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The Dynamics of Trade Liberalization and Economic Growth of Ethiopia: A Vector Error Correction (VEC) Model Approach
Teshome Hailemeskel Abebe
Issue:
Volume 8, Issue 4, December 2020
Pages:
81-91
Received:
27 October 2020
Accepted:
21 November 2020
Published:
8 December 2020
Abstract: Economic growth is one of the primary goals of developing countries like Ethiopia. Hence, investigating the causes of economic growth in such country is of great importance. Thus, in this study, the impact of trade openness on economic growth of Ethiopia from 1982 to 2019 on data obtained from World Bank (WB) database were investigated. The methodology employed in this study is vector error correction model (VECM). A Unit root test was carried out using the ADF and PP tests. From unit root results, all series are non-stationary at levels. The first differences of all series, however, were found to be stationary. For the study period, there was one co-integrating relationship. The estimated long run model shows the existence of strong positive long-run relationship between trade openness and economic growth. The Block Exogeneity Wald Tests result shows a one-way causality running from trade openness to economic growth. The estimated coefficient of the error correction term (α = -0.702) is negative and statistically significant at the one percent level, indicating about 70.2% of the short run disequilibrium in economic growth will be adjusted within a year (the same year). Moreover, in the short run, one-time lagged trade openness has a significant positive impact on the current growth rate of real GDP. Furthermore, the model diagnostic result shows non-autocorrelation and normal residuals.
Abstract: Economic growth is one of the primary goals of developing countries like Ethiopia. Hence, investigating the causes of economic growth in such country is of great importance. Thus, in this study, the impact of trade openness on economic growth of Ethiopia from 1982 to 2019 on data obtained from World Bank (WB) database were investigated. The methodo...
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Research on the Characteristics of Officials Corruption in Prefecture-level Cities of China
Issue:
Volume 8, Issue 4, December 2020
Pages:
92-100
Received:
15 November 2020
Accepted:
1 December 2020
Published:
11 December 2020
Abstract: Since the 18th National Congress of the Communist Party of China, while continuously strengthening the institutional system construction of corruption governance and promoting institutional reform, China has also unswervingly carried out the continuous high-pressure anti-corruption practice of "fighting tigers", "shooting flies" and "hunting foxes". In this paper, the secretary of municipal party Committee and mayor in prefecture-level cities are taken as the research objects, and the corruption cases which were publicly reported by the official media after the 18th National Congress of the Communist Party of China (November 2012) are collected, and the relevant indicators are selected to analyze the main characteristics of corruption of officials in prefecture-level cities. The study found that: The corruption of officials in prefecture-level cities is concentrated in four high-risk areas such as engineering, personnel, financial management and land. The average age of first corruption is 41.75 years, and the average incubation period of corruption is 11.43 years. Nearly 80% of problematic officials in the investigated cases have been promoted. As China's anti-corruption efforts intensify, the age of officials being investigated is getting younger. The interest chain of corruption is complicated, and corruption has contagious effect. Bribery is the most common and main form of corruption. Finally, this paper puts forward the countermeasures and suggestions for the corruption control of the officials in prefecture-level cities under the current situation.
Abstract: Since the 18th National Congress of the Communist Party of China, while continuously strengthening the institutional system construction of corruption governance and promoting institutional reform, China has also unswervingly carried out the continuous high-pressure anti-corruption practice of "fighting tigers", "shooting flies" and "hunting foxes"...
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Measuring the Tax Incidence of Social Security Taxes in China: Evidence from a Quasi-Natural Experiment of Tax Collection Entity Shift
Issue:
Volume 8, Issue 4, December 2020
Pages:
101-106
Received:
23 December 2020
Accepted:
5 January 2021
Published:
12 January 2021
Abstract: Measuring the tax incidence is a classical yet on-going debate in public economics and public finance. It is also an important issue for policymaking because it provides information of the impact of labour costs on firm decisions. However, the incidence varies across different environments, but the existing literature mostly draws on the experience of developed countries, leaving the developing countries under-investigated. To fill the gap in the literature, this study focuses on China’s case. Its significance derives from the fact that China’s rapid-growing economy relies on its massive population and labour migration while its firms are sensitive to its high social security tax rates. Moreover, the identification of the underlying causality can be failed due to selection bias and simultaneity. Thus, this study exploits a quasi-natural experiment of social security tax collection entity shift to unravel the underlying causal link from social security tax burden to the employment and wages. Drawing a large sample of firm-level data of the above-scale firms in the manufacturing sector of China, this study takes an instrumental variable approach and finds out that the social security taxes significantly suppresses wages by 3.08 percent. Whereas lowered wages increase the employment in turn by 5.26 percent, also suggesting that the tax burden is shared by both the employer and the employee. As for heterogeneities, the empirical evidence of this study shows that the cost effect of social security is more significant in China’s coastal regions where the manufacturing agglomeration is higher, in large-scale firms that have annual income more than 50 million yuan per year, and in non-state-owned firms.
Abstract: Measuring the tax incidence is a classical yet on-going debate in public economics and public finance. It is also an important issue for policymaking because it provides information of the impact of labour costs on firm decisions. However, the incidence varies across different environments, but the existing literature mostly draws on the experience...
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