 surveillance is needed to track recent shifts, rates of increase, and persistence associated with the pandemic. Objective The goal of this study is to provide advanced surveillance metrics for COVID-19 transmission that account for speed, acceleration, jerk, persistence, and weekly shifts, to better understand country risk for explosive growth and those countries who are managing the pandemic successfully. Existing surveillance coupled with our dynamic metrics of transmission will inform health policy to control the COVID-19 pandemic until an effective vaccine is developed. We provide novel indicators to measure disease transmission. Methods Using a longitudinal trend analysis study design, we extracted 330 days of COVID-19 data from public health registries. We used an empirical difference equation to measure the daily number of cases in East Asia and the Pacific as a function of the prior number of cases, the level of testing, and weekly shift variables based on a dynamic panel model that was estimated using the generalized method of moments approach by implementing the Arellano-Bond estimator in R. Results The standard surveillance metrics for Indonesia, the Philippines, and Myanmar were concerning as they had the largest new caseloads at 4301, 2588, and 1387, respectively. When looking at the acceleration of new COVID-19 infections, we found that French Polynesia, Malaysia, and the Philippines had rates at 3.17, 0.22, and 0.06 per 100,000. These three countries also ranked highest in terms of jerk at 15.45, 0.10, and 0.04, respectively. Conclusions Two of the most populous countries in East Asia and the Pacific, Indonesia and the Philippines, have alarming surveillance metrics. These two countries rank highest in new infections in the region. The highest rates of speed, acceleration, and positive upwards jerk belong to French Polynesia, Malaysia, and the Philippines, and may result in explosive growth. While all countries in East Asia and the Pacific need to be cautious about reopening their countries since outbreaks are likely to occur in the second wave of COVID-19, the country of greatest concern is the Philippines. Based on standard and enhanced surveillance, the Philippines has not gained control of the COVID-19 epidemic, which is particularly troubling because the country ranks 4th in population in the region. Without extreme and rigid social distancing, quarantines, hygiene, and masking to reverse trends, the Philippines will remain on the global top 5 list of worst COVID-19 outbreaks resulting in high morbidity and mortality. The second wave will only exacerbate existing conditions and increase COVID-19 transmissions.
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Post, Lori Ann, Salem T. Argaw, Cameron Jones, Charles B. Moss, Danielle Resnick, Lauren Nadya Singh, Robert Leo Murphy, et al. "A SARS-CoV-2 Surveillance System in Sub-Saharan Africa: Modeling Study for Persistence and Transmission to Inform Policy." Journal of Medical Internet Research 22, no. 11 (November 19, 2020): e24248. http://dx.doi.org/10.2196/24248.
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Background Since the novel coronavirus emerged in late 2019, the scientific and public health community around the world have sought to better understand, surveil, treat, and prevent the disease, COVID-19. In sub-Saharan Africa (SSA), many countries responded aggressively and decisively with lockdown measures and border closures. Such actions may have helped prevent large outbreaks throughout much of the region, though there is substantial variation in caseloads and mortality between nations. Additionally, the health system infrastructure remains a concern throughout much of SSA, and the lockdown measures threaten to increase poverty and food insecurity for the subcontinent’s poorest residents. The lack of sufficient testing, asymptomatic infections, and poor reporting practices in many countries limit our understanding of the virus’s impact, creating a need for better and more accurate surveillance metrics that account for underreporting and data contamination. Objective The goal of this study is to improve infectious disease surveillance by complementing standardized metrics with new and decomposable surveillance metrics of COVID-19 that overcome data limitations and contamination inherent in public health surveillance systems. In addition to prevalence of observed daily and cumulative testing, testing positivity rates, morbidity, and mortality, we derived COVID-19 transmission in terms of speed, acceleration or deceleration, change in acceleration or deceleration (jerk), and 7-day transmission rate persistence, which explains where and how rapidly COVID-19 is transmitting and quantifies shifts in the rate of acceleration or deceleration to inform policies to mitigate and prevent COVID-19 and food insecurity in SSA. Methods We extracted 60 days of COVID-19 data from public health registries and employed an empirical difference equation to measure daily case numbers in 47 sub-Saharan countries as a function of the prior number of cases, the level of testing, and weekly shift variables based on a dynamic panel model that was estimated using the generalized method of moments approach by implementing the Arellano-Bond estimator in R. Results Kenya, Ghana, Nigeria, Ethiopia, and South Africa have the most observed cases of COVID-19, and the Seychelles, Eritrea, Mauritius, Comoros, and Burundi have the fewest. In contrast, the speed, acceleration, jerk, and 7-day persistence indicate rates of COVID-19 transmissions differ from observed cases. In September 2020, Cape Verde, Namibia, Eswatini, and South Africa had the highest speed of COVID-19 transmissions at 13.1, 7.1, 3.6, and 3 infections per 100,0000, respectively; Zimbabwe had an acceleration rate of transmission, while Zambia had the largest rate of deceleration this week compared to last week, referred to as a jerk. Finally, the 7-day persistence rate indicates the number of cases on September 15, 2020, which are a function of new infections from September 8, 2020, decreased in South Africa from 216.7 to 173.2 and Ethiopia from 136.7 to 106.3 per 100,000. The statistical approach was validated based on the regression results; they determined recent changes in the pattern of infection, and during the weeks of September 1-8 and September 9-15, there were substantial country differences in the evolution of the SSA pandemic. This change represents a decrease in the transmission model R value for that week and is consistent with a de-escalation in the pandemic for the sub-Saharan African continent in general. Conclusions Standard surveillance metrics such as daily observed new COVID-19 cases or deaths are necessary but insufficient to mitigate and prevent COVID-19 transmission. Public health leaders also need to know where COVID-19 transmission rates are accelerating or decelerating, whether those rates increase or decrease over short time frames because the pandemic can quickly escalate, and how many cases today are a function of new infections 7 days ago. Even though SSA is home to some of the poorest countries in the world, development and population size are not necessarily predictive of COVID-19 transmission, meaning higher income countries like the United States can learn from African countries on how best to implement mitigation and prevention efforts. International Registered Report Identifier (IRRID) RR2-10.2196/21955
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Miao, Ruiqing. "Impact of Ethanol Plants on Local Land Use Change." Agricultural and Resource Economics Review 42, no. 2 (August 2013): 291–309. http://dx.doi.org/10.1017/s106828050000438x.
