system GMM

In this study, the linkages between political dynamics and foreign direct investment inwards to 118 developed and developing countries over the 2002-2017 period were analysed by the System GMM Panel Model to avoid the potential endogeneity problem. Findings indicate that the most vital positive determinant of FDI inwards is trade liberalization or trade openness. Also, there is no statistically significant relationship between countries' democratization and freedom level and FDI inwards. However, terrorism hinders FDI directly, especially in developed countries. Therefore, the decision of foreign investors might mainly depend on economic dynamics, which are related to them and host countries rather than politics.

The aim of this research is to explore the relationship of corporate governance with firm risk. This study establishes a link between corporate governance variables and firm risk for a sample of 106 Pakistani firms over a time of six years (2005-2010). Based on the estimation results, family control and bank control have negative impact on the firm risk whereas ownership structure and chairman/CEO duality posit positive relationship with risk. This provides a direction for firms to introduce more non-family control to the board of directors and not allow banks to have majority shareholding in their stocks. Also, directors should be asked to have a reasonable ownership in the stocks of the firm so that they can decide in the best interest of the firm and for the increase of their stock value. Chief executive should also hold the chair in order to have unity of command and a better decision-making influence.

This study aims to empirically analyze the impact of governance quality on tax effort in Sub-Saharan African (SSA) countries. Based on a dataset for 37 SSA countries over the time period of 2002-2015, the governance and tax effort relationships is examined by using conventional panel data models and system-generalized method of moment (Sys-GMM) estimators. Unlike previous studies, this study analyzes the impact of both six governance indicators of the World Bank and the composite quality of governance index on tax effort. The empirical findings indicated that composite governance and all of the governance indicators positively affect tax effort in SSA countries. The robust empirical findings also indicate that democracy representatives such as voice and accountability and the rule of law are relatively more important determinants of tax effort in SSA countries.

Though the measurement and implication of human capital on economic growth has been well established since the works of Becker in the 1960s, recently Florida has argued that creative class is superior to human capital in explaining economic growth. The underlying difference between the two scholars is a measurement approach in which while Becker uses education as indicator of human capital Florida employs occupation as an identifier of the creative class. We exploit administrative data from the Institute for Employment Research (IAB) over the years 1998-2008 and employ system GMM to estimate and compare the effects on regional economic performance of human capital and creative class in Germany where economic performance is measured by GDP growth, employment growth and wage growth. The estimation unveils that analysis of regional economy through creative class in place of human capital can be used as an alternative approach yet the creative class, as has been praised by Florida, is n...

Recorded international remittances to sub-Saharan African countries reached US $28 billion in 2009 and are projected to increase to reach US$ 41 billion in 2016. However, empirically it is unclear how these private transfers affect the financial sector. This paper investigates the effect of international remittances on the level of credit provided by the domestic banking sector in sub-Saharan Africa using a panel of thirty countries over five time periods, composed of non-overlapping averages from 1990 to 2012. Though sub-Saharan African region receives the least portion of the total recorded remittance flows to all developing regions, the study finds that international remittances have positive and significant effect on aggregate level of credit provided by the banking sector in the region after controlling for macroeconomic variables that are commonly used to explain financial development in developing countries. The results hold after accounting for potential endogeneity of remit...

Making use of an original data set we investigate the employment dynamics of a panel of Italian manufacturing firms over 2002-2010, and check whether, during the onset of the financial crisis (2008-2009), foreign multinational firms (fm) operating in Italy show a different employment adjustment with respect to domestic multinationals (dm) and to non multinational firms (nm). This paper is the first to test this issue for Italy and follows the benchmarking literature on other countries. We carry out an extensive descriptive analysis relative to firm characteristics and to employment growth over the period disaggregated by the three firms types, also taking into account subsamples of firms with different size and geographical location. We also estimate a gmm System dynamic panel model allowing the global crisis to impact differently on firms employment. A strong evidence of heterogeneity in terms of productivity, wages and financial indicators and of regional location is observed acro...

