International Journal of Social Economics

Jung, Kyujin ; Andrew, Simon

2014 International Journal of Social Economics

doi: 10.1108/IJSE-07-2013-0171

Purpose – The purpose of this paper is to examine the role of governments in resolving collective action dilemmas arising in R&D collaboration between university-research institutes (URI) and small and medium-size enterprises (SMEs). The paper focusses on R&D collaboration in South Korea in light of its major industrial reforms since the 1980s in strengthening the national science and technology innovation system. Design/methodology/approach – To examine factors explaining the likelihood of SMEs to collaborate with URIs in R&D activities, the authors used data that were collected in the Seoul Metropolitan Area by the Seoul Institute in 2010. A logistic regression analysis was performed with data from the Open Innovation System survey, which consists of 336 SMEs; and supplemented by firm-level data retrieved from the government official statistics on structural characteristics of SMEs. The Mann-Whitney Test of Difference was employed to test the perceived importance of R&D activities in various stages of product development. Findings – This research found that SMEs having government certified R&D facilities and higher investments in R&D activities explain their likelihood in engaging in R&D collaboration with URIs. SMEs in the chemical sector also are more likely to establish R&D collaboration with URIs compared to those in the information technology (IT) sector. In terms of the importance of R&D activities, there are marked differences between SMEs collaborating with URIs and those that do not. The differences are found in R&D’s needs related to acquisition of information, basic research, pilot testing of products, and product manufacturing. Most SMEs in the sample reported several barriers to R&D activities, particularly in securing human resources and the operation of R&D; and that, they believe the government can assist them in research and development activities and human resource training. Research limitations/implications – This study provides new insights into the way in which R&D facilities of SMEs may facilitate R&D collaboration with URIs. The results broaden the understanding on the scope of R&D collaboration adopted by SMEs and strategies that can be adopted and implemented by government agencies to attract and retain firms that are innovative. While the findings also provide insights on the scope of management decisions adopted by SMEs, the sample was limited to 336 SMEs in the Seoul Metropolitan area, making generalization to other regions of the country limited. Originality/value – From the institutional collective action framework, this research provides a critical lens to build R&D collaboration between the URI and SMEs, highlighting the role of government with considerable efforts to facilitate SMEs to enter into arrangements with URIs by focussing on the importance of R&D facility and stages of product development.

Sehrawat, Madhu ; Giri, A.K.

2014 International Journal of Social Economics

doi: 10.1108/IJSE-11-2013-0268

Purpose – The purpose of this paper is to examine the relationship between financial development indicators and human development in India using annual data from 1980-2012. Design/methodology/approach – The Ng-Perron unit root test is used to check for the order of integration of the variables. The long run relationship and short run dynamics are examined by implementing the ARDL bounds testing approach to co-integration. Granger’s non-causality test and variance decomposition techniques are also used to examine the impact of financial development indicators on human development. Findings – The results confirm a long run relationship among the variables. The results of granger non causality indicate that unidirectional causality runs from financial development indicators to human development index (HDI). The variance decomposition analysis shows that among all the financial indicators, broad money supply (M3) has the largest contribution to changes in human development in India. Research limitations/implications – The present study recommends for appropriate reforms in financial market to attain sustainable human development in India. The findings will be useful for India’s policy makers, in order to maintain the parallel expansion of financial development and human development. Originality/value – This paper is first of its kind to empirically examine the casual relationship between financial development indicators and human capital development proxied by HDI in India by using modern econometric techniques.

Makina, Daniel

2014 International Journal of Social Economics

doi: 10.1108/IJSE-02-2014-0038

Purpose – The purpose of this paper is to examine the predictability of remittances in individual developing countries. It achieves this objective by testing for mean reversion (i.e. stationarity) in the monthly remittance series reported to the World Bank by 21 developing countries. Design/methodology/approach – Unit root tests on remittance time series are undertaken using three tests – the augmented Dickey-Fuller test, the Phillip-Peron test and the Kwiatkowshi, Phillips, Schmidt and Shin test. Stationarity of series in levels would indicate mean reversion and predictability of remittances. Findings – The paper finds significant evidence of mean reversion and hence predictability in remittance inflows in 17 developing countries. Practical implications – Remittance inflows, which have become an important source of external finance for many developing countries, are not random flows but a stable and predictable stream of financial flows. Originality/value – Prior research has focused on volatility of remittances in comparison with other capital flows and then inferred stability from them having lower volatility. Using available monthly data, this paper is the first to directly test for mean reversion and hence predictability of remittances.