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We investigate effects of corn-based ethanol plants on local land uses using county-level panel data for Iowa for 1997 through 2009 and an Arellano-Bond difference-generalized method-of-moments estimator. Our results show that ethanol plants have statistically significant effects on the proportion of acres planted to corn in the plants’ host counties. Furthermore, ceteris paribus, the land-use-change effect of locally owned plants (owned by local farmers or cooperatives) is about twice as large as the effect of plants with nonlocal owners. We also explore implications for the environment of ethanol plants and the changes in land use that they induce.
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Hayakawa, Kazuhiko. "THE ASYMPTOTIC PROPERTIES OF THE SYSTEM GMM ESTIMATOR IN DYNAMIC PANEL DATA MODELS WHEN BOTH N AND T ARE LARGE." Econometric Theory 31, no. 3 (September 15, 2014): 647–67. http://dx.doi.org/10.1017/s0266466614000449.
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In this paper, we derive the asymptotic properties of the system generalized method of moments (GMM) estimator in dynamic panel data models with individual and time effects when both N and T, the dimensions of cross-section and time series, are large. Specifically, we show that the two-step system GMM estimator is consistent when a suboptimal weighting matrix where off-diagonal blocks are set to zero is used. Such consistency results theoretically support the use of the system GMM estimator in large N and T contexts even though it was originally developed for large N and small T panels. Simulation results indicate that the large N and large T asymptotic results approximate the finite sample behavior reasonably well unless persistency of data is strong and/or the variance ratio of individual effects to the disturbances is large.
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Rovigatti, Gabriele, and Vincenzo Mollisi. "Theory and Practice of Total-Factor Productivity Estimation: The Control Function Approach using Stata." Stata Journal: Promoting communications on statistics and Stata 18, no. 3 (September 2018): 618–62. http://dx.doi.org/10.1177/1536867x1801800307.
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Alongside instrumental-variables and fixed-effects approaches, the control function approach is the most widely used in production function estimation. Olley and Pakes (1996, Econometrica 64: 1263–1297), Levinsohn and Petrin (2003, Review of Economic Studies 70: 317–341), and Ackerberg, Caves, and Frazer (2015, Econometrica 83: 2411–2451) have all contributed to the field by proposing two-step estimation procedures, whereas Wooldridge (2009, Economics Letters 104: 112–114) showed how to perform a consistent estimation within a single-step generalized method of moments framework. In this article, we propose a new estimator based on Wooldridge's estimation procedure, using dynamic panel instruments à la Blundell and Bond (1998, Journal of Econometrics 87: 115–143), and we evaluate its performance by using Monte Carlo simulations. We also present the new command prodest for production function estimation, and we show its main features and strengths in a comparative analysis with other community-contributed commands. Finally, we provide evidence of the numerical challenges faced when using the Olley–Pakes and Levinsohn–Petrin estimators with the Ackerberg–Caves–Frazer correction in empirical applications, and we document how the generalized method of moments estimates vary depending on the optimizer or starting points used.
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ADJEI-FRIMPONG, KOFI, CHRISTOPHER GAN, and BAIDING HU. "EFFICIENCY AND COMPETITION IN THE GHANAIAN BANKING INDUSTRY: A PANEL GRANGER CAUSALITY APPROACH." Annals of Financial Economics 08, no. 01 (June 2013): 1350004. http://dx.doi.org/10.1142/s2010495213500048.
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This study examines the causal link between bank efficiency and bank competition. The study estimates bank competition with the Lerner index and bank cost efficiency with data envelopment analysis using annual data over the period 2001–2010. Using system generalized method of moments (system GMM) estimator, the results suggest that bank cost efficiency positively Granger-causes market power and hence causality negatively runs from bank cost efficiency to bank competition indicating that bank cost efficiency precedes bank competition. However, the reverse causality running from bank competition to bank cost efficiency is not supported.