Though the measurement and implication of human capital on economic growth has been well established since the works of Becker in the 1960s, recently Florida has argued that creative class is superior to human capital in explaining economic growth. The underlying difference between the two scholars is a measurement approach in which while Becker uses education as indicator of human capital Florida employs occupation as an identifier of the creative class. We exploit administrative data from the Institute for Employment Research (IAB) over the years 1998-2008 and employ system GMM to estimate and compare the effects on regional economic performance of human capital and creative class in Germany where economic performance is measured by GDP growth, employment growth and wage growth. The estimation unveils that analysis of regional economy through creative class in place of human capital can be used as an alternative approach yet the creative class, as has been praised by Florida, is n...

This study attempts to identify the effect of inequality on growth by using Brazilian data, in order to mitigate comparability problems present in cross-country studies. The econometric method System-GMM was used and compared with other three econometric methods (OLS, Panel Within Groups, and GMM) in a dynamic panel, aiming to use a consistent estimator in the presence of endogeneity in the analysis that involves inequality and growth. Our results suggest that the hypothesis of nonlinearity between the variables cannot be rejected. The same conclusion holds for hypothesis of incomplete credit markets and the argument from political economy that redistributive policies mitigate growth.

Economic complexity showing a holistic measure of countries' economic productive power and characteristics has become a new tool for understanding the dynamics of the economy. Examining the relationship between sustainable development and this new tool is vital in determining new policies. By applying panel data of OECD countries covering different development levels from 1996 to 2017 to a data-driven dynamic econometric model, the research provides fresh insight between sustainable development and economic complexity. The results indicate that economic complexity is significantly affected by sustainable developments' economic indicators such as GDP, FDI, R&D expenditure, social indicators such as human development, income inequality, and environmental indicators such as productionbased CO2 emissions, renewable energy consumption, and greenhouse gas. The research, consequently, suggests that switching to technology and knowledge-based production processes, expanding qualified production factor capacity, raising social living standards, and making investments in the green economy will foster economic complexity while ensuring stable sustainability.

In this research, we analyze the determinants of the real exchange rate through the fundamentals and behavioral factors, adding other variables as monetary aggregates, economic growth, domestic savings, and productivity. We worked with thirteen Latin American countries from 1980 to 2018 and we used three estimates such as fixed-effects, random-effects, and System GMM. The findings show that although the real exchange rate has a large random component, due to the high coefficient presented by the past values of that variable, there are other variables such as terms of trade, net foreign assets, tax revenue, monetary aggregates, savings rates and productivity, or real interest rate differentials, relative price and economic growth, which can impact negatively and positively respectively.

In this study I empirically examine the impact of immigration on the dynamics of housing prices across Italian provinces from 1996 till 2007. The massive debate upon the impact of current intensive immigration flows on the wellbeing of the native Italian population and Europeans in general is mainly focused on labor market outcomes which is, however, only one of the channels though which the real income and wealth can alter. This paper contributes to our understanding of the influence that recent intensive immigration flows have on the Italian economy by estimating its impact on the housing market. Moreover, it exploits different methodological approach with respect to the approach dominating in migration literature. Using the number of valid residence permits as a measure of immigration stock and the self-reported housing values from the Survey of Households Income Wealth in Italy I find that the increase in the concentration of immigrants in the Italian provinces has a positive but declining effect on the average housing prices in provinces. The obtained results also indicate that an increase of in immigrant population leads to an increase in average housing prices. The performed Difference and System GMM estimations confirm both the positive response of average housing prices to the increase in immigrant population and the non-linearity of its response to immigrants’ concentration in all specifications.

Current account balance has played a role to enhance economic growth in Bangladesh. The major concentration of this study is to analyze the current account components of the balance of payment (BOP). This paper deals with quarterly base data from 2012Q3 to 2019Q4. The Generalized Method of Movement (GMM) technique has been implied to measuring the current account impact on economic growth. Four models have been developed where the estimated models deal with the current account balance (CAB) as the key variable. The result of model-1 represents that the current account has a negative relationship with economic growth in consideration of merchandise goods export and import. Model-2 to 4 represents that the current account has a positive impact on economic growth in Bangladesh. The sufficient current account is expected towards the purpose of financial and economic development where trade balance and service account have a significant role.

