Research

Publications in Refereed Journals and Book Chapters

COVID-19 Economic Policy Response, Resilience and Tourism Recovery. Annals of Tourism Research Empirical Insights (2022). (with Luke Emeka Okafor and Sasidaran Gopalan). (link)

Abstract.

This study investigates whether tourism sector recovery from the COVID-19 pandemic is influenced by only the size of the economic stimulus packages or whether a country’s resilience plays a moderating influence in the underlying relationship. The results show that while economic stimulus packages help to enhance tourism recovery from the COVID-19 pandemic, it is contingent on the level of a country’s resilience. For instance, amongst the less resilient countries, the impact of economic policy response on the tourism recovery is more pronounced, but the effect dissipates as countries become more resilient. These findings have important implications for policymakers, management teams, and relevant stakeholders in their effort to revive the tourism sector from the impact of the COVID-19 pandemic.
From Diversification Resistance to Sustainable Diversification: Lessons from the UAE’s Public Policy Shift. Management & Sustainability: An Arab Review (2022). (with Amany A El Anshasy). (link)

Abstract.

Purpose: This paper critically analyses major shifts in the UAE’s public and economic policy, particularly examining the transition from oil dependency to diversification and then to sustainability and resilience. It aims to provide insight into the facilitators, inhibitors and future of sustainable development in the UAE.
Design/methodology/approach: The paper reviews evidence on diversification resistance, the resource trap and sustainable development, and draws attention to the dynamics of policy reform in the UAE, especially after the COVID-19 pandemic.
Findings: The findings of this study indicate that not all patterns of diversification result in sustainable development and resilient economies. The evidence also suggests that achieving sustainable and resilient growth does not necessarily come at the cost of economic prosperity. After decades of extraordinary diversification, the UAE’s economic policy has undergone a paradigm shift. Years of fluctuating oil revenues, increasingly globalised markets, environmental obligations and significant recent structural changes in energy markets have paved the way for a new emphasis on sustainable diversification and economic resilience.
Originality/value: The paper provides novel insight on the UAE’s transition to a sustainable and resilient economy and contributes to the current public policy debate about the future of economic policies in the UAE on sustainable diversification initiatives and the trade-offs that emerge from embracing sustainable diversification and economic resilience goals.
Do the Size of the Tourism Sector and Level of Digitalization Affect COVID-19 Economic Policy Response? Evidence from Developed and Developing Countries. Current Issues in Tourism (2022). (with Luke Emeka Okafor and Laura Elizabeth Moreno Gama). (link)

Abstract.

This study investigates the link between COVID-19 economic policy response, the tourism industry, and digitalization by income levels. It also examines the moderating influence of income levels and digitalization on the underlying link between COVID-19 economic policy response and digitalization while controlling for the tourism sector. The results show that developing countries devoted fewer resources towards curbing the negative impact of the COVID-19 outbreak compared to developed countries. High-level of digital access in some developing countries, however, enabled them to introduce lower economic stimulus packages to lessen the impact of the outbreak on the tourism industry. The results also indicate that economies with a larger tourism sector accompanied by higher levels of digitalization devoted fewer public funds to COVID-19 economic stimulus packages. The influence of digitalization on the underlying link is, however, income level dependent. For example, developing economies that are more digitized, accompanied by having a larger tourism sector, allocated more public funds to economic stimulus packages relative to developed economies. This suggests that the pressure to introduce massive stimulus packages is lower when tourism providers are better prepared to use more digital tools during a pandemic, especially in developed economies.
Do Birds of a Feather Flock Together? Analyzing Environmental Performance and Tourist Behavior Using a Gravity Approach. Tourism Economics (2021). (with Muhammad Shafiullah and Luke Emeka Okafor). (link)

Abstract.