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Akram, Vaseem, and Badri Narayan Rath. "DOES EXPORT DIVERSIFICATION LEAD TO INCOME CONVERGENCE? EVIDENCE FROM CROSS-COUNTRY ANALYSIS." Buletin Ekonomi Moneter dan Perbankan 23, no. 3 (December 2, 2020): 319–46. http://dx.doi.org/10.21098/bemp.v23i3.1251.
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In this study, we examine the role of export diversification in the convergence of per capita income (output). By applying the dynamic system Generalized Method of Moments (GMM) estimator to a panel dataset consisting of 95 countries, we find evidence of both absolute and conditional divergence for the full sample and the subsamples based on income and regions. Thus, our findings suggest that, although high export diversification boosts the per capita income (output), it does not significantly reduce per capita income (output) gap between rich and poor countries.
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Han, Chirok, Peter C. B. Phillips, and Donggyu Sul. "X-DIFFERENCING AND DYNAMIC PANEL MODEL ESTIMATION." Econometric Theory 30, no. 1 (August 7, 2013): 201–51. http://dx.doi.org/10.1017/s0266466613000170.
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This paper introduces a new estimation method for dynamic panel models with fixed effects and AR(p) idiosyncratic errors. The proposed estimator uses a novel form of systematic differencing, called X-differencing, that eliminates fixed effects and retains information and signal strength in cases where there is a root at or near unity. The resulting “panel fully aggregated” estimator (PFAE) is obtained by pooled least squares on the system of X-differenced equations. The method is simple to implement, consistent for all parameter values, including unit root cases, and has strong asymptotic and finite sample performance characteristics that dominate other procedures, such as bias corrected least squares, generalized method of moments (GMM), and system GMM methods. The asymptotic theory holds as long as the cross section (n) or time series (T) sample size is large, regardless of then/Tratio, which makes the approach appealing for practical work. In the time series AR(1) case (n= 1), the FAE estimator has a limit distribution with smaller bias and variance than the maximum likelihood estimator (MLE) when the autoregressive coefficient is at or near unity and the same limit distribution as the MLE in the stationary case, so the advantages of the approach continue to hold for fixed and even smalln. Some simulation results are reported, giving comparisons with other dynamic panel estimation methods.
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Nadirov, Orkhan, Jana Vychytilová, and Bruce Dehning. "Carbon Taxes and the Composition of New Passenger Car Sales in Europe." Energies 13, no. 18 (September 6, 2020): 4631. http://dx.doi.org/10.3390/en13184631.
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This paper examines the effectiveness of implementing carbon taxes to reduce carbon dioxide emissions from transport. Using the system Generalized Method of Moments estimator, we utilize cross-country analysis for the first time to study the impact of carbon taxes on the composition of petrol versus diesel passenger cars sold in 17 countries over the period 2013–2017. The results suggest that increasing carbon taxes affects consumer behavior, causing a significant shift from petrol to diesel fuel vehicles, controlling for factors such as the price of passenger cars, fuel price, interest rates, income level, population density, inflation, and vehicle stock.
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Wong, Zi Wen Vivien, Fanyu Chen, and Thian Hee Yiew. "EFFECTS OF RENT-SEEKING ON ECONOMIC GROWTH IN LOW-INCOME ECONOMIES." Buletin Ekonomi Moneter dan Perbankan 24, no. 2 (June 30, 2021): 205–20. http://dx.doi.org/10.21098/bemp.v24i2.1386.
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Sluggish growth in low-income countries, despite the high performance in other economic indicators, motivates the literature to switch attention to institutions. Despite its crucial economic implications, there is limited attention on rent-seeking as a driver of economic growth in low-income countries. This paper investigates the effect of rent-seeking on growth in low-income countries from 2004 to 2017using the system generalized method of moments estimator. The empirical results reveal that rent-seeking negatively affects growth, implying that it obstructs the pace of economic development in low-income countries. Hence, it is necessary for policymakers in these countries to adopt anti-rent-seeking policies to promote a rapid and sustainable growth.
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Tan, Yong, and John Anchor. "Stability and profitability in the Chinese banking industry: evidence from an auto-regressive-distributed linear specification." Investment Management and Financial Innovations 13, no. 4 (December 15, 2016): 120–29. http://dx.doi.org/10.21511/imfi.13(4).2016.10.
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The important role played by the Chinese commercial banks in the development of China’s economy has made the government and banking regulatory authority concerned about the performance of these banks.Indeedthe stability of the banking sector has attracted greater attention since the financial crisis of 2007-2009. The principal objective of this study is to investigate the inter-relationships between profitability and stability in the Chinese banking industry. Using a sample of Chinese commercial banks over the period 2003-2013, the study examines the inter-relationships under an auto-regressive-distributed linear model. Both Z-score and stability inefficiency were used as measures of stability, while Return on Assets (ROA) was used as the indicator of profitability. Different types of Generalized Method of Moments (GMM) estimators including difference GMM, one-step system GMM, two-step system GMM as well as two-step robust GMM were used. In order to the check the robustness of the results, alternative econometric techniques were used, such as ordinary least square (OLS) estimator, between effect estimator, as well as fixed effect estimator. The results show that higher insolvency risk/lower bank stability leads to higher profitability of Chinese commercial banks and also that higher profitability leads to higher bank fragility. Keywords: bank profitability, bank risk, China. JEL classification: G21, C23
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Al Farooque, Omar, Wonlop Buachoom, and Lan Sun. "Board, audit committee, ownership and financial performance – emerging trends from Thailand." Pacific Accounting Review 32, no. 1 (December 21, 2019): 54–81. http://dx.doi.org/10.1108/par-10-2018-0079.