Current account balance has played a role to enhance economic growth in Bangladesh. The major concentration of this study is to analyze the current account components of the balance of payment (BOP). This paper deals with quarterly base data from 2012Q3 to 2019Q4. The Generalized Method of Movement (GMM) technique has been implied to measuring the current account impact on economic growth. Four models have been developed where the estimated models deal with the current account balance (CAB) as the key variable. The result of model-1 represents that the current account has a negative relationship with economic growth in consideration of merchandise goods export and import. Model-2 to 4 represents that the current account has a positive impact on economic growth in Bangladesh. The sufficient current account is expected towards the purpose of financial and economic development where trade balance and service account have a significant role.

Aside economic factors causing low human development which have been extensively studied in literature, the implications of high level of corruption and weak governance prevalent in sub- Saharan African (SSA) countries have not been explored. The study assessed the effects of corruption, government effectiveness and their joint effect on human development in SSA. Data collected on thirty-seven (37) countries within the period of 2005 to 2018 were analyzed using system Generalized Method of Moment which was most suitable for the dataset. Results indicated that lagged human development index (P<0.01), government effectiveness (P<0.05), economic growth rate (P<0.1) and government health spending (P<0.1) had significant positive effect on human development while corruption and its interaction with government effectiveness did not. The results of Arrelano-Bond test of first order autocorrelation and second order autocorrelation of error term as well as the Sargan test and Han...

