nep-dev New Economics Papers
on Development
Issue of 2012‒12‒10
nine papers chosen by
Mark Lee
Towson University

  1. Does colonialism have an impact on the current language situation in Sub-Saharan Africa? By Buzasi, Katalin
  2. Foreign Direct Investment in Cambodia: The case of G.E. By Mongay, Jorge; Bohlander, Anne; Lin , Tai-Chun Vicky; Nygren , Phoebe
  3. Human Capital and Income Inequality: Some Facts and Some Puzzles By Rafael Domenech; Amparo Castello Climent
  4. International trade and economic growth in Mexico By Fullerton, Thomas M., Jr.; Kababie, Kababie; Boehmer, Charles R.
  5. Social Spending and Human Development in Selected West African Countries By iheoma, nonso
  6. Stuck in the middle ? human capital development and economic growth in Malaysia and Thailand By Jimenez, Emmanuel; Nguyen, Vy; Patrinos, Harry Anthony
  7. The Drivers of Diaspora Donations for Development: Evidence from the Philippines By Victoria Licuanan; Toman Omar Mahmoud; Andreas Steinmayr
  8. The Dynamic Link between Energy Consumption, Economic Growth, Financial Development and Trade in China: Fresh Evidence from Multivariate Framework Analysis By Muhammad, Shahbaz; Saleheen , Khan; Mohammad , Iqbal Tahir
  9. Working Paper 159 - Why do some Firms abandon Formality for Informality? Evidence from African Countries By AfDB

