nep-gro New Economics Papers
on Economic Growth
Issue of 2021‒11‒08
six papers chosen by
Marc Klemp
University of Copenhagen

  1. We Don't Need No Education: The Effect of Persistent Income Shocks on Human Capital By Ishak, Phoebe W.; Gradstein, Mark
  2. The asymmetric effect of internet access on economic growth in sub-Saharan Africa By Idris A. Abdulqadir; Simplice A. Asongu
  3. Alone and Lonely. The economic cost of solitude for regions in Europe By Chiara Burlina; Andres Rodriguez-Pose;
  4. The Interplay Between Colonial History and Postcolonial Institutions: Evidence from Cameroon By Marie Christelle Mabeu; Roland Pongou
  5. Complementarity between human capital and public infrastructure in industrial comparative advantage By Rimvie Enoc Kabore
  6. Growing Through Spinoffs By Maurizio Iacopetta; Raoul Minetti; Pierluigi Murro

  1. By: Ishak, Phoebe W.; Gradstein, Mark
    JEL: O12 I2
    Date: 2021
  2. By: Idris A. Abdulqadir (Federal University Dutse, Dutse, Nigeria); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: This article investigates the asymmetric effect of internet access (index of the internet) on economic growth in 42 sub-Saharan African (SSA) countries over the period 2008-2018.The estimation procedure is obtained following a dynamic panel threshold regression technique via 1000 bootstrap replications and the 400 grids search developed by Hansen (1996, 1999, 2000). The investigation first explores the presence of inflection points in the relationship between internet access and economic growth through the application of Hansen's threshold models. The finding from the nonlinearity threshold model revealed a significant internet threshold-effect of 3.55 percent for growth. The article also examines the linear short-run effect of internet access on economic growth while controlling for the effects of private sector credit, trade openness, government regulation, and tariff regimes. The marginal effect of internet access is evaluated at the minimum, and the maximum levels of government regulation and tariffs regime are positive. On the other hand, the minimum and maximum levels of private sector credit and trade openness are negative via the interaction terms. The article advances the literature by its nonlinear transformation of the relevance of internet access on economic growth by exploring interactive mechanisms of internet access versus financial resource, internet access versus trade, internet access versus government regulation, and internet access versus the tariff regimes from end-user subscriptions. In policy terms, the statistical significance of the joint impact of government regulations and tariff regimes is relevant in the operation of the telecommunication industry in SSA countries.
    Keywords: Internet access; economic growth; government regulations; trade openness; tariff regimes; sub-Saharan Africa
    Date: 2021–01
  3. By: Chiara Burlina; Andres Rodriguez-Pose;
    Abstract: Solitude is a rising phenomenon in the western world. The number of people affected by solitude has been rising for some time and the Covid-19 pandemic has brought this trend to the fore. Yet, we know next to nothing about the aggregate subnational economic consequences of the rise in solitude. In this paper we analyse the consequences of solitude on regional economic performance across Europe, distinguishing between two of its key dimensions: alone living, proxied by the regional share of the population in one-person households; and loneliness, proxied by the aggregate share of social interactions. We find that solitude has important implications for economic development, but that these go in different directions. While alone living is a substantial driver of economic growth across European regions, high shares of lonely people undermine it. The connection of loneliness with economic growth is, however, dependent on the frequency of in-person meetings, with large shares of the population meeting others on a weekly basis yielding the best economic returns.
    Keywords: solitude, alone living, loneliness, growth, GDP per capita, regions
    JEL: J12 P48 R23
    Date: 2021–10
  4. By: Marie Christelle Mabeu; Roland Pongou (Department of Economics, University of Ottawa, Ottawa, ON)
    Abstract: We study the long-term impacts of Cameroon's colonial history and its interplay with postcolonial institutions. We exploit both the arbitrary division of the German Colony of Kamerun between France and Britain after World War I and the 1961 reunification of British Southern Cameroons and the French-speaking République du Cameroun. Comparing individuals from the same ethnic homeland but living on either side of the British-French border within Cameroon, we find that individuals on the British side had higher educational attainment before the reunification, but that this initial advantage was partially erased by post-reunification governance. Despite achieving higher educational attainment overall, individuals on the British side have worse employment outcomes and roughly similar infant mortality rates. We provide further evidence of the interaction between colonial origins and postcolonial institutions by analyzing how the outcomes of individuals in former Southern Cameroons differ from their hypothetical outcomes, had they instead opted to join Nigeria in the 1961 plebiscite. We find that they have lower educational attainment, higher infant mortality rates, and worse employment outcomes relative to their co-ethnics living on the Nigerian side of the border between former Southern Cameroons and Nigeria.
    Keywords: Colonial history, Postcolonial institutions, Cameroon, British Southern Cameroons, French Cameroons, République du Cameroun, Reunification, Federalism, Centralization.
    Date: 2021
  5. By: Rimvie Enoc Kabore (LEDi - Laboratoire d'Economie de Dijon [Dijon] - UB - Université de Bourgogne - UBFC - Université Bourgogne Franche-Comté [COMUE])
    Abstract: The article examines the role of public capital as an infrastructure service in the acquisition of industrial comparative advantages. To achieve this in this framework, we develop a theoretical model highlighting the complementarity between public and human capital as a mechanism of industrial development, and test this idea using sectoral panel data from 1999 to 2014 across 35 advanced and less advanced countries. Our results show that the sustainable acquisition of a comparative advantage in the production of industrial goods can only be guaranteed by accumulating public capital and human capital. It shows that public infrastructure can only generate industrialization when it is made available to the economy through human capital.
    Keywords: Industrial advantage comparative,Human capital,Public infrastructure
    Date: 2021–10–06
  6. By: Maurizio Iacopetta (OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po); Raoul Minetti (Michigan State University [East Lansing] - Michigan State University System); Pierluigi Murro
    Abstract: New firms are often based on ideas that the founders developed while working for incumbent firms. We study the macroeconomic effects of spinoffs through a growth model of product variety expansion, driven by firm entry, and product innovation. Spinoffs stem from conflicts of interest between incumbent firms' shareholders and employees. The analysis suggests that incumbents invest more in product innovation when knowledge protection is stronger. An inverted-U shape relationship emerges, however, between the intensity of spinoff activities and the strength of the rule of law. A calibration experiment indicates that, with a good rule of law, loosening knowledge protection by 53 reduces product innovation by one fifth in the short run and one seventh in the long run, but boosts the spinoff rate by one tenth and one sixth in the short and long run, respectively. Nevertheless, per capita income growth drops and welfare deteriorates. The trade-offs are broadly consistent with evidence from Italian firms.
    Keywords: Corporate governance,Endogenous growth,Spinoffs
    Date: 2020–04–29

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