Public Debt and Economic Growth: Evidence from Tanzania | Chapter 08 | Emerging Issues and Development in Economics and Trade Vol. 1

External debts can have either positive or negative effects on the economic growth of country’s economy. If external debts are used for development expenditure then the country may benefit because development expenditure like infrastructure may have a multiplier effect on boosting economic growth. This paper examines the impact of public debt on economic growth in Tanzania for the period 1970 to 2015. The study utilized co-integration and Vector Error Correction Mechanism (VECM) Approach to test the relationship between public debt and economic growth and granger causality test to examine the causal relationship between variable. The unit root tests showed that all variables were integrated after taking the first difference, the Johansen co-integration result showed that the variables were co-integrated. The VECM estimate showed that there is a negative relationship between public debt and economic growth in Tanzania over the study period. In addition, granger causality test revealed that there is no causal relationship between public debt and economic growth. Based on these findings, this study recommended that Government and policy makers should stop the accumulation of external debt stock overtime and prevent concealing of the motive behind external debt; external debts should be used only for productive investment of highest priorities that would help in yielding returns for economic reasons (productive purposes) and not for social or political reasons.

Author(s) Details

Dr. Salama Yusuf
Department of Finance, Faculty of Business Administration, Zanzibar University, Tanzania.

Aziza Omar Said
Ministry of Trade and Industry, Zanzibar, Tanzania.

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International Relations and Trade between Ukraine and Russia – Through the Looking-Glass | Chapter 07 | Emerging Issues and Development in Economics and Trade Vol. 1

The major part of this paper was written prior to the March-April 2019 presidential election in Ukraine, followed by the July 2019 snap election to the Ukrainian parliament (Verkhovna Rada) which may lead to a revision in both the executive and legislative governments’ policies. The paper reviews Ukraine’s industrialization followed by a deindustrialization in the post-USSR period. I construct an example called the ‘Donbas game’ to illustrate the use of game theory for analyzing deteriorated relations between Ukraine and Russia. Intuitively, the game’s best solution for Ukraine seems to accept separation by the rebellious republics, and for Russia to stop intervening in Ukraine’s affairs. However, the only Nash-equilibrium solution is obtained when respective strategies are (Regain territory, Keep intervening). In a game-theoretical formulation of trade between Ukraine and Russia, the dominant strategies lead to a Nash-equilibrium solution (Trade, Trade). Yet the perceived optimal solution is obtained when both players are concerned with harming the opponent by minimizing the latter’s payoff rather than maximizing their own. The new developments raise expectations that both countries will move away from the outlined strategies in order to achieve a peaceful resolution to the conflict.

Author(s) Details

Fyodor I. Kushnirsky
Department of Economics, Ritter Hall Annex, Temple University, 1301 Cecil B. Moore Ave, PA 19122, Philadelphia, USA.

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A Study on Role of WhatsApp in Agriculture Value Chains | Chapter 06 | Emerging Issues and Development in Economics and Trade Vol. 1

WhatsApp sends real-time messages and is one of the world’s most popular communication applications in the 21st century. The present study highlights and examines the domestication of WhatsApp among farmers. An exhaustive whatsapp user list was prepared from each village and 3 farmers were selected with the help of systematic sampling technique. Thus, 90 farmers from the 3 blocks of the district using whatsapp were purposively selected and grouped for sending the messages of agricultural aspects. The study was conducted at Krishi Vigyan Kendra, Neemuch during 2016-17. Results showed how farmers perceive WhatsApp as a ‘convenient’ communication application, problem solving with audio-visuals, on-time, solution at the time of crisis in their agriculture activities. Some of the critical issues arising from the use of WhatsApp included distractions and exposure to unregulated messages or information. Irrespective of its disadvantages, social media has proved to be an important platform for pluralistic extension, bringing together all the actors in Agriculture Information system and making them shareholders in development.

Author(s) Details

Dr. P. S. Naruka
Krishi Vigyan Kendra, Neemuch, India.

Dr. Shilpi Verma
Krishi Vigyan Kendra, Neemuch, India.

