Foluso Modupe Adeyinka
The effects of a digital technologies uptake on firm efficiency in the Nigerian manufacturing sector were examined. The combined application of data envelopment analysis and the Tobit regression methods were employed to analyze the cross-sectional survey data derived from a sample of manufacturing firms. The research results showed that the uptake of digital technologies was still skewed to the low-end appliances/devices, whereas the uptake of the high-end digital technologies required to forge the digital transformation of firms was still low. Manufacturing firms in Nigeria need to make a quick transition to high-end digital technologies in order for them to increase their efficiency and competitiveness in the global marketplace. Challenges to the uptake of digital technologies need to be addressed as well. The training/retraining of personnel need be scaled up so as to build the digital capacity of the sector, bolster efficiency and improve the productivity of operations. The importation of digital devices may be an option in the short run, but local production should be ramped up in the long run.
Tijana Tubić Ćurčić and Nenad Stanišić
The subject matter of this paper is the analysis of the influence of international migrations on income convergence in European transition countries in the period 2000-2020. Convergence can be defined as the process of catching up richer countries by poorer ones, consequentially leading to the reduction of disparities in income per capita among countries. Theoretically, human migrations are a mechanism of the adjustment of the regional imbalance that contributes to the strengthening of convergence. The regression panel model was used in the research. The research results have shown that, if observed at the level of the entire sample of the countries of Central and Eastern Europe and the Western Balkan countries (CEE-11+WB), there is a positive and statistically significant influence of emigration on income convergence. Also, there is a positive influence of emigration on the income convergence per capita of the CEE-11 countries towards the average income of the developed countries of the EU-15. On the other hand, observed only at the level of the Western Balkan countries, there is no statistically significant influence of emigration on income convergence. The contribution of the research study reflects in filling the gap that exists in the literature on this field, since there is no large number of papers that have examined the influence of migrations on income convergence in the CEE-11 countries, as well as the Western Balkan countries.
Muntazir Hussain1, Irfan Saleem1 and Usman Bashir2
This study aims to investigate the dynamics of the interest rates and exchange rates during the pandemic-induced crisis in the Chinese economy. In the study, rolling window detrended cross-correlation analysis (DCCA) was used. The DCCA coefficient was extracted based on detrended fluctuation analysis (DFA). The data used in the study are the daily data of the period from 2/1/2019 to 7/5/2021. The results obtained in the study suggest the presence of positive cross-correlation between China’s interest rate and exchange rate after the COVID-19 pandemic, and they also report the existence of weak positive cross-correlation during the initial days of the pandemic. However, the weak positive cross-correlation became stronger over time. Higher interest rates are associated with higher exchange rates after the COVID-19 pandemic. The results of the research study have policy implications in that conventional higher interest rates introduced to defend the exchange rate might fail during pandemic-induced crises.
Tuan Viet Le1 and Kyle Elliott2
This study investigates the correlation between state income tax and unemployment rates across the United States. Using panel data in 50 states pertaining to the period from 2006 to 2022 with different regression models, the results suggest that the state corporate and personal income tax rates are positively correlated with the state unemployment rate. Specifically, a 1% decrease in the personal income tax rate may lead to a 0.712% decrease in the state unemployment rate, and a 1% decrease in the corporate income tax rate may cause a drop of 0.328% in the state unemployment rate. In addition, the results show that a personal income tax hike is associated with an increase of 1.532% in the state unemployment rate, and a corporate income tax hike may increase the state unemployment rate by 0.78%. The results of this study are relevant in the context of increasing government spending in the US and the world. Policymakers and government officials may not want to abuse the tax policy to fund the budget deficits.
Nabil Alimi1 and Lassad Ben Dhiab2
This study is aimed at analyzing the effect of the governance index and the governance components index on economic growth in 48 developing countries over the period 2002-2020. Corruption control, the effectiveness of the government, political stability, and regulatory quality are but a few of the many variables taken into account by the governance components index. The findings of the study show that governance has an asymmetric effect on economic growth. Moreover, the results indicate that enhancing governance in developing countries can obstruct economic growth in them. This outcome should not surprise and cast doubt on the positive effects of sound governance on economic growth, as improving governance requires numerous resources currently lacking in these countries. Therefore, policymakers must boost economic growth at the initial stage so that they can identify resources for improving governance and capitalize on them as well.