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Purpose This study aims to investigate the effects of corporate board and audit committee characteristics and ownership structures on market-based financial performance of listed firms in Thailand. Design/methodology/approach It applies system GMM (generalized method of moments) as the baseline estimator approach, and ordinary least squares and fixed effects for robustness checks on a sample of 452 firms listed on the Thai Stock Exchange for the period 2000-2016. Findings Relying mainly on the system GMM estimator, the empirical results indicate some emerging trends in the Thai economy. Contrary to expectations for an emerging market and prior research findings, ownership structures, particularly ownership concentration and family ownership, appear to have no significant influence on market-based firm performance, while managerial ownership exerts a positive effect on performance. Moreover, as expected, board structure variables such as board independence; size; meeting and dual role; and audit committee meeting show significant explanatory power on market-based firm performance in Thai firms. Practical implications These findings are important for policymakers in constructing an appropriate set of governance mechanisms in an emerging market context, and for corporate entities and investors in shaping their understanding of corporate governance in the Thai institutional context. Originality/value Unlike previous literature on the Thai market, this study is the first to use the more advanced econometric method known as system GMM estimator for addressing causality/endogeneity issues in governance–performance relationships. The findings indicate new trends in the explanatory power of ownership structure variables on market-based firm performance in Thai-listed firms.
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Luu, Hiep Ngoc, Ngoc Minh Nguyen, Hai Hong Ho, and Vu Hoang Nam. "The effect of corruption on FDI and its modes of entry." Journal of Financial Economic Policy 11, no. 2 (May 7, 2019): 232–50. http://dx.doi.org/10.1108/jfep-05-2018-0075.
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Purpose The purpose of this paper is to empirically investigate the impact of corruption on foreign direct investment (FDI) and its two major modes of entry: greenfield investment (greenfield) and cross-border mergers and acquisitions (M&As). Design/methodology/approach Data are collected from 131 countries. Modern econometric techniques, including the generalized method of moments (GMM) estimator, two-stage least square estimator and two-step system GMM estimator, are used to evaluate the impact of corruption on FDI activities. Findings The empirical results illustrate that corruption is a deterioration factor that significantly hinders FDI inflows. However, this finding turns out to be contradictory when the two major components of FDI – greenfield investment and cross-border M&As – are separately examined. Specifically, while corruption consistently discourages cross-border M&As over time, it appears to exert positive effect on greenfield investments. Originality/value This is among the first to empirically examine the impact of corruption on FDI and its modes of entry in a number of countries spanning different time windows. In this sense, this paper also captures the changing nature of societies and economic conditions overtime and, therefore, enable academic researchers, policy-makers and business practitioners to draw broad inferences from the empirical results.
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Maličká, Lenka. "Political Expenditure Cycle at the Municipal Government Level in Slovakia." Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis 67, no. 2 (2019): 503–13. http://dx.doi.org/10.11118/actaun201967020503.
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The idea of the political budget cycle impact on the public expenditure volume and structure raises discussion related mainly to the national government level. Political decision‑making at the sub‑national government level emulates certain common tendencies. In the election time, the political incumbent might seek for re‑election. In aim to increase its own chances, it might manipulate the budget (or fiscal) policy and makes changes in the field of expenditure categories. In this paper, the existence of political expenditure cycle at the municipal level of government in Slovakia is investigated. The dynamic panel data model using the Generalized Method of Moments (GMM) system estimator reveals the positive impact of election year variable on per capita municipal expenditure, while the additional pre‑election year variable is insignificant.
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Jara-Bertin, Mauricio, and Jean P. Sepulveda. "Earnings management and performance in family-controlled firms." Academia Revista Latinoamericana de Administración 29, no. 1 (March 7, 2016): 44–64. http://dx.doi.org/10.1108/arla-08-2015-0229.
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Purpose The purpose of this paper is to introduce an earnings management dimension to compute pre-manipulated accounting performance (free of discretionary accruals) to determine whether family-controlled firms perform better than non-family-controlled firms. Design/methodology/approach The authors used Jones’ model (1991) to obtain a pre-manipulated performance measure for a sample of Chilean firms. The authors then regressed the pre-manipulated measures of accounting performance as dependent variables against the family nature of the largest shareholder using the Blundell and Bond generalized method of moments estimator. Findings The authors found that the pre-manipulated performance of family-controlled firms is superior to that of non-family-controlled firms. The authors also show that the presence of institutional investors in the firm’s ownership structure has a positive influence on the performance of family companies. The results suggest that earnings management behavior is not sufficient to explain the better performance of family-controlled firms that has been reported in the literature. Originality/value The authors provide new evidence regarding the real superior performance of family business. These results provide some degree of confidence to investors since family firms provide good quality earnings measures of financial performance.