Dr. S. S. Sarangdevot
Krishi Vigyan Kendra, Neemuch, India.

C. P. Pachauri
Krishi Vigyan Kendra, Neemuch, India.

Dr. Shilpi Kerketta
Krishi Vigyan Kendra, Neemuch, India.

Dr. J. P. Singh
Krishi Vigyan Kendra, Neemuch, India.

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State Ownership Makes Stronger the Relationship between Market Power and Income Diversity – A Case of Vietnamese Commercial Banks | Chapter 05 | Emerging Issues and Development in Economics and Trade Vol. 1

The Project on Restructuring the Credit Institution System in the first period from 2011 to 2015 and the second period from 2016 to 2020 has emphasized the important role of reducing the relying on traditional activities and increasing the share of income from non-credit services. The level of non-interest income, per contra, varies from state-owned banks to privately-own bank. The paper, therefore, was conducted to examine the relationship between market power and income diversity under the moderating of state ownership by using a sample of 26 Vietnamese commercial banks, listed in Ho Chi Minh Stock Exchange (HOSE), Ha Noi Stock Exchange (HNX), UPCoM and OTC, during 2007 to 2017. The market power was proxied by both the conventional Lerner index and the efficiency-adjusted Lerner index; the quotient of net non-interest income to total operating income represented the income diversity; and state ownership was treated as a dummy variable and a moderator. Additionally, bank characteristics and country characteristics were considered to be control and dummy variables in the research models. Based on panel data analysis with GMM estimators, the results pointed out that the banks with greater market power can generate more non-interest income. This relationship, moreover, was greatly impacted by state ownership. Specifically, this paper also highlighted that state ownership makes stronger on the association between bank market power and its income diversity. The findings are expected to add the gap in the existing literature, lacking of investigating the impacts of market power on bank income diversity, and the moderating role of state ownership in this relation in Vietnamese banking sector, which is ignored or opposite in most recent studies. Thereby, the paper also gives some useful implications for investors, bank managers as well as policy makers to catch up the market fluctuations.

Author(s) Details

Tin Ho
School of Business, International University, Vietnam National University, HCM, Quarter 6, Linh Trung Ward, Thu Duc District, Ho Chi Minh City, Vietnam.

Quy Vo
School of Business, International University, Vietnam National University, HCM, Quarter 6, Linh Trung Ward, Thu Duc District, Ho Chi Minh City, Vietnam.

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Impact of Interest Rate on Portfolio Management in Nigeria | Chapter 04 | Emerging Issues and Development in Economics and Trade Vol. 1

This study carried out an investigation on the impact of interest rate on portfolio management in Nigeria. Specifically the study analyzed the impact of interest rate on both long term and short term portfolio investments in Nigeria using secondary data sourced from Central bank of Nigeria statistics bulletin and National bureau of statistics for the periods covering 1985 to 2014. The study employed the techniques of co-integration and error correction model, it was discovered that on the long run interest rate specifically prime lending rate significantly influenced portfolio management both on long and short term basis and that total savings exert significant positive impact on the portfolio investment both on long and short term basis. Hence the study recommended that monetary authorities should ensure that the nexus between interest rate and portfolio management is taken into consideration in the process of policy formulations.

Author(s) Details

Ademola E. Ayodele
Department of Banking and Finance, Afe Babalola University, Ado-Ekiti, Nigeria.

Babatunde Afolabi
Department of Economics, Afe Babalola University, Ado Ekiti, Nigeria.

Awoniyi C. Olaoye
Department of Banking and Finance, Afe Babalola University, Ado-Ekiti, Nigeria.