This study examines whether international tourism flows are affected by differences in the environmental performance of origin and destination countries by conducting an empirical analysis with a gravity panel dataset of 169 origin countries and 157 destination countries from 2000 to 2015. Estimated results show that the difference between environmental performance of a country pair adversely affects international tourism flows. This implies that tourist behavior is particularly influenced by familiarity, behavior conformity, and the need for virtue-signaling. Results also suggest that better environmental performance of the destination relative to the origin, as captured by an overall environmental performance index or its sub-indices, lowers international tourism more than vice-versa. This effect potentially hinges on the tradeoff between functionality and the image of the international tourist destination. Policies that create an enabling milieu for sustainable tourism and environmental practices—such as ecolabeling and targeted advertising—would help attract more environmentally conscious tourists.
The Effect of Migration on International Tourism Flows: The Role of Linguistic Networks and Common Languages. Journal of Travel Research (2021). (with Luke Emeka Okafor and Katarzyna Burzynska). (link)

Abstract.

We investigate the effect of migration rates on international tourism flows and whether linguistic networks and common languages affect the relationship between migration rates and tourist flows. We utilize the gravity data set consisting of 166 origin and 30 destination countries, over the 1995–2010 period for the empirical analysis. The results show that increased migration rates lead to higher international tourism flows in destination countries. This effect becomes even stronger when the destination country has a larger linguistic network. Migration matters less, however, when a country-pair shares closer linguistic ties. The findings of this study will help to inform public, and tourism industry policies aimed at boosting sustainable tourism flows, especially post COVID-19 pandemic. Targeted immigration policies, such as those that seek to attract foreign workers with specific skill sets, tend to enlarge linguistic networks and contribute to multilingualism, which in turn can boost international tourism flows.
Does the Level of a Country’s Resilience Moderate the Link between the Tourism Industry and the Economic Policy Response to the COVID-19 Pandemic?. Current Issues in Tourism (2021). (with Luke Emeka Okafor and Katarzyna Burzynska). (link) (Full text can be viewed here)

Abstract.

This study examines whether the level of a country’s resilience to shocks moderates the link between the size of the tourism industry and the economic policy response to the COVID-19 pandemic using data from 113 countries. The findings suggest that countries with large tourism sectors responded more aggressively by using economic stimulus packages to mitigate the impact of the COVID-19 pandemic; however, the impact of the tourism sector is moderated by the country’s resilience to shocks. The study also finds that both high level of economic resilience and high level of risk quality of a country moderate the link between the tourism sector and the economic policy response to the COVID-19 pandemic. The findings of the study suggest that tourism businesses in high resilient countries are better prepared to cope with the disruptive challenges posed by the COVID-19 pandemic and thus needed less assistance from governments. Improving a country’s resilience to shocks is an important strategy to minimize the impact of future negative shocks in the tourism sector.
Do Regional Trade Agreements Enhance International Tourism Flows? Evidence from a Cross-Country Analysis. Journal of Travel Research (2021). (with Luke Emeka Okafor and Katarzyna Burzynska). (link)

Abstract.

This study investigates the effect of regional trade agreements (RTAs)—including preferential and free trade agreements, customs unions, and common markets—on bilateral tourism flows. We explore these effects using a panel gravity data set of 163 destination countries, 171 source countries, and 13,589 country-pairs from 1995 to 2015. This is the first large cross-country study to undertake such an integrated analysis using the gravity framework. Results show that all types of RTAs have a positive and significant effect on bilateral tourism flows. The overall indicator of RTAs that captures the combined effect of all types of RTAs on bilateral tourism flows is also positive and significant, on average, as well as when different regions are separately evaluated. These findings underscore the importance of strong economic integration in fostering international tourism flows. Policies aimed at improving a country’s economic integration with other countries can help promote international tourism flows.
Exploring Diverse Sources of Linguistic Influence on International Tourism Flows. Journal of Travel Research (2021). (with Luke Emeka Okafor and Olajide Idris Sanusi). (link)

Abstract.