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Szarowská, Irena. "Tax Shift by Economic Functions and Its Effect on Economic Growth in the European Union." Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis 63, no. 6 (2015): 2127–35. http://dx.doi.org/10.11118/actaun201563062127.
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The aim of the paper is to examine effects of tax shift on economic growth and provide a direct empirical evidence in the European Union (EU). It is used the Eurostat’s definition to categorize tax burden by economic functions and implicit tax rates of consumption, labour and capital are investigated. First, paper summarizes main development of tax shift in a whole EU till 2014 and followed empirical analysis is based on annual panel data of 22 EU Member States in years 1995–2012 (time span is divided into a pre-crisis and a post-crisis period). Explanatory variables are not examined in individual regressions, but the study uses Generalized Method of Moments applied on dynamic panel data and estimations are based on Arellan-Bond estimator (1991). Results confirm positive and statistically significant impact of consumption taxes and weaker but negative effect of labour taxation on economic growth. In a post-crisis period, findings report raising labour taxes as the strongest and the only significant variable. It suggests that harmful effect of labour taxation is enlarging in a time of unfavorable economic conditions. A tax shift on capital taxation has negative but often statistically insignificant impact on economic growth.
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Simangunsong, Damayanti, and Chen Kuang-Hui. "Inequality and Economic Growth in Indonesia in The 2000’s." Signifikan: Jurnal Ilmu Ekonomi 7, no. 2 (March 25, 2018): 201–12. http://dx.doi.org/10.15408/sjie.v7i2.6177.
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The income inequality in Indonesia reached the highest level during the decentralization era and suspected to be the cause of the slowdown of the economic growth in the last five years to 2015. This paper investigates whether increasing inequality had a positive or negative impact on economic growth in Indonesia. Using dynamic panel and applying Generalized Method of Moments (GMM) estimator, the result concluded that there is a significant positive relationship between income inequality and economic growth. However, this study cannot draw a definite conclusion about the association for the different classes (bottom, middle, and top level) since only one-step system GMM is significant. Based on the result, it implies that the government should be more careful in regulating the inequality policy and understand more about the right mechanism of inequality and economy growth.DOI: 10.15408/sjie.v7i2.6177
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Gluszak, Michal, Agnieszka Malkowska, and Bartłomiej Marona. "Green Building Adoption on Office Markets in Europe: An Empirical Investigation into LEED Certification." Energies 14, no. 7 (April 2, 2021): 1971. http://dx.doi.org/10.3390/en14071971.
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The goal of the paper is to evaluate the impact of selected factors on the adoption of LEED (Leadership in Energy and Environmental Design) green building certification in Europe. In the empirical part of the paper we track the fraction of LEED-registered office space in selected European cities, and assess the impact of selected socioeconomic and environmental factors on the certification adoption rate. This research contributes to the ongoing debate about the adoption of green buildings in commercial property markets. In this paper, we investigate factors affecting the adoption of LEED certification using the Arellano and Bond generalized method-of-moments estimator. Compared to prior studies, which relied on cross-sectional data, our research uses a panel approach to investigate the changes in green building adoption rates in selected European cities. Among the cities that are quickly adopting LEED are Frankfurt, Warsaw, Stockholm, and Dublin. The adoption process was not equally fast in Brussels and Copenhagen. Using the dynamic panel model approach, we found that the adoption of green building certification is linked to overall innovativeness in the economy and the perceived greenness of the city. Contrary to some previous studies we did not observe links between the size of the office market and the LEED adoption rate.
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Huay, Chong Siew, Jonathan Winterton, Yasmin Bani, and Bolaji Tunde Matemilola. "Do remittances promote human development? Empirical evidence from developing countries." International Journal of Social Economics 46, no. 10 (October 20, 2019): 1173–85. http://dx.doi.org/10.1108/ijse-12-2018-0673.
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Purpose The purpose of this paper is to analyse the impact of remittances on human development in developing countries using panel data from 1980 to 2014 and to address the critical question of whether the increasing trend of remittances has any impact on human development in a broad range of developing countries. Design/methodology/approach Usual panel estimates, such as pooled OLS, fixed or random effects model, possess specification issues such as endogeneity, heterogeneity and measurement errors. In this paper, we, therefore, apply dynamic panel estimates – System generalised method of moment (Sys-GMM) developed by Arellano and Bond (1991) and Arellano and Bover (1995). This estimator is able to control for the endogeneity of all the explanatory variables, account for unobserved country-specific effects that cannot be done using country dummies due to the dynamic structure of the model (Azman-Saini et al., 2010). Findings The effect of remittances is statistically significant with positive coefficients in developing countries. The significant coefficient of remittances means that, holding other variables constant, a rise in remittance inflows is associated with improvements in human development. A 10 per cent increase in remittances will lead to an increase of approximately 0.016 per cent in human development. These findings are consistent with Üstubuci and Irdam (2012) and Adenutsi (2010), who found evidence that remittances are positively correlated with human development. Practical implications The paper considers implications for policymakers to justify the need for more effective approaches. Policymakers need to consider indicators of human development and to devise public policies that promote income, health and education, to enhance human development. Originality/value The question of whether remittances affect human development has rarely been subject to systematic empirical study. Extant research does not resolve the endogeneity problem, whereas the present study provides empirical evidence by utilising dynamic panel estimators such as Sys-GMM to tackle the specification issues of endogeneity, measurement errors and heterogeneity. The present study provides a benchmark for future research on the effect of remittances on human development.
