Emerald | Journal of Economic Studies | Table of Contents http://www.emeraldinsight.com/0144-3585.htm Table of contents from the most recently published issue of Journal of Economic Studies Journal en-gb Tue, 06 May 2014 00:00:00 +0100 2013 Emerald Group Publishing Limited editorial@emeraldinsight.com support@emeraldinsight.com 60 Emerald | Journal of Economic Studies | Table of Contents http://www.emeraldinsight.com/common_assets/img/covers_journal/jescover.gif http://www.emeraldinsight.com/0144-3585.htm 120 157 Globalization, (fighting) corruption and development: how are these phenomena linearly and nonlinearly related in wealth effects? http://www.emeraldinsight.com/journals.htm?issn=0144-3585&volume=41&issue=3&articleid=17108862&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - Is globalization instrumental in fighting corruption? Do wealth effects matter in this fight? Are findings valid when linearity assumptions are dropped? This paper assesses the Lalountas et al. (2011) hypotheses (conclusions) in the African context.<B>Design/methodology/approach</B> - Though not form, yet in substance the intuition and motivation are compatible with those of Lalountas et al. (2011). Four hypotheses are tested from different methodological and contextual standpoints. In the analysis, while the economic and social dimensions of globalization are reflected in the HDI, the political dimension is captured by good governance indicators. A TSLS-IV estimation technique is applied where-in globalization instruments of trade and financial liberalization are instrumented on human-development and government-quality to account for corruption (corruption-control) effects. Thus the intuition is assessing how globalization is instrumental in the fight against corruption through human development (economic and social dimensions) and government quality (political dimension). <B>Findings</B> - Hypothesis 1: Globalization is a powerful tool in fighting corruption (True). Hypothesis 2: Globalization is an important tool in fighting corruption only in Middle and High income countries(Partially True). Hypothesis 3: For Low income countries globalization has no significant impact on corruption(True). Hypothesis 4: Hypotheses 1 and 2 are valid only under linearity(False). <B>Originality/value</B> - This paper has tested the Lalountas et al. (2011) hypotheses in the continent where concerns of globalization, human development and corruption are most acute. Article literatinetwork@emeraldinsight.com (Simplice Asongu) Tue, 06 May 2014 00:00:00 +0100 Inflation, inflation uncertainty and output growth: what does the data says for Malaysia? http://www.emeraldinsight.com/journals.htm?issn=0144-3585&volume=41&issue=3&articleid=17108830&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - This paper examines the causal relationships between inflation, output growth and their uncertainties in Malaysia.<B>Design/methodology/approach</B> - Our modeling approach allows for structural breaks to avoid the masking of specific impacts.<B>Findings</B> - Based on the asymmetric GARCH model, we found strong evidence favoring a positive effect of a change in the inflation uncertainty as predicted by the Friedman-Ball hypothesis. In addition, inflation (inflation uncertainty) has direct (indirect) negative effect on the output growth. Our results are consistent with the Taylor effect—increases in inflation uncertainty decreases output uncertainty. The analysis also reveals that economic uncertainty lowers the growth rate of output, complying with Bernanke’s idea. <B>Originality/value</B> - The present study suggests that extra efforts are required to locate the breaks in the variance in order to draw concrete evidence on link between economic uncertainty and macroeconomic performance. Article literatinetwork@emeraldinsight.com (Ahmad Zubaidi Baharumshah, Siew-Voon Soon) Tue, 06 May 2014 00:00:00 +0100 Effects of reputation and credibility on monetary policy: theory and evidence for Brazil http://www.emeraldinsight.com/journals.htm?issn=0144-3585&volume=41&issue=3&articleid=17108864&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - The paper aims at demonstrating that both the reputation of the monetary authority and the credibility of the regime of inflation targeting are important to reduce the inflation bias and the effort of the monetary authority in an emerging economy.<B>Design/methodology/approach</B> - The paper develops a model which shows that the gain of credibility reduces the effort of the monetary authority in the conduct of monetary policy. The paper presents an econometric analysis for Brazil through ordinary least squares, generalized method of moments, system of equations by generalized method of moments and vector autoregressive.<B>Findings</B> - The findings suggest that the reputation of the monetary authority is important to the improvement of credibility, and the gains of credibility reduce the effort of the monetary authority in the conduct of monetary policy, reducing the variations of the monetary base.<B>Originality/value</B> - In the theoretical field, the study develops a model which shows that credibility is important to reduce both the inflation bias and the efforts of the monetary authority in the conduct of monetary policy. In the empirical field, (i) it proposes a new index of reputation for the monetary authority, (ii) it demonstrates that the gain of reputation improves credibility, but also that attempts to exploit the output-inflation trade-off reduces credibility, (iii) the analysis found that the gains of credibility reduce the efforts of the monetary authority in the conduct of monetary policy. Article literatinetwork@emeraldinsight.com (Gabriel Montes, Julio Bastos) Tue, 06 May 2014 00:00:00 +0100 The Effect of Market Structure, Regulation and Risk on Banks Efficiency: Evidence from the Gulf Cooperation Council Countries http://www.emeraldinsight.com/journals.htm?issn=0144-3585&volume=41&issue=3&articleid=17108812&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - The aim of the study is to analyze the efficiency performance of the GCC banking sector. The primary focus is to assess whether market power, risk taking activities, and regulations have significant effects on GCC banks’ efficiency performance. <B>Design/methodology/approach</B> - The estimation and inference has been implemented using a double bootstrap procedure that simultaneously corrects for bias and validates inference on the influence of covariates. In the first stage, efficiency scores are estimated with data envelopment analysis (DEA). In the second stage, variation in the resulting efficiency scores is explained using a truncated regression model with inference based on a semi-parametric bootstrap routine.