Farhang Niroomand

Long-run price elasticities and the Marshall-Lerner condition revisited

Abstract In estimating trade elasticities most previous researchers employed nonstationary data and OLS or 2SLS method. With new developments in the literature, this paper uses stationary data and Johansens cointegration analysis to provide new trade elasticities for almost 30 countries.

Openness and economic growth: an empirical investigation

Unlike previous research that investigated the relation between exports and output, in this paper we assess the long-run relation between the degree of openness and economic growth. For the many countries considered here, we find a positive long-run relation between openness and economic growth.

Financial market development and trade openness: evidence from emerging economies

International trade is said to be the engine of economic growth. Despite an enormous effort to explain this phenomenon, the relationship between financial market development and trade openness and integration into the world economy is still an enigma. This article investigates the relationship between financial market development and trade openness. To do this, we develop a long-run and short-run model (a bounds testing approach to cointegration) for 18 emerging economies over the period 1980 to 2011. Estimates from all models show that financial market development, including both the stock market and the banking sector, has significant effect on trade openness in both short-run and long-run phenomena in the majority of countries. Despite many similarities among emerging economies, additional evidence suggests that the link between either stock market development or banking sector development with trade openness works via each country’s specific structure.

An inquiry into openness in international trade

The ratio of exports plus imports to gross national product may be viewed as a measure of openness in international trade. Constructs indexes for 1967, 1980 and 1988, using this ratio for cross‐country comparison of trade patterns. Analysis of variance and regression reveal that the patterns among countries differ according to levels of income, and that there was a trend towards convergence of the index in the late 1980s reversing an earlier trend towards divergence.

Inflow and Outflow of Foreign Direct Investment by Economies

The purpose of this article is to identify the extent of inward and outward foreign direct investment (FDI) worldwide. A large number of countries were aggregated on a regional basis to examine their inward and outward stocks as a percentage of gross fixed capital formation for the period 1980–2006. Among the findings was that the annual increase for both inward and outward FDI was less than 1%. Also, countries grouped by the aggregates developed, Africa, Latin America and Caribbean, Asia and Oceania, and developing were found to differ significantly in their means.

LINKING LABOR PRODUCTIVITY TO ECONOMIC FREEDOM

This paper provides a review of the role of enterprise in a capitalistic setting to promote economic growth. For this purpose, two indexes on productivity and economic freedom were utilized to compare countries grouped by region and income. The finding by relating productivity to economic freedom index of the Heritage Foundation indicates a statistically significant relationship between the two. This gives credence to the hypothesis that economic liberalization induces growth, despite significant gaps in the levels of productivity and economic freedom index between groups of countries.

Banking Bigness: Concentration of the World’s 50 Largest Banks

Industrial concentration is broadly defined as: a few firms controlling a substantial share (assets, revenues) of the market. In the banking sector, this paper shows that the largest 50 banks in the world control about 50 percent of assets of the largest 1,000 banks. Two well known indexes of concentration were used (the Herfindahl and Theil’s entropy) to check the levels of concentration between 1990 and 2002. For purposes of robustness, the world’s largest 100 banks were also investigated. It was found in both cases that the concentration in 2002 was statistically significant as compared to concentration in the previous decade

Geographic and income anatomy of international exports

Purpose - The purpose of this paper is to investigate the levels of extensive (wider set of goods) and intensive (larger quantities of each good) margins for 126 countries grouped by income and development hierarchies. Design/methodology/approach - Analysis of variance and the coefficient of variation were used to find similarities and differences between and within the groups of countries. Findings - Results show that the extensive margin accounts for a large share of exports of rich countries. Originality/value - This paper highlights export margins (extensive and intensive) for groups of countries.

Technology diffusion indexes across countries

Purpose - The purpose of this paper is to investigate differences between 46 countries, 25 of which are EU members, in their technological communication standards and technological efforts. Design/methodology/approach - Two indexes were developed. The first, labeled Index 1, measures the communication standards of the 46 countries. The second index, labeled Index 2, measures their innovative efforts. Three different dimension variables were employed in each index. Analysis of variance and the coefficient of variation were used to find similarities and differences between and within the groups classified as EU and non-EU. Findings - Results show overall that there were no statistically significant differences in means when countries were grouped into EU and non-EU. Originality/value - The paper uses two indexes composed of indication variables to rate and rank 46 countries for their technological diffusion, considering communication standards and innovative efforts.

Assessment of latin American and Caribbean Countries in the international economy

Based on the construction of two composite indices for economic integration, this paper looks at the hierarchical position of Latin America and the Caribbean. The two indices, called the speed of integration and the initial level of integration, are composed of changes and initial values of real trade as a share of GDP, institutional investor rating, FDI as a share of GDP, and manufacturing export as a share of GDP. Mexico ranked first and Peru ranked last for the speed index, while Trinidad and Tobago ranked first and Nicaragua ranked last for the initial level index.