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Vazque, Edgar Alfredo Nande, and Juan Carlos Martínez. "Political Budget Cycle: Mexican Town Halls Case." International Journal of Business and Social Research 6, no. 8 (September 1, 2016): 31. http://dx.doi.org/10.18533/ijbsr.v6i8.978.
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<p>In the current economic context, one of the issues of concern is the growth of public spending of municipalities of Mexico and thus increasing public debt. This combines the traditional interest that literature has been devoted to the relationship between economics and politics from the perspective of Political Budget Cycle. The aim of this paper is to analyze the effect of elections in public expenditure management. To this end, a system based on the Generalized Method of Moments (GMM), which uses instrumental variables based on delays and differences of all variables in the model estimator was used. Our findings indicate that there is an expansion of total expenditure, spending on public works and infrastructure and current expenditure contracted work, indicating the preference of politicians for using investment spending to influence voter behavior. The work also notes that citizens value the policies of public expenditure management when making their voting decisions.</p>
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Jara‐Bertin, Mauricio, José Arias Moya, and Arturo Rodríguez Perales. "Determinants of bank performance: evidence for Latin America." Academia Revista Latinoamericana de Administración 27, no. 2 (July 29, 2014): 164–82. http://dx.doi.org/10.1108/arla-04-2013-0030.
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Purpose The purpose of this paper is to analyze the impact of macroeconomic‐industrial and bank‐specific factors on Latin American banks’ performance. Design/methodology/approach Using the data panel system estimator version of the generalized method of moments, the authors estimate the determinants of return on assets and interest margin for a sample of 78 commercial banks from Argentina, Brazil, Chile, Colombia, México, Paraguay, Peru, and Venezuela over the period from 1995 to 2010. Findings On the one hand, the results show that bank performance is positively related to both idiosyncratic factors, such as service diversification, size, capital ratio, and specialization degree, and to macroeconomic‐industrial factors such as economic growth, inflation, and bank concentration. On the other hand, the results show that bank performance is negatively related to credit risk, liquidity risk, and operational inefficiencies. Originality/value The authors provide new evidence from the Latin American bank industry and incorporate the effect of diversification through noninterest activities.
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Tan, Yong, and John Anchor. "Does competition only impact on insolvency risk? New evidence from the Chinese banking industry." International Journal of Managerial Finance 13, no. 3 (June 5, 2017): 332–54. http://dx.doi.org/10.1108/ijmf-06-2016-0115.
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Purpose The purpose of this paper is to investigate the impact of competition on credit risk, liquidity risk, capital risk and insolvency risk in the Chinese banking industry during the period 2003-2013. Design/methodology/approach This study uses a generalized method of moments system estimator to examine the impact of competition on risk. In particular, translog specifications are used to measure the competition and insolvency risk. Findings The results show that greater competition within each bank ownership type (state-owned commercial banks, joint-stock commercial banks and city commercial banks) leads to higher credit risk, higher liquidity risk, higher capital risk, but lower insolvency risk. Originality/value This paper is the first piece of research testing the impact of competition on different types of risk in banking industry and it further contributes to the empirical literature by using a more accurate competition indicator (efficiency-adjusted Lerner index) and a more precise insolvency risk indicator (stability inefficiency).
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Jin, Kyuho, Joowon Lee, and Sung Min Hong. "The Dark Side of Managing for the Long Run: Examining When Family Firms Create Value." Sustainability 13, no. 7 (March 29, 2021): 3776. http://dx.doi.org/10.3390/su13073776.
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Family firms take a substantial fraction of economic activities and significantly influence a nation’s economic sustainability. Despite the considerable amount of research efforts to determine their performance implications, there is still a lack of consensus. This study aims to address this dissensus in two ways. Theory-wise, we introduce two interdependent contingencies that interactively determine the relative strength of positive and negative effects of family involvement: inside chief executive officers (CEOs) and business fluctuations. Method-wise, we employ an advanced econometric technique, the system generalized method of moments (GMM) estimator, to control for endogeneity. Using panel data of Korean family firms listed on the Korea Composite Stock Price Index (KOSPI) stock market during the periods between 2013 and 2016, we find (1) that family firms underperform non-family firms, (2) that the negative effect of family involvement decreases under the management of inside CEOs, and (3) that this positive moderation effect of inside CEOs decreases in the face of business fluctuations. This study furthers our understanding of how the family influences firm performance and, eventually, economic sustainability.
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Nguyen, Thong Trung, Toan Luu Duc Huynh, and Wing-Keung Wong. "Factors Driving Openness in China Trade: Corruption, Exchange Rate Volatility, and Macro Determinants." Review of Pacific Basin Financial Markets and Policies 24, no. 02 (June 2021): 2150016. http://dx.doi.org/10.1142/s0219091521500168.