<B>Findings</B> - We found compelling evidence that efficiency is not independent of the market structure, the bank’s risk taking activities, and the regulatory environment. In particular, the Lerner Index provides evidence that market power decreases efficiency. The capital adequacy, the supervisory power and the market discipline were all found to improve efficiency. Additionally, when the risk is measured by the Z- Score or even by the ratio of nonperforming loans to total loans, it adversely affects efficiency.<B>Research limitations/implications</B> - The results of the current study have important implications for regulators and supervisors. Promoting banks’ competitive environment in the GCC countries through reducing the information barriers to entry, encouraging bank privatization, and lowering the activities restrictions can potentially improve operational efficiency of banks. Also enhancing banks’ diversification activities and risk management techniques may have the advantage of increasing operational efficiency. Furthermore, improvements in the regulatory conditions that enhance banking supervision and monitoring would also improve efficiency. <B>Originality/value</B> - The main contributions of the paper are threefold: First, to our knowledge, this study is the first to employ by far the most comprehensive data set of GCC banks investigated to date. Second, the analysis focuses on the influence of a wide set of factors, most of them was not covered before in related economic literature on bank efficiency of the GCC countries. Third, our methodological innovation involves applying a double bootstrap procedure proposed by Simar and Wilson (2007). Article literatinetwork@emeraldinsight.com (AKTHAM Maghyereh, Basel Awartani) Tue, 06 May 2014 00:00:00 +0100 Labor Productivity and Obsolete Skills in a Growth Model with Production by Layers http://www.emeraldinsight.com/journals.htm?issn=0144-3585&volume=41&issue=3&articleid=17108825&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - This paper studies growth dynamics in a model where labor productivity is shaped by two forces. On one hand, it is determined by the extent in which available technology has been already explored. On the other hand, some labor skills may become obsolete, jeopardizing the ability of the labor input in creating value, namely when a transition between technological states takes place.<B>Design/methodology/approach</B> - A theoretical model is developed, based on previous work about hierarchical organizations of production, in order to build an integrated structure of analysis for growth, productivity, innovation and obsolescence of skills.<B>Findings</B> - In a setting in which output grows through the accumulation of layers of activity, the generation of income and the evolution of techniques will be determined by the choice of a representative agent, who faces a trade-off between consumption utility and the desire to maintain intact the skills of the labor force.<B>Research limitations/implications</B> - The theory provides an analytical structure to think about skill acquisition and skill obsolescence in the context of economic growth. Further work is necessary, namely at an empirical level, to test the validity and the reasonability of the model's implications.<B>Originality/value</B> - The paper sheds light on the role of labor productivity as a growth determinant. It seeks a deeper understanding on the relationship between human capabilities and the efficient use of technology. Article literatinetwork@emeraldinsight.com (Orlando Gomes) Tue, 06 May 2014 00:00:00 +0100 Labour market performance of dropouts: The role of personality http://www.emeraldinsight.com/journals.htm?issn=0144-3585&volume=41&issue=3&articleid=17108840&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - The purpose of this study is to provide evidence on labor market careers of dropouts with various levels of education.<B>Design/methodology/approach</B> - We compare the labor market careers of dropouts and non-dropouts between ages 15 and 50 by using longitudinal data. We analyse how the results change when we control for differences in personality characteristics.<B>Findings</B> - We find that dropping out diminishes one’s success in the labour market but this connection is reduced when the model is augmented with personality. Dropouts seem to have or lack certain personality characteristics that are associated with labor market success. These findings suggest that dropping out is either an adverse signal of non-cognitive skills and, thus, work performance and productivity, or personality characteristics are related to preferences towards career and work orientation, or both.<B>Originality/value</B> - We analyse how the impact of dropping out on labour market outcomes changes when differences in personality characteristics are taken into account. The broad definition enables us to investigate how dropping out in general is related to labour market success. Article literatinetwork@emeraldinsight.com (Jutta Viinikainen, Katja Kokko, Lea Pulkkinen, Jaakko Pehkonen) Tue, 06 May 2014 00:00:00 +0100 Does Income Matter in the Happiness - Corruption Relationship? http://www.emeraldinsight.com/journals.htm?issn=0144-3585&volume=41&issue=3&articleid=17108808&show=abstract <strong>Abstract</strong><br /><br /><B>Purpose</B> - Empirical evidence on the relation between happiness (life satisfaction) and corruption is barely perceptible in the literature. This paper contributes to closing this gap by presenting some estimates using a large cross-section of countries over the period 1996-2010. <B>Design/methodology/approach</B> - The empirical model allows both corruption and per capita income to enter as arguments of a happiness ‘production function.’ The correlation between happiness and corruption is presumed to be non-linear.<B>Findings</B> - While the results do not support the existence of a Kuznets-type trajectory, the study finds that the level of per capita income determines whether happiness and corruption are related and in what way. The authors estimate cutoff income levels at which corruption has a discernible effect on happiness. The results show that corruption reduces happiness, but only for high income countries – roughly the upper half of the income range in the sample. <B>Practical implications</B> - Results nullify the oft-asserted statement that happiness is negatively linked to corruption in all countries. The nature of correlation is more complex. <B>Originality/value</B> - The paper goes beyond simply testing whether happiness is related to corruption. It conjectures that the relationship between the two variables is non-monotonic. Thus, the analysis considers the notion that the association between happiness and probity is income dependent. A novel feature of the empirical model is that the estimated income cutoff levels are endogenously determined. That is, income thresholds are not pre-determined. The authors also test for the robustness of the results by addressing the issue of potential endogeneity of corruption. Article literatinetwork@emeraldinsight.com (Mak Arvin, Byron Lew) Tue, 06 May 2014 00:00:00 +0100