This study uses a gravity framework to explore the impact of diverse sources of linguistic influence on international tourism flows. The diverse sources of linguistic influence are captured using a common language index derived from a common native language, a common official language, and linguistic proximity. Our results reveal that linguistic factors as captured by common language index promote international tourism flows. The positive impact of linguistic ties on tourism flows is not only observed in the country-pairs that share an official language, it is also found in pairs that share unofficial native languages, that contain minority groups united by a common language, or that use closely related languages—all features captured by the language index. The analysis demonstrates that an index of common language is methodologically superior to other measures of linguistic similarity, including the dummy variable for a common official language that currently dominates the international tourism literature.
Does the Size of the Tourism Sector Influence the Economic Policy Response to the COVID-19 Pandemic? Current Issues in Tourism (2021). (with Luke Emeka Okafor and Katarzyna Burzynska). (link)

Abstract.

The COVID-19 pandemic has resulted in an unprecedented slowdown of economic activity worldwide, with an especially negative impact on the tourism sector. The adoption of international travel restrictions to contain the spread of the COVID-19 outbreak has brought much of the global tourism industry to a virtual standstill. Governments have introduced a range of economic stimulus packages designed to mitigate the negative effects of the pandemic, including its impact on travel and tourism. This article investigates whether the size of the tourism sector influences the economic policy response to COVID-19 pandemic using data from 136 countries. The findings show that the larger the tourism sector, the larger the economic stimulus package introduced by governments globally. Furthermore, we find that the size of the tourism sector is positively associated with both fiscal and monetary policy responses to the pandemic. The findings suggest that countries with larger tourism sectors adopted more aggressive economic stimulus packages to mitigate the impact of COVID-19 pandemic and reinvigorate floundering economies.
Do Stock Markets Play a Role in Determining the COVID-19 Economic Stimulus? A Cross-Country Analysis. World Economy (2021). (with Muhammad Shafiullah and Sajid M. Chaudhry). (link)

Abstract.

This paper makes an innovative contribution to the extant literature by analysing the determinants of economic stimulus packages implemented by governments in response to the COVID-19 pandemic. In particular, we explore whether stock market declines observed in many countries can predict the size of COVID-19 stimulus packages. Moreover, we explore whether a country’s level of income can augment the underlying relationship between stock market declines and stimulus packages. The findings reveal that a larger stock market decline results in a larger stimulus package; however, this effect is only observed in countries that have an income level greater than the mean and/or median per capita gross domestic product (GDP). Moreover, our results show that monetary policy is more responsive to a stock market decline than fiscal policy. Thus, our results underscore the importance of international donor agencies such as the World Bank and International Monetary Fund (IMF) in supporting less affluent countries in coping with the adverse impacts of the COVID-19 pandemic on their economies.
The Effect of Regional Trade Agreements on International Tourist Flows in the Middle East and Africa. Book chapter published in: Ngoasong M.Z., Adeola O., Kimbu A.N., Hinson R.E. (eds) New Frontiers in Hospitality and Tourism Management in Africa. (with Luke Emeka Okafor and Ogechi Adeola). (link)

Abstract.

This chapter draws on findings from analysing the effect of Regional Trade Agreements (RTAs) on international tourist flows in Sub-Saharan Africa (SSA) and the Middle East and North Africa (MENA) to discuss the role of policy harmonisation in tourism development. The empirical analysis is carried out using a gravity dataset consisting of an unbalanced panel of 171 origin countries, 55 destination countries, and 4454 country-pairs over the period from 1995 to 2015. The results show that regional trade agreements have a significant positive effect on international tourist flows over the sample period: country-pairs that are members of regional trade agreements experienced greater tourist flows than non-members in both SSA and MENA. The results underscore the role of policy harmonisation in boosting international tourism. RTAs encourage policy harmonisation amongst member states to promote regional integration and thereby enabling inter-regional tourism. Integrating tourism development into regional trade agreements could amplify their positive effect on tourist flows, such as through harmonising tourism-related policies, which in turn, would generate positive spill-overs across tourist destinations in the RTAs.
Does meat consumption exacerbate greenhouse gas emissions? Evidence from US data. Environmental Science and Pollution Research. (with Muhammad Shafiullah and Muhammad Shahbaz). (link)

Abstract.