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Trade openness plays a critical role in the growth of China and its partners. Using a system generalized method of moments (system GMM) estimator and quantile regression, a new viewpoint is presented on trade openness in China for institutional and economic factors over 15 years with 192 economies. The empirical findings provide two contrasting views. Intriguingly, China is seeking to broaden this strategy to countries with less control over corruption and low political stability. By categorizing countries as advanced, emerging, and developing, the study provides the evidence that exchange rate volatility has a negative effect on trade openness, while investment, labor force, and broad money share a positive impact. This study suggests that Chinese policymakers should further boost financial reform to promote trade development. Other countries desirous of greater trade openness with China should have more efficient management of macroscopic economic factors. Finally, the study also examines the two main groups of international offshore financial center from econometric convergence test and club clustering for trade openness in China from the worldwide perspective.
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Fanta, Ashenafi Beyene. "The Finance-Growth Nexus: Evidence from Emerging Markets." Journal of Economics and Behavioral Studies 7, no. 6(J) (December 30, 2015): 13–23. http://dx.doi.org/10.22610/jebs.v7i6(j).614.
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The finance growth literature ignores the role of bond markets in financing private investments. Moreover, the impact of bank crisis on the finance growth link has been largely overlooked. This paper aims at casting light at the finance growth link in emerging economies by accounting for bond markets and controlling for banking sector crises. Data on economic growth and financial development indicators for 15 emerging economies (drawn from Africa, Asia, Latin America, and Europe) were analysed using a system generalized-method-of-moments (GMM) technique. It is observed that while banking sector development is related to economic growth (albeit negatively), no statistically significant relation is observed between stock markets and or bonds markets and economic growth. Moreover, a banking crisis is found to affect the finance growth link in such a manner that the link weakens when a banking crisis is introduced to the model. Our results are robust to omitted variable bias, simultaneity problem, heteroscedasticity and autocorrelation.
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Sulong, Sophee, Qasim Saleem, and Zeeshan Ahmed. "The Role of Stock Market Development in Influencing the Firms Performance: A Study Based on Pakistan Stock Market." International Journal of Economics and Finance 10, no. 12 (November 20, 2018): 104. http://dx.doi.org/10.5539/ijef.v10n12p104.
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The study aims to examine the role of stock market development in influencing the performance of non financial firms listed on Pakistan Stock Exchange from 2001 to 2017. Stock market development is a foremost issue of debate nowadays in emerging and developing economies. The theories and empirical studies strongly refer that stock market development is a tool to mobilize the savings and investment to promote the industrialization and firms performance. This study is an effort to establish the empirical relationship between stock market development and firm’s performance. Three indicators of stock market development like stock market volatility,stock market liquidity and stock market liquidity are used for assessing the book and market performance of firms. For this purpose two-step system Generalized Method of Moments (GMM) estimator was employed in a dynamic panel model for empirical testing of hypothesis. The findings indicates that stock market volatility is a significant factor which which attempts to decrease the firm performance. On the other hand, stock market capitalization and stock market liquidity significantly causes the increase in firm firm performance.
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Mashamba, Tafirei. "The effects of Basel III liquidity regulations on banks’ profitability." Journal of Governance and Regulation 7, no. 2 (2018): 34–48. http://dx.doi.org/10.22495/jgr_v7_i2_p4.
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The new Basel III Liquidity Coverage Ratio standard which encourages banks to maintain a diversified pool of high-quality liquid assets against their short-term expected net cash outflows although it appears to be noble from a theoretic perspective it may weigh down banks’ performance because liquid assets earn low returns. It is against this background that this study sought to evaluate the impact of the new Basel III liquidity regulations on the profitability of banks in emerging market economies. A sample of 40 banks operating in 11 emerging markets over the period 2011 to 2016 was used in the study. For estimation, system Generalized Method of Moments (GMM) estimator was employed. Surprisingly, empirical results demonstrated that regulatory pressure stemming from Liquidity Coverage Ratio requirement increased instead of diminishing the profitability of banks in emerging markets. The plausible explanation given for this evidence was that banks in emerging markets managed their liquidity in a manner that is consistent with Liquidity Coverage Ratio rule hence the regulation had no detrimental effects on banks in emerging economies.
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Fatima, Sumbal, Bateer Chen, Muhammad Ramzan, and Qamar Abbas. "The Nexus Between Trade Openness and GDP Growth: Analyzing the Role of Human Capital Accumulation." SAGE Open 10, no. 4 (October 2020): 215824402096737. http://dx.doi.org/10.1177/2158244020967377.
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The objective of this study is to explore the empirical impact of trade openness on gross domestic product (GDP) growth. Researchers have not given the externalities of trade openness the deserved scholarly attention. In this work, we propose to account for human capital accumulation (HCA) as an additional dimension of economic trade integration. To address the potential endogeneity issue, we use the system generalized method of moments (GMM) estimator developed for dynamic panel data models. The results outline an intriguing indirect relationship between trade openness and GDP growth. If HCA is taken into account as an intervening variable, trade may have a negative impact on GDP growth when countries exhibit a low level of HCA. Thus, the indirect relationship between trade openness and HCA was studied in depth, and to the best of our knowledge, this research is the first to examine this relationship in both developed and developing countries over a 34-year period (1980–2014). The established GMM-centric thresholds are robust to alternative estimation techniques and measurements of trade openness. Policy implications are discussed.