Ibrahim Abidemi Odusanya
In this paper, the way in which economic growth influences income distribution is examined with a focus on Sub-Saharan Africa (SSA). Despite considerable growth in a number of the SSA countries, the region has been slow in reversing the rising trend of income inequality. A large proportion of countries in the region globally rank among economies with extreme income inequality. The study covers a period from 1995 to 2015, due to the limited data on the measure of income inequality, the Gini index, for the largest number of the countries of the region. The Generalized Method of Moments (GMM) system was employed in examining this paradox. The findings of this research study do not only suggest the presence of an inverted-U relationship between economic growth and income inequality, but the supposition of the S-shaped curve hypothesis in the interplay of growth and inequality was also tested and confirmed. It can be concluded that in no way do spurts in economic growth bring about diminution in income disproportion in Sub-Saharan Africa.
Maja Putica
The objective of the current paper is to study the influence of the selected business and institutional determinants on the annual effective tax rates in banks in Serbia. Panel data regression models are applied on 113 observations, covering the period from 2017 to 2021, where the accounting and current effective tax rates are used as a measure of the actual tax burden. The results show that the effective tax rate in banks in Serbia is significantly below the statutory level. Furthermore, for each data set, the coefficients of changes in the effective tax rate are calculated, and the most adequate model is selected using the Hausman and Breusch-Pagan tests. In the first model, the biggest change in the effective tax rates is caused by change in leverage, merger and acquisition processes and the bank size. The presence of loan loss provisions in the model completely highlights the impact of profitability and leverage. Finally, in the last model, banks with a profit before tax can manage effective tax rates and tax burdens by regulating capitalization levels. The results of this study are of interest for economy creators and for business managers in banks, helping them in effective tax planning and managing the results.
Haryo Kuncoro1 and Fafurida Fafurida2
Whether macroeconomic fundamentals affect the exchange rate volatility in emerging markets with an inflation-targeting regime or not is highly challenging. In this paper, the impact of the current account deficits and foreign reserves on the volatility of real exchange rates. Applying threshold quantile regression models related to Indonesia over the period from 2005(7) to 2021(12), it is concluded that both variables play an important role in controlling the exchange rate instability. Both coefficients are also found to have an upward linear pattern. The asymmetric impact of current account balance holds. Claiming that a two-percent current account deficit in the GDP is the safe amount of the deficit that will not significantly affect the foreign-exchange rate is justified as such. The asymmetric behavior of the current account balance has the potential to trigger real exchange rate volatility, thereby undermining the monetary policy within the framework of the inflation targeting regime. Accordingly, the optimal stock of foreign reserves might avoid imposing dual goals of inflation targeting and exchange rate stability.
Joshua Adeyemi Afolabi
Technological advancement continues to revolutionize the labor market and has particularly intensified the debate on its employment effect across developing and developed economies. Employing the Autoregressive Distributed Lag (ARDL) framework, this study provides insights into the employment-innovation nexus across the Nigerian economic sectors using the quarterly data from 2011Q1 to 2021Q4. The findings reveal that the employment-innovation nexus is a short-run phenomenon in Nigeria and that technological innovation enhances employment generation in the service sector and the agricultural sector, but it takes a quarter before the positive employment effect occurs. Overall, the results suggest that technological innovation improves employment and reallocates labor across the sectors, which suggests the need to fully operationalize technological innovation across the Nigerian economic sectors in order to tackle the prevailing unemployment conundrum in the country.
Jadranka Đurović Todorović1, Marina Đorđević1 and Milica Ristić Cakić2
Although a complex taxation system can affect a company’s operations, its negative effects can be significantly greater at the macroeconomic level. Given the fact that it can make it more difficult to attract investments and collect revenue, the corporate income tax system has been the subject matter of numerous research studies for many years now. Modern business conditions initiated their frequent reforms, as well as the numerous dilemmas related to them. The paper deals with the taxpayer as an element of corporate income tax. Although numerous papers investigate the (dis)unity of tax systems in defining corporate income taxpayers, few authors examine the economic effects of these discrepancies. Also, most research studies are focused on examining the other elements of this tax form, such as the tax rate or tax incentives. In this paper, an effort is made to find a connection between the form of the organization of a business entity and the tax burden in the domain of corporate income tax. The research study aims to indicate the importance of the economic effects of this tax element and to propose its reform. The research has confirmed the initial assumption, respectively; it has shown that different forms of the organization of business entities bear different burdens of paying corporate income tax, which affects the amount of the tax revenue that could be collected. The results have shown that the sampled companies paid less tax due to corrections and adjustments in tax balances and tax returns.