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.
Joshua Adeyemi Afolabi1, Blessing Ufuoma Olanrewaju1 and Wasiu Adekunle2
The Nigerian economy has been repeatedly hit by macroeconomic shocks, primarily owing to its over-reliance on crude oil and poor resource management. Given the limited resilience capacity of Nigeria’s economic sectors, this study examined the sensitivity of these sectors to macroeconomic shocks using the Vector Autoregression (VAR) and the Vector Error Correction (VEC) models in whose frameworks the study was carried out for the period between 2010Q1 and 2021Q4. The findings revealed the high responsiveness of the services and agricultural sectors to fiscal shocks, as well as the high sensitivity of the industrial sector to interest rate shocks. Also, the services sector was found to be more resilient to oil price shocks than the other sectors. Therefore, this study advocates for developing strategies to boost sectoral productivity and skillfully blend the fiscal and monetary policies so as to cushion the effects of macroeconomic shocks. Overall, this study provides the evidence of the sectoral effects of macroeconomic shocks in Nigeria.
Radovan Kovačević
This paper examines the impact of the selected factors on the real exports of goods and services in the several euro area (the eurozone) peripheral economies. There are five countries in the sample (Italy, Spain, Portugal, Ireland, and Greece). The time period from 2000 to 2019 is considered. The research is aimed at providing robust estimates of the long-term relationship between the real exports of these countries and the selected explanatory variables using panel data analysis. The coefficients of the cointegration export equation were estimated using the FMOLS and DOLS estimators. Using the FMOLS estimator, the estimated coefficient of the real effective exchange rate is negative (-0.80) and of the variable foreign demand is positive (2.25). The coefficient of the real effective exchange rate confirms the fact that, from the point of view of the eurozone peripheral members, the overestimated real value of the euro has a disincentive effect on their real exports. The estimated coefficient of foreign demand suggests that the real export of goods and services (volumes) of the eurozone peripheral members increases by 2.25% when the real Gross Domestic Product (GDP) of the EU increases by 1%. The real export elasticity of the eurozone periphery countries is higher for foreign demand (income elasticity) than for relative price changes (price elasticity). Reductions in wages and prices in peripheral countries have led to redistributive effects in favor of the core.
Vlatka Bilas and Sanja Franc
This paper is aimed at examining the fact whether foreign direct investment (FDI) and exports do contribute to economic growth in the thirteen European Union (EU) new member states (namely Bulgaria, Croatia, Cyprus, Czech, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia, Slovenia) during the period from 2005 to 2020 or not. Various statistical tests were performed in order to examine the relationship and causality among the three observed series, including unit-root tests, the Kao and Pedroni cointegration tests, and finally the modified causality test. The obtained results are mixed. Although cointegration was established between FDI, exports and growth, the estimation of the long-term coefficients varied to such an extent that only ambiguous conclusions about the effect of FDI and exports on the growth of the real gross domestic product (GDP) could be reached. The research results imply the fact that positive effects of FDI and exports are neither automatic nor equal in all the countries, but the same rather depend on the many factors and conditions that the governments of the selected states should consider when designing policy measures for attracting FDI and promoting exports.
Mirjana Todorović and Dragana Parč
The main goal set by this paper is to identify the position of controlling and controllers in the practice of companies operating in the Republic of Serbia in the conditions of intensive digitalization. This research study is focused on understanding and the critical success factors of controlling, tools and the controller’s tasks. The research study was conducted on a sample of 35 companies, and the respondents were employed in various controlling positions. In methodological terms, the analysis of the collected data included descriptive statistics, measuring the reliability and internal consistency of the variables (Cronbach’s alpha coefficient) and conducting a nonparametric test (Mann-Whitney’s U test). The results of the research study show that controlling is understood as multidimensional, most often professional support to management; that the controlling key success factor is the controller’s expertise and competence; that the most important controlling tools are the budget, variance analysis and the short-term calculation of the results, and finally that one of the controller’s basic tasks is reporting to management. The nonparametric test enabled the identification of statistically significant differences in the respondents’ attitudes.
Khadijat Adenola Yahaya, Ramat Titilayo Salman, Abubakar Kolapo Abdulsalam and Adesanmi Timothy Adegbayibi
This study is aimed at evaluating the impact of human resource accounting for the profitability of Nigerian listed conglomerate companies. The secondary data used in the study were collected from the audited annual reports of the six conglomerate companies quoted on the Nigerian Stock Exchange in the period from the year 2010 to 2019. The panel regression technique was adapted for the purpose of the analysis of the collected data. The results show that the cost of staff training and staff development, changes in employees’ salaries and post-employment benefits have a positive significant impact on the profitability of the Nigerian conglomerate companies. The study then concludes that human resource accounting positively contributes to the profitability of Nigerian conglomerate companies and provides the recommendations reading that Nigerian companies should invest more in their employee training and development.