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Lin, Woon Leong. "Is Corporate Political Activity an Investment or Agency? An Application of System GMM Approach." Administrative Sciences 9, no. 1 (January 8, 2019): 5. http://dx.doi.org/10.3390/admsci9010005.
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Corporate political activity (CPA) has been recognized as bearing a significant impact on financial performance (FP). Nevertheless, there has been a lack of considerable research to date. The results of the research regarding the relationship between CPA and FP have been contradictory and this has necessitated further investigation of this relationship. Nonetheless, rather than examining the relationship between CPA and FP, research scholars have revealed that a contingency perspective must be employed for revealing the conditions and the context which enhance the relationship between these two constructs. This study offers a quite distinctive viewpoint with respect to the link between CPA and FP as regards the corporate reputation perspective. For this reason, the study obtained data from the Fortune list of top 100 World Most Admired Companies (WMAC) for the period of 2007 and 2016. This data was utilized to examine the relationship between CPA and FP using the dynamic panel data system GMM (Generalized Method of Moments) estimator. This study finds virtually no support for the hypothesis that lobbying and PACs (political action committees) represent an investment in political capital. Instead, CPA is symptomatic of agency problems within firms. This study also argues that corporate reputation moderates the effect of CPA on the FP and the analysis supports the argument. Our results are particularly useful in light of the reputable corporation, which is greatly to likely increase the use of corporate funds for political contributions.
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Bostanci, Faruk, Eyup Kadioglu, and Guven Sayilgan. "Determinants of Dividend Payout Decisions: A Dynamic Panel Data Analysis of Turkish Stock Market." International Journal of Financial Studies 6, no. 4 (November 20, 2018): 93. http://dx.doi.org/10.3390/ijfs6040093.
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This study analyzes the firm-specific factors affecting the dividend payout decisions of the companies whose shares are traded on the Borsa Istanbul stock exchange. To this end, the dynamic panel regression is applied to 853 observations of yearly average of 106 companies listed on the Borsa Istanbul between 2009 and 2015. According to results from the Arellano–Bover/Blunder-Bond two-step system generalized method of moments, a statistically significant positive effect on dividend payout was found in the relationship between the dividend payout of the previous year, the company’s return on equity and the market value/book value ratio, liquidity and the company’s size. The demonstration of a positive relationship between dividend payout and return on equity supports the free cash flow hypothesis and the positive relationship with the previous year’s dividend payout ratio supports the dividend smoothing hypothesis for Turkey.
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Miao, Miao, Jiang Yushi, and Dinkneh Gebre Borojo. "The Impacts of China–Africa Economic Relation on Factor Productivity of African Countries." Economies 8, no. 2 (June 4, 2020): 47. http://dx.doi.org/10.3390/economies8020047.
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This study attempts to empirically examine the impacts of the China–Africa economic relationship on factor productivity. The two-step system Generalized method of moments (GMM) estimator is applied to analyze the impacts of the Africa–China economic relationship on factor productivity of 44 African countries controlling Africa–China trade, Chinese foreign direct investment (FDI), and aid allocation to African countries for the periods 2003–2017. The estimation strategy controls endogeneity concerns. Another novelty of this study is calculating total factor productivity (TFP) using the regression approach and driving capital stock data. Additionally, the institutional quality index of countries is derived using principal component analysis. The findings of this study refer that the impact of the China–Africa economic relationship on the TFP of African countries is conditional to the domestic institutional quality of African countries. The results imply that the productivity embodied by the Africa–China economic relationship should be backed by the domestic adaptive capacity to use the benefit of China–Africa economic relations to excel factor productivity. Hence, the capability of African countries to benefit from the China–Africa economic relationship to enhance factor productivity should improve the institutional quality.
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Alfada, Anisah. "Does Fiscal Decentralization Encourage Corruption in Local Governments? Evidence from Indonesia." Journal of Risk and Financial Management 12, no. 3 (July 14, 2019): 118. http://dx.doi.org/10.3390/jrfm12030118.
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This study examines the effects of fiscal decentralization on corruption by analyzing whether the degree of fiscal decentralization facilitates or mitigates the number of corruption cases in Indonesia’s local governments. The research utilizes a panel data model and a system Generalized Method of Moments (GMM) estimator to assess the degree of fiscal decentralization on corruption in 19 provinces for the period between 2004 and 2014. The estimation results reveal that the degree of fiscal decentralization, both expenditure and tax revenue sides, drives a growing number of corruption cases in local governments. A lack of human capital capacity, low transparency and accountability, and a higher dependency on intergovernmental grants from the central government may worsen the adverse effects of corruption. Our results suggest that a more heterogeneous population and higher political stability mitigate the adverse effects of corruption. Furthermore, this is the first corruption study in Indonesia to create corruption measures from the number of corruption cases investigated by the Indonesia Corruption Eradication Commission as well as extensive, provincial-level government financial data. As a result of using these different datasets, this research advances existing empirical studies and makes policy recommendations for the local governments in Indonesia.