This study empirically investigates the effect of meat consumption on greenhouse gas emissions (carbon dioxide, methane, and nitrous oxide) in the USA. The impact of meat consumption on greenhouse gas emissions is examined by controlling for economic growth and energy consumption. The empirical analysis finds that all these variables are cointegrated for the long run. Moreover, meat consumption aggravates greenhouse gas emissions. Specifically, meat consumption (except for beef) has a U-shaped relationship with carbon emissions and an inverted U-shaped relationship with methane and nitrous oxide emissions. The causality analysis indicates a unidirectional causality running from meat consumption to greenhouse gas emissions. These empirical findings indicate that the US livestock sector has the potential to become more environmentally friendly with careful policy formulation and implementation.
Financial Development and Governance: A Panel Data Analysis Incorporating Cross-sectional Dependence. Economic Systems (2021). (with Muhammad Shafiullah). (Full text can be viewed here)

Abstract.

This study investigates bidirectional causality between governance and financial development using panel data of 101 countries from 1984 to 2013. The financial development–governance nexus is explored using econometric methods robust to cross-sectional dependence, and the relationship between different levels of development and openness is analyzed. Long-run equation estimates show clear evidence that financial development positively affects governance, and this positive impact is found to be robust to three different measures of governance. Further analysis shows that improving governance quality has positive effects on financial development, while Granger causality tests demonstrate bidirectional causality between financial development and the governance measures. Last, the impact of financial development on governance is dependent on a country’s level of development and openness. These findings underscore the crucial role of financial development in bringing about good governance reforms and economic growth that, in turn, can further develop the financial sector. As such, a symbiotic and synergistic relationship can persist between good governance, growth, and financial development. The findings provide significant motivation for policymakers to encourage openness and financial sector development to lift the standard of living, especially in emerging economies.
A Nonparametric Analysis of Energy Environmental Kuznets Curve in Chinese Provinces. Energy Economics. 2020. (with Muhammad Shafiullah, Muhammad Shahbaz and Malin Song). (link) (Full text can be viewed here or here)

Abstract.

Energy resources are an important material foundation for the survival and development of human society, and the relationship between energy and economy is interactive and complementary. This paper analyzes the energy consumption–economic growth nexus in Chinese provinces using novel and recent nonparametric time-series as well as panel data empirical approaches. The dataset covers 30 provinces over the period of 1980–2018. The empirical analysis indicates the presence of a nonlinear functional form and smooth structural changes in most of the provinces. The nonparametric empirical analysis validates the presence of a nonlinear unit root problem in energy consumption and economic growth, and nonlinear cointegration between the variables. Additionally, the nonparametric panel cointegration test reports evidence of convergence in energy consumption and economic growth patterns across the provinces. The nonparametric regression analysis finds economic growth to have a positive effect, on average, on energy consumption in all provinces, except for Beijing. Further, the energy environmental Kuznets curve exists between economic growth and energy consumption in 20 out of 30 Chinese provinces. The Granger causality analysis reveals the presence of a mixed causal relationship between economic growth and energy consumption. The empirical findings have important implications for Chinese authorities in planning for improving energy efficiency, decoupling between economic growth and energy consumption, and reducing the environmental footprint of provinces.
Regaining International Tourism Attractiveness After an Armed Conflict: The Role of Security Spending. Current Issues in Tourism (2021). (with Luke Emeka Okafor). (link) (Full text can be viewed here)

Abstract.

This paper investigates how long it takes a country to regain international tourism attractiveness after an armed conflict using gravity panel data. This includes examining the influence of security spending as proxied by military spending in the underlying negative relationship between international tourism and armed conflict. The results show that security spending cannot reverse the negative impact of armed conflict on international tourist flows in a destination country in a short period of time. Security spending, however, can reverse the negative impact of conflict after about eight years following the onset of the conflict as international tourist flows increase. Armed conflict is very costly and should be avoided by all means possible. In the event of an unavoidable conflict, effective utilization of security spending can help to restore peace after some time, which in turn would lead to an increase in international tourist flows.
Military Spending and Economic Growth in Turkey: A Wavelet Approach. Defence and Peace Economics (Online First). (with Olivier Habimana) (link)

Abstract.

