Volume 14, Number 3, 2022

EN:

This paper attempts to analyze the growth effects of social security expenditures in Germany from a time series perspective. Therefore, a regression model based on standard determinants of growth is specified and estimated as a vector error correction model. Results show that there is a bidirectional relationship between growth and social security expenditures. In the short run, social security expenditures and growth rates are inversely related. Lower or even negative growth rates cause higher expenditures of the welfare state. In the long run, there is also an inverse relationship, but the direction of causality changes. Higher social security spending triggers lower growth rates. Robustness tests confirm the stability of the results.

EN:

The START-UP NY program is a creation-based entrepreneurial policy that sets up enterprise zones in several New York counties. The purpose of this study is to test the hypothesis that the program does not affect entrepreneurial activity in the industrial sectors it targets: manufacturing and high technology. Unlike many of the studies in the literature, which use indirect measures of entrepreneurial activity (e.g., unemployment rates, poverty rates, local economic growth, etc.), this analysis employs a direct measure—the number of firms that are targeted by the policy. Complicating the analysis is the state’s subsequent tax reforms, which were implemented to promote creation- and discovery-based entrepreneurship in all parts of the state. To test our hypothesis, we control for this reform (and other factors) in a multiple equation difference-in-differences model. The results show that START-UP NY increases the number of ‘micro’ and ‘small’ firms in the targeted sectors by between 16.7% and 19.7% in the five years after the program was enacted.

EN:

To study the role of Information and Communication Technology (ICT) on countries’ socioeconomic development, the paper investigates the case of Facebook penetration on improving their standing as measured via GNI per capita PPP (Gross National Income per capita based on purchasing power parity). We use four macro factors categories (political, economic, demographic, and technological) in addition to Facebook penetration per capita in order to measure the potential influence of various factors on the socioeconomic level of countries. While the analyses of ICT effect on development has been the focus of many papers in the past, the specific analysis of social media is scarce. Compared to previous studies investigating social media role, we use a large dataset covering all classes of countries and examine holistically many types of determinants using different models. In addition, we distinguish our paper using the economic classification of countries according to the World Bank. Our study indicates that Facebook penetration has a significant positive role on the socioeconomic level of countries, but such role varies depending on the countries’ classification level. Besides, there is a decreasing marginal effect showing the importance for policy makers to assess the complex dynamic behind the characteristic of each country.

EN:

Japan achieved phenomenal economic growth after WWII. Starting in the early 1990s, however, the Japanese economy began experiencing a prolonged deflation-stagnation period widely known as the “Lost Decades”. Based on data from the World Bank and the Federal Reserve Bank of Saint Louis, this paper employs an autoregressive distributed lags (ARDL) model to find evidence of a long run relation among the real GDP, real imports, the real exchange rate, and the public debt-to-GDP ratio for Japan. Once cointegration is established with the Bounds Test, Granger Causality tests are performed by employing an estimated Vector Autoregressive (VAR) model with the same variables. The empirical results support Granger causality in all directions. In particular, we found real imports and public debt-to-GDP ratio to directly cause real GDP. Interestingly, the real exchange rate causes real GDP indirectly via imports. The public debt had a negative effect on GDP but did not wreak havoc on the Japanese economy. The study also examines whether former Prime Minister Shinzō Abe’s unprecedented macroeconomic policies and structural reforms launched in 2013, known as Abenomics, are pulling Japan out of its economic doldrums.

EN:

This paper presents a model of a forward-looking government wooing foreign direct investment by enacting policies that reflect its commitment to the foreign enterprise. The ease with which the government is able to spend or carry out economic reform to complement the foreign venture evolves over time and influences the likelihood of its sustained commitment. The domestic and external strength of the government, the stability and not necessarily the level of returns from the project, venture-specificity of government spending or reform, and public and elite attitudes toward foreign commercial entry determine how invested the government remains in the long term success of the enterprise. More committed governments tend to be stronger and prefer robust investor-regime relationships. Reform that is not designed too narrowly to favor the investor is also less likely to be reversed later. Like pro-FDI public sentiment, a noisy policy environment induces deeper government commitment.