  1. By: Buzasi, Katalin
    Abstract: Recent studies show that colonization and ethnolinguistic fragmentation have relevant long-lasting impacts on ex-colonies and might explain development and underdevelopment of different parts of the world. The aim of this paper is to connect these two strands of the literature to some extent by investigating the effect of colonizer’s identity on the current language situation in Sub-Saharan Africa. To establish the relationship between colonization and linguistic circumstances we conduct basic statistical analysis at the country level and more detailed econometric analyses at the level of individuals. The variable of interest is the Communication Potential Index (CPI) which reflects the probability that two randomly selected people in a society can communicate based on commonly spoken languages. Basic observations at the country level and multilevel analysis at the individual level suggest that current linguistic situation measured with the CPI cannot be explained by the identity of the colonizer.
    Keywords: Sub-Saharan Africa; language; communication potential; colonialism; multi-level regression analysis
    JEL: Z1 N97
    Date: 2012–11–22
  2. By: Mongay, Jorge; Bohlander, Anne; Lin , Tai-Chun Vicky; Nygren , Phoebe
    Abstract: Cambodia, a country located on the Southern tip of Asia between Vietnam and Thailand, has been subject to incredible controversy and strife in the past century. However, in the past decade the nation has made incredible strides in their efforts to become an attractive option for foreign direct investment.General Electric Company is an American multinational company that operates through four segments—Energy, Technology Infrastructure, Capital Finance, and the Consumer and Industrial segment—in more than 100 countries. One of which is Cambodia, a dynamic country that is situated in the Lower Mekong Region. The company first launched its presence in Cambodia in July 2007 in the Healthcare, Industrial Solutions and Home and Business Solutions sectors. Today, the company has continued growing rapidly at a rate of 20% annually in the ASEAN region.
    Keywords: Cambodia; foreign direct investment; fdi; case study; international business
    JEL: F5 F21
    Date: 2012–11–12
  3. By: Rafael Domenech; Amparo Castello Climent
    Abstract: Using a broad number of indicators from an updated data set on human capital inequality for 146 countries from 1950 to 2010, this paper documents several facts regarding the evolution of income and human capital inequality. The main findings reveal that, in spite of a large reduction in human capital inequality around the world driven by a decline in the number of illiterates of several hundreds of millions of people, the inequality in the distribution of income has hardly changed. In many regions, the income Gini coefficient in 1960 was very similar to that in 2005. Therefore, improvements in literacy are not a sufficient condition to reduce income inequality, even though they improve life standards of people at the bottom of the income distribution. Increasing returns to education, external effects on wages of higher literacy rates or the simultaneous concurrence of other exogenous forces (e.g., globalization or skill-biased technological progress) may explain the lack of correlation between the evolution of income andeducation inequality.
    Keywords: Distribution of education, income inequality, human development, panel data
    JEL: I24 I25 O15 O50
    Date: 2012–11
  4. By: Fullerton, Thomas M., Jr.; Kababie, Kababie; Boehmer, Charles R.
    Abstract: This study empirically examines on the role of international trade on economic growth in Mexico. To allow for potentially dynamic, as well as endogenous, patterns often associated with exports, imports, and growth, the analysis relies upon time series approaches involving causality and vector error correction methods. Results indicate that imports play a more critical role than exports do for economic growth in Mexico. As such, the outcomes contribute to the growing body of international evidence regarding import led growth in the global economy.
    Keywords: International Trade; Growth; Mexico; Dynamic Models
    JEL: O54 F43
    Date: 2012–09–11
  5. By: iheoma, nonso
    Abstract: The fundamental focus of economic development is the development of the human person, and over the years, there has been a common consensus among development economists on the efficacy of social services in achieving this objective. But, as is the case in advanced countries, is social spending capable of ensuring human development in developing countries? This study aims at providing answers to this question using Nigeria, Ghana and Senegal as case studies. The study adopts the fixed effect partial adjustment model and regresses the human development index on health and education spending across these countries for a period of 10 years (2000 – 2010) for each country, estimated using the ordinary least square. Results show that while health spending is significant in explaining human development in these countries both in the short and long runs, education spending is not. Therefore, it is recommended that in order to ensure the continued development of the human capital in these countries, increased funding of the health sector is necessary. Furthermore, ensuring adequate utilization of education sector allocation and enhancing the availability and accessibility of education services especially to the urban poor and rural dwellers will address the disconnect between education spending and human development.
    Keywords: human development; social spending; health; education
    JEL: H50 H5
    Date: 2012–06–12
  6. By: Jimenez, Emmanuel; Nguyen, Vy; Patrinos, Harry Anthony
    Abstract: The challenge of sustaining economic growth over the long term is one that only a few countries have been able to surmount. Slowing momentum in countries like Malaysia and Thailand has led analysts and policy makers to consider what it would take to lift them out of middle-income status, where other countries have arguably become stuck. The paper examines the role of human capital formation in the quest to sustain economic growth in these two countries. It argues that a good education system is fundamental to equip workers with marketable skills. Malaysia and Thailand have successfully expanded access to schooling, but the quality of education remains an issue. Modern education systems should aim to provide universally-available quality education using the following policies: prioritize budgets to deliver quality and universally-available basic education before expanding higher levels of schooling; provide appropriate incentives and rewards to teachers; permit school autonomy and ensure accountability for results; invest in early childhood development; and consider implementing income-contingent loan financing schemes to expand higher education.
    Keywords: Education For All,Primary Education,Access&Equity in Basic Education,Teaching and Learning,Tertiary Education
    Date: 2012–11–01
  7. By: Victoria Licuanan; Toman Omar Mahmoud; Andreas Steinmayr
    Abstract: Little is known about the drivers of migrant donations to their home countries. Using data on all donations from Filipino migrants administered by the Philippine Commission on Filipinos Overseas between 1990 and 2010, this paper explores which host and home country factors are associated with migrant donations. On the host country side, we find that donations increase with the level of income earned by the Filipino diaspora and with the number of hate crimes against minorities. On the home country side, we find that donations are not well-targeted. As donations mainly flow to provinces with high rates of emigration, they do not reach the least developed Philippine provinces. However, the diaspora is responsive to natural disasters and channels donations to provinces when they are hit by a typhoon
    Keywords: International migration, philanthropy, collective remittances
    JEL: F22 F24
    Date: 2012–11
  8. By: Muhammad, Shahbaz; Saleheen , Khan; Mohammad , Iqbal Tahir
    Abstract: This study investigates the relationship between energy consumption and economic growth by incorporating financial development, international trade and capital as important factors of production function in case of China over the period of 1971-2011. The ARDL bounds testing approach to cointegration was applied to examine long run relationship among the series while stationarity properties of the variables was tested by applying structural break test. Our empirical evidence confirmed long run relationship among the variables. The results showed that energy consumption, financial development, capital, exports, imports and international trade have positive impact on economic growth. The Granger causality analysis revealed that unidirectional causal relationship running from energy consumption to economic growth. Financial development and energy consumption Granger cause each other. There is bidirectional causality between trade and energy consumption. The feedback relation exists between financial development and international trade. There is also bidirectional causality exists between capital and energy consumption, financial development and economic growth and, international trade and economic growth. This paper makes significant contribution in energy literature and opens up new direction for policy makers to explore new and alternative sources of energy to meet the rising demand of energy due to sustained rate of economic growth.
    Keywords: Growth; Energy; Financial Development; Trade
    JEL: E44 F1 Q4
    Date: 2012–11–10
  9. By: AfDB
    Date: 2012–11–29

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