This paper employs a wavelet approach to investigate the relationship between economic growth and military spending in a time-frequency domain for the case of Turkey. Turkey presents an interesting case for analysis of military spending and economic growth, as its geopolitical position and history of insurgencies and separatist violence oblige the country to devote an unusually large share of the central government budget to national defence. Timescale regression analysis reveals that military expenditures have significant negative effects on growth in per capita GDP at business cycles of 16 years and longer. Timescale Granger causality analysis indicates that per capita GDP growth responds to movements in military expenditures at business cycles of eight years and above and that this result is very significant. Wavelet coherency analysis corroborates these findings, indicating a significant negative long-run co-movement at business cycles of 16 years and longer. Thus, the neoclassical prediction that military spending may promote growth does not hold in the case of Turkey, at least in the long run. Furthermore, the analysis reveals that, in the long run, military spending has been leading rather than lagging economic growth.
The Effects of Economic and Financial Crises on International Tourist Flows: A Cross-Country Analysis. 2020. Journal of Travel Research, 59 (2), 315-334. (with Muhammad Shafiullah and Luke Emeka Okafor). (link) (Full text can be viewed here)

Abstract.

This article investigates the effect of different economic and financial crises, such as inflation crisis, stock market crash, debt crisis, and banking crisis on international tourism flows using a panel gravity data set of 200 countries over the period 1995 to 2010. The results show that the inflation crisis has a dampening effect on international tourism flows in both the host and origin countries. The results also show that domestic debt crisis encourages international tourism arrivals in the host countries, whereas its impact on international tourism services in originating countries is negative. Further, the impact of these crises on tourism is region dependent. In particular, banking crisis depresses international tourism flows in host countries situated in regions such as America and Latin America and Caribbean, whereas its impact on originating countries located in regions such as Asia and the Middle East is insignificant.
Armed Conflict, Military Expenditure and International Tourism. 2019. Tourism Economics, 30 (2), 238-251. (with Luke Emeka Okafor and Nusrate Aziz). (link) (Full text can be viewed here)

Abstract.

This article uses a gravity model to explore whether military spending has any moderating effect on the link between armed conflict and international tourist flows. The data set consists of a panel of 188 countries over the period 1995 to 2015. We show that the moderating effect of military spending depends on the levels of relative military spending as well as geographical location. Specifically, in the presence of armed conflict, ‘moderate’ level of relative military spending helps to promote the international tourism attractiveness of destination countries, whereas ‘high’ level of relative military spending cannot reverse the negative impact of armed conflict, it rather fuels the problem. In general, countries in regions such as Southeast Asia that allocate ‘moderate’ amount of resources for security attract more international tourists relative to countries in regions, such as the Middle East and North Africa, that spend a larger share of GDP on security.
Armed Conflict, Military Expenses and FDI Inflow to Developing Countries. 2019. Defence and Peace Economics, 30(2), 238-251. (with Nusrate Aziz) (link)

Abstract.

This paper investigates the relationship between military expenditure and FDI inflow conditioning on the exposure of a country to armed conflict in the long run. We apply the band spectrum regression estimator, and the maximal overlap discrete wavelet transform, to a panel of 60 developing countries, for the years 1990 to 2013. The estimated results indicate that military expenditure, in the absence of armed conflict, reduces FDI inflow. However, the negative effect is mitigated by increased military expenditure, in the presence of armed conflict. We also show that the effect of military expenditure on FDI is time sensitive, in that it takes time for military expenditure to affect FDI inflow. FDI inflow in response to higher military expenditure is higher for the country that faces higher armed conflict than the country that faces lower armed conflict. The findings are robust in the case of overall as well as internal conflict. These results are also robust to the alternative specification, subsample analysis with different armed conflict thresholds, and the estimation using the time variant long-run models.
Determinants of International Tourism Demand: Evidence from Australian States and Territories. 2019. Tourism Economics, 25 (2), 274-296. (with Muhammad Shafiullah and Luke Emeka Okafor) (link) (Full text can be viewed here)

Abstract.