Berkem, Zoheir

2014 International Journal of Social Economics

doi: 10.1108/IJSE-08-2013-0182

Purpose – The purpose of this paper is to know the method adopted by the Malaysian supervisor to regulate the Takaful sector, and to propose a new approach related to the effective supervision. Design/methodology/approach – The key approach in this paper is a case study over a clear period of time, to discover a wide variety of economical, financial, social, and cultural factors potentially related to Malaysian Takaful system. In addition, both explanatory and descriptive approaches are used, to seek explanations of problems, make careful observations, and give detailed recommendations. The study collected relevant quantitative and qualitative data. Findings – The key findings are: the basis of Takaful’s operation is established on the principles of Islamic Laws, Takaful operations are regulated by the Central Bank, this supervisory body has adopted elements of the two methods: regulation and supervision, the Malaysian Takaful industry has experienced rapid growth and transformation, and the proposed approach includes four key elements. Research limitations/implications – This study provides a road map for the next studies in this new topic. Practical implications – The paper guides the policy makers to giving more independence and allocating more resources to the supervisory body, for the development of an important component of the financial system. Originality/value – The essay is distinguished from the previous researches by limiting and identifying a clear period of the study. Further, the authors have listed the most important elements of the leading programs. Finally, the approach is more concerned with new aspects of the ongoing supervision, strategic axis and the supervision stages.

Simplice, Asongu

2014 International Journal of Social Economics

doi: 10.1108/IJSE-12-2013-0288

Purpose – Owing to lack of relevant data on health human resource (HHR) migration, the empirical dimension of the health-worker crisis debate has remained void despite abundant theoretical literature. A health worker crisis is growing in the world. Shortages in health professionals are reaching staggering levels in many parts of the globe. The paper aims to discuss these issues. Design/methodology/approach – A quantile regression approach is used to examine the determinants of health-worker emigration throughout the conditional distributions of health-worker emigration. This provides an investigation of the determinants when existing emigrations levels matter. The author assesses the determinants of emigration in the health sector through-out the conditional distribution of HHR emigration. Findings – The findings have been presented in two main strands: when existing emigration levels are low and when existing emigration levels are high. In the former case (when existing emigration levels are low), wealth-effects have the following implications. First, while economic prosperity is a good tool against nurse brain drain in middle income countries (MICs), health expenditure is a good instrument against physician brain drain in low income countries (LICs). Second, whereas positive demographic change fuels the problem in LICs, it mitigates the issue in their MIC counterparts. Third, savings, government-effectiveness, foreign-aid and inflationary pressures only accentuate the problem for both income groups. Fourth, corruption-control becomes a vital tool for emigration-control in both income-brackets. Fifth, while trade openness mitigates physician emigration in LICs, financial openness has the opposite effect on nurse emigration. In the latter case (when existing immigration levels are high), the following conclusions have been drawn. First, While economic prosperity fights nurse emigration only in LICs, savings is a tool against physician emigration only in their MIC counterparts. Second, health expenditure and inflationary pressures are relevant tools in the battle against physician resource flight. Third, whereas, government effectiveness is an important policy measure for mitigating emigration in LICs, human development plays a similar role in MICs. Fourth, democracy, press-freedom, foreign-aid and financial openness fuel emigration in either income strata. Fifth, population growth and trade openness are important tools in the fight against brain-drain. Sixth, the HIV infection rate is a deterrent only to nurse emigration. Originality/value – This paper complements existing literature by empirically investigating the World Health Organization hypothetical determinants of health-worker migration in the context of globalization when income-levels matter. In plainer terms, the work explores how the wealth of exporting countries play-out in the determinants of HHR emigration.

Azam, Muhammad ; Emirullah, Chandra

2014 International Journal of Social Economics

doi: 10.1108/IJSE-11-2013-0262

Purpose – The purpose of this paper is to explore the impact of corruption as an important element of weak governance, with control variables such as inflation rate, openness to trade and dependency ratio on gross domestic product (GDP) per capita income of nine selected countries in Asia and the Pacific. Design/methodology/approach – This study is based on an annual panel data covering the period from 1985 to 2012, and a simple multiple regression for empirical investigation is used. Both fixed effects and random effects models were used as analytical techniques. Findings – The study reveals that both corruption and inflation rate are negatively related to GDP per capita and are statistically significant. As to the impacts of the control variables i.e., dependency ratio is found to be negative and openness to trade to be statistically significant which shows a positive impact on GDP per capita. Practical implications – The results resoundingly confirmed the importance of good governance, therefore, reducing endemic corruption and controlling inflation needs to be among the foremost factors for consideration for policymakers in adopting and implementing macroeconomic and public policies. In order to be most effective in tackling corruption, it is important to get to the root of the problem. In light of the study findings, it is suggested that corruption need to be put under control and economies be made more open to attain more benefits and accelerate economic growth and development. Originality/value – Explicitly, this study provides some valuable evidence on the linkage between endemic corruption and economic growth in some Asia and the Pacific countries in particular and on developing world in general. Presumably, this is the first inclusive investigation on the subject under the study in the context of Asia and the Pacific countries and will emphatically contribute to the literature as well.