Naseem Abu-Jamie

DOI: https://doi.org/10.6000/1929-7092.2020.09.26

Published: 03 September 2020

Abstract: Motivation: This paper aims to examine the impact of financial development on economic growth.

Novelty: The study enriching literatures and provide a baseline for further researches.

Methodology and Methods: This article uses the system GMM to analyze data, to ride of the reverse causality problem and considering a dynamic model.

Data and Empirical Analysis: The used data for 193 countries around the world, the study used domestic credit to the private sector as a percentage of GDP, board money definition M3, and financial market capitalization as proxies to indicate financial development. Whereas GDP per capita growth rate is used as a proxy for economic growth.

Policy Considerations: The study finds that there is a significant mild positive impact of financial development on economic growth, this paper recommended further researches to investigate the impact over the developing and developed countries separately by using dynamic models.

Keywords: Financial development, economic growth, developing economies.

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Obey Dzomonda

DOI: https://doi.org/10.6000/1929-7092.2020.09.27

Published: 03 September 2020

Abstract: The purpose of this paper was to demystify the role of social entrepreneurship as a vehicle towards sustainable development in South Africa. This study adopted a quantitative research design as it intended to obtain and analyse numerical data. Data was collected using a self-administered questionnaire in a survey. A sample of 60 social entrepreneurs was conveniently sought to participate in the study. Data was analysed using factor analysis and regression analysis. Reliability of constructs was tested using the Cronbach’s alpha. Descriptive statistics showed that the surveyed social entrepreneurs possess high levels of social entrepreneurship as measured by empathy, moral obligation, social mission and social innovation scales. The regression results validated the key role of social entrepreneurship towards sustainable development in South Africa. A significant and positive relationship was established between SE and ECS (β, 0.691; p.0.011) and between SE and SS (β, 0.431;p.0.002). On the other hand, no significant relationship was found between SE and ES (β, 0.052; p.0.321). The paper concludes that developing a huge social entrepreneurship base will immensely contribute towards the attainment of sustainable development in South Africa. Recommendations were made for the government to launch policies favouring social entrepreneurship growth.

Keywords: Innovation, Social mission, Social Entrepreneurship, South Africa, Sustainable development.

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P.N. Brusov, T.V. Filatova, N.P. Orekhova, V.L. Kulik , S.-I. Chang and Y.C.G. Lin

DOI: https://doi.org/10.6000/1929-7092.2020.09.28

Published: 03 September 2020

Abstract: During a couple years we have suggested a new approach to rating methodology of non–financial issuers, as well for project rating. The key factors of a new approach are: 1) The adequate use of discounting of financial flows virtually not used in existing rating methodologies, 2) The incorporation of rating parameters (financial "ratios") into the modern theory of capital structure (Brusov–Filatova–Orekhova (BFO) theory) and into its perpetuity limit.

Recently we have generalized the Modigliani and Miller theory for a more realistic method of payments of tax on profit: for the case of advance payments of tax on profit, which is widely used in practice. Modigliani – Miller theory accounts these tax payments as annuity–immediate, while in practice these payments are making in advance and thus should be accounting as annuity–due. We have shown that this generalization leads to some important consequences, which change seriously all the main statements by Modigliani and Miller.

In current paper we use the modified Modigliani – Miller theory (MMM theory) and apply it for rating methodologies needs. A serious modification of MMM theory in order to use it in rating procedure has been required. The financial "ratios" were incorporated into MMM theory. The dependence of the weighted average cost of capital (WACC), which plays the role of discount rate, on coverage and leverage ratios is analyzed.

Obtained results make possible to use the power of this theory in the rating and create a new base for rating methodologies.

Keywords: Modified Modigliani–Miller theory, Brusov–Filatova–Orekhova (BFO) theory, advance payments of tax on profit, rating methodologies.

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Senaka Ramyanath Ginige and N.S. Cooray

DOI: https://doi.org/10.6000/1929-7092.2020.09.29

Published: 03 September 2020

Abstract: Rice is the main staple food in Sri Lanka. There will be a potential increase in demand for rice due to the high population growth in the years to come. As the cultivable area is limited, the only way to increase required supply is to improve the yield level. However, there are a limited number of district level studies, which examined the factors that influence the paddy production in Sri Lanka. Hence, this study aims to identify the factors, which increase the paddy production in Sri Lanka with particular reference to fertilizer usage, guaranteed paddy price, temperature and rainfall. District-wise data were collected over the period from 1979 to 2019. An autoregressive distributed lag (ARDL) model was used to examine the short-run and long-run relationships between the paddy production and explanatory variables. According to the estimated model, the temperature has both significant positive and negative long-run relationships with paddy production in several districts. Furthermore, results reveal that paddy production in many districts had positive long-run relationships with the usage of the mixture of organic and chemical fertilizer. Hence, the findings of this study provide valuable policy insight for decision makers to redesign the chemical fertilizer subsidy in Sri Lanka. Our results also reveal that the use of organic fertilizer contributes to an increase in paddy production in both short-run and long-run. Hence, it is our opinion that sustainable agricultural practices combined with the removal of market distortions will lead to establishing an economically efficient paddy production system in Sri Lanka.

Keywords: Cointegration, Fertilizer usage, Guaranteed paddy price, Long-run relationship.

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Dang Thi Viet Duc and Dang Huyen Linh

DOI: https://doi.org/10.6000/1929-7092.2020.09.30

Published: 25 September 2020

Abstract: Vietnam has early set the strategy to develop ICT as the enabler for social-economic development and the Vietnamese ICT sector has grown significantly over the past 20 years. This paper analyses the development of the ICT sector by examining the sources of output growth and the structural changes in two periods of 2007-2012 and 2012-2016. The decomposition results show that the growth of the ICT manufacturing sector is attributed to export in both periods. However, the ICT manufacturing export was mainly based on components import; the sector neither could make any technological progress nor could manufacture products for import substitution. The ICT media and content sector’s growth was primarily due to technology advancement in 2007-2012 which led to the household demand-based development in the period 2012-2016. The ICT services sector shifted from primarily served government to household demand while technology was also significantly improved. The results of decomposition analysis are consistent with the macroeconomic situation as well as the ICT policies that the Vietnamese government has implemented over the past years. The paper points out the achievements and limitations in the ICT development policies and suggests directions for ICT policymakers in Vietnam in the coming period.

Keywords: ICT, sources of growth, structure decomposition analysis, IO, Vietnam.

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