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New Trends in Rural Community Development in Africa: The Case of Cameroon’s Grassfield Rural Development Project | Chapter 03 | Emerging Issues and Development in Economics and Trade Vol. 1

This chapter examines a new trend in rural community development practice using the Cameroon Grassfield Rural Development Project, to highlight the outcomes and challenges of participatory development in an African context. There is an on-going debate about the future of the rural sector in developing countries, centred on implementation of participatory projects to alleviate poverty and deteriorating rural living conditions. Using data from project documents and evaluations, participant observation and interviews with key stakeholders, this paper examines project outcomes achieved in the priority communities that underwent the new policy implemented between 2004 and 2010. The project provides a new approach to engage the state and local government stakeholders in strategic decisions on long-term rural development. Achievements are evident in community infrastructure (classrooms, community halls, feeder roads, improved water schemes, slaughter slabs, rural radio), and also in social capital and enhanced leadership. However, challenges remain in the implementation of participatory projects; and dependence on external sources of funding community projects persist, due to hash economic constraints and long-term neglect in providing rural areas with quality services. Changes in rural areas are increasingly challenging government to undertake policy adjustments and develop a dual role of service delivery and support for community capacity.

Author(s) Details

Fonteh Athanasius Amungwa
Department of Sociology and Anthropology, Faculty of Social and Management Sciences, University of Buea, Republic of Cameroon.

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Development of Indonesian Micro, Small and Medium Enterprises and The Utilization of the Internet | Chapter 02 | Emerging Issues and Development in Economics and Trade Vol. 1

In the current era of globalization, small businesses are required to be able to compete in the market. One way for them to be able to compete is to utilize information technology in the form of Internet media. This study aims to examine recent development of micro, small, and medium enterprises (MSMEs) and to explore the use of the Internet by micro and small enterprises (MSEs) in Indonesia. For this purpose, it analyzed secondary data and primary data collected from face-to-face interviews with randomly selected 482 owners of MSEs in various cities and types of business. The secondary data analysis shows that MSMEs in Indonesia are dominated by MSEs, i.e. accounted for almost 100 per cent of all firms, but only contributed between 58 to 61 per cent of gross domestic product (GDP). Only a small fraction of MSEs in the country utilize the Internet for their businesses, although it varies by province and type of business. From the primary data analysis, it reveals three interesting findings, namely: (i) manufacturing industry is the type of business with the most Internet usage; (ii) young respondents use the Internet more than older respondents; and (iii) higher educated respondents are more likely to use Internet in running their businesses than low educated respondents.

Author(s) Details

Mr. Tulus Tambunan
Center for Industry, SME & Business Competition Studies,University of Trisakti, Jakarta, Indonesia.

Ida Busnetti
Center for Industry, SME & Business Competition Studies, University of Trisakti, Jakarta, Indonesia.

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The Single European Financial Market: Euro-Zone Debt Crises and Its Regulations | Chapter 01 | Emerging Issues and Development in Economics and Trade Vol. 1

The intent of this work is to present the single European financial market and discuss the pros and cons of its integration in the European Union, the Euro-zone debt crises, its strict regulations (austerities), and its effect on the member-nations’ economies, financial institutions, financial markets, employment, national wealth, and social welfare. An efficient (uncorrupted) financial market might increase return, reduce risk, improve investment, production, and liquidity in the economy, but at the same time, inefficient monetary policies can cause bubbles, unemployment, dependency on foreign capital and multinational firms, and the worst of all the investors lose their wealth and the social welfare is declining. Governments have to increase regulations and improve efficiency of the financial market. Financial markets and institutions (investment banks) have proved recently, with the latest financial (debt) crisis, which has been created by the uncontrolled private institutions that they cannot improve stability and certainty. The financial market is a source of long term capital, but banks can provide similar and less risky services. The European integration with its dubious Maastricht criteria and the common currency, among different nations, have created an enormous social cost to the member-nations and their benefits are too small to cover it; especially, the loss of public policy (fiscal, monetary, and trade), the forced privatizations, the Troika’s austerities for the members and the destruction of the sovereign nations are irreplaceable. The optimal level of integration of the European financial markets and the prevention of its crises are the ones that can maximize the social welfare of the member-nations.

Author(s) Details

Dr. Ioannis N. Kallianiotis
Department of Economics and Finance, The Arthur J. Kania School of Management, University of Scranton, Scranton, PA 18510-4602, USA.

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