EXTENDED ABSTRACT This study first deals with the tax structure of 31 transition economies in the period 2010-2019, which consists of tax rates, tax tariffs, and tax revenues. In this context, to evaluate the components of the tax structure, an evaluation was made by relating tax rates and tax response, economic freedom with tax revenues, and finally corruption and GDP per capita. Then, the factors that add to the corruption index of 24 transition economies in the 2010-2019 period were analyzed with panel data analysis. While corruption is the dependent variable in the model, tax revenues (control variable), GDP per capita, commercial openness, economic freedom, corporate tax rate, income tax rate, and excise tax rate are included as independent variables. In this context, the scope of the study is to examine the tax structure of transition economies in the 2010-2019 period and then analyze the institutional determinants of the tax structure of 24 transition economies. In this context, the study aims to investigate whether the tax system is rationalized as financing the transition process. In other words, the first purpose is to examine the relationship of the tax structure in these countries with tax response, economic freedom, and corruption. Secondly, in countries where free-market institutions are not developed, factors affecting the problem of corruption, such as bribery as a substitute for taxes, are examined in the tax system. In the study, tax rates, tax revenues, and tax tariffs are analyzed with descriptive and predictive statistical methods. Descriptive statistics, which is one of these methods, converts numbers and observations into descriptive indices. It is used to summarize, organize, and reduce many observations. Descriptive statistics are the best way to summarize data and interpret research results. On the other hand, inferential statistics are used to draw conclusions and make predictions in determining the similarities between the population and the sample. Additionally, many research questions require predictions about the universe from the sample. According to the results, corruption is high in countries with a low economic freedom index. Similarly, GDP per capita is low in economies with high corruption. It can be said that bribery in transition economies is seen as a substitute for tax due to reasons such as high tax burden, low justice in income distribution, and the institutional weakness of tax administrations. Within this framework, according to the findings of static analysis, a one-unit increase in income per capita in transition economies positively affects corruption at 0.0371%, openness at 0.0134%, economic freedom at 0.0394%, and income tax rate at 0.0122%. According to the findings of the dynamic analysis, two variables negatively affect corruption. Among these, economic freedom corruption negatively affects 0.073% and excise taxes 0.108%. On the other hand, tax revenues (0.064), per capita income (0.056), trade deficit (0.073), and income tax rate (0.063) positively affect corruption. The corruption perception index was used in the study to examine the institutionalization of the tax system. The relationship between economic freedom, which was examined in the first part, corruption, and GDP per capita was analyzed in the second part with panel data analysis. In this context, panel data analysis has been done with static and dynamic models. This is because the dynamic analysis does not neglect the periodic effect and the static analysis detects the annual effect. In static analysis, first, the F test, LR test, LM test, and ALM test were used to determine estimators. As a result of these tests, it was concluded that the pooled least squares method (PLSM) is invalid, and the random-effects (RE) model is valid. Then, the Hausman test was conducted to test the random effects model against the fixed effects (FE) model and the fixed effects estimator was decided upon. Variance, autocorrelation, and inter-unit correlation tests were performed for the three basic assumptions of the fixed effects estimator, and it was found that all three questions were present. For this reason, the Driscoll / Kraay fixed effects regression test was conducted, which gives consistent results against these problems. Additionally, the Arellano and Bover / Blundell and Bond system generalized moments (System GMM) estimators were used for dynamic panel analysis. The existence of autocorrelation in the model was checked by AR (1) and AR (2) statistics and it was concluded that there was no second-order autocorrelation. Using the Sargan test in the prediction tested the validity of the vehicle variables and it was concluded that it is appropriate. ÖZ Tarihsel mirasında kurumsal vergi sistemine sahip olmayan ekonomiler bağımsızlıklarıyla birlikte vergi sistemi tesisi arayışına girmişlerdir. Böyle bir sistemin esas unsuru olan vergi yapısı ise geçiş ekonomilerinin serbest piyasa reformlarının finansmanı anlamına gelmektedir. Çalışmanın amacı, 31 geçiş ekonomisinin mevcut vergi yapısını değerlendirmektir. Ek olarak, vergi yapısı ve vergi sisteminin kurumsal yapısının etkinliğini değerlendirmek amacıyla 24 geçiş ekonomisinde yolsuzluk ile toplam vergi yükü, kişi başına düşen GSYH, dışa açıklık, ekonomik özgürlük, kurumlar-gelir-tüketim vergisi oranları ilişkisi incelenmiştir. Bu amaçla statik ve dinamik panel veri analizi yapılmıştır. Sonuçlarına göre ekonomik özgürlük endeksi düşük olan ülkelerde yolsuzluk yüksek seyretmektedir. Benzer şekilde yolsuzluğun yüksek olduğu ekonomilerde kişi başına düşen GSYH düşüktür. Vergi yükünün yüksek, gelir dağılımında adaletin düşük ve vergi idarelerinin kurumsal zayıflığı gibi nedenlerden dolayı geçiş ekonomilerinde rüşvet, verginin ikamesi olarak görüldüğü söylenebilir. Bu çerçevede statik analiz bulgularına göre geçiş ekonomilerinde kişi başına düşen gelirde bir birimlik artış yolsuzluğu %0,0371, dışa açıklık %0,0134, ekonomik özgürlük %0,0394 ve gelir vergisi oranı %0,0122 pozitif etkilemektedir. Dinamik analizin bulgularına göre yolsuzluğu negatif etkileyen iki değişken bulunmaktadır. Bunlardan ekonomik özgürlük yolsuzluğu %0,073 ve tüketim vergileri %0,108 negatif etkilemektedir. Diğer taraftan vergi gelirleri (0,064), kişi başına düşen gelir (0,056), ticari açıklık (0,073) ve gelir vergisi oranı (0,063) yolsuzluğu pozitif etkilemektedir. Anahtar Kelimeler: Geçiş ekonomileri, Vergi yapısı, Yolsuzluk, Sabit etkiler, Sistem GMM

In this study, the relationship between R&D and growth is determined by the model which is produced according to Cobb Douglas production function. Data were analyzed between 10 largest EU countries and Turkey from 1996 to 2018. The econometric methods used in the analysis are fixed effects model, random effects model, GMM and system GMM. As a result, growth rate is most affected by government budget allocations for R&D. The increase in the government budget allocations for R&D increases the growth rate more than other variables.

This presentation was prepared to analyze the distinction to credit to households and firms and economic growth correlation by using Sytem GMM econometric panel data analysis. It is shown in the paper that economic theory and emprical analysis are the same in the regard of efficiency of credit composition.