This article explores whether the determinants of international tourism demand differ by states and territories in Australia. This is the first attempt at econometric modelling of international tourism demand in the states and territories of Australia. A demand model is specified where international visits to states and territories is a function of world income, state-level transportation costs, stock of foreign-born residents, the Australian real exchange rate and the price levels of international and domestic substitutes. Panel and time series econometric techniques are employed to test the model variables for stationarity, cointegration and direction of causality. Panel and time series cointegration tests show that the model is cointegrated. The causality analysis indicates that all explanatory variables Granger cause international visits to the Australian states and territories. Further, we show that the impacts of the determinants of international tourism vary by states and territories. The results underscore the importance of targeted policymaking that takes into account the economic and social structure of each state and territory instead of designing tourism policies on the basis of one-size-fits-all approach.
Are Capitalists Green? Firm-ownership and Provincial CO₂ Emissions in China. 2018. Energy Policy, 123, 349-359. (with Fredrik N.G. Andersson and Sonja Opper) (link)

Abstract.

In China, a large private sector has evolved alongside a still sizeable state-owned sector that is subject to government control. Several studies have found that in this mixed economy, the private sector is economically more efficient than the state-owned sector. In this paper, we investigate whether private firms are also more carbon efficient than state-owned firms. Using a macroeconomic panel data model with provincial data from 1992 to 2010, we confirm that private firms emit less carbon dioxide than state-owned firms. Our results imply that future reforms, such as ongoing privatization, introduced to increase the economic efficiency of state-owned companies will also mitigate emissions growth. The policy lesson, not only for China but for developing countries maintaining a large state-owned sector, is that economic efficiency and energy efficiency are conjoined mutual benefits.
Common Unofficial Language, Development and International Tourism. 2018. Tourism Management, 67, 127-138. (with Luke Emeka Okafor and Terence Then) (link)

Abstract.

We employ a gravity framework to examine whether the use of common unofficial language promotes international tourist flows while considering the influence of the levels of development and regions in the underlying relationship. The empirical analysis is based on a panel data set of bilateral tourism flows among 200 countries over the period 1995 to 2015. Results show that common unofficial language is a significant determinant of international tourist flows after controlling for common official language and other classical determinants of tourist flows. This finding holds irrespective of the levels of development of different countries. Further, we show that a common unofficial language is a more significant determinant of international tourist flows than a common official language in Europe. Policies that create an enabling environment for multilingual societies to emerge in a country would help to boost international tourism.
The Effect of Trade and Political Institutions on Economic Institutions. 2017. The Journal of International Trade & Economic Development, 26(1), 89-110. (link)

Abstract.

This study examines the relationship between trade and the quality of economic institutions under different political institutions. It uses panel data of 138 countries from 1984 to 2010 and employs instrumental variables and identification through heteroscedasticity to mitigate the problem of endogeneity. The findings suggest that the effect of trade on economic institutions reduces significantly in the presence of extractive political institutions. The findings indicate that â€˜tradeâ€™ is not a sufficient tool for improving economic institutions; rather, trade policies need to be embedded in distinct political institutions to trigger the substantive improvement of economic institutions.

Research Projects and Grants

Tourist behaviour to shocks and building tourism resilience in UAE. 2020-2022.
Funded By: United Arab Emirates University under the Startup grant. AED 240,000.
PI: Usman Khalid
The purpose of this study is to investigate the impact of internal and external shocks on tourist behaviour in the UAE. This includes identifying effective policy interventions that can help to lessen the negative effects of shocks on international tourist flows.
Risk preference and choice of career: the role of subjective wellbeing, religiosity and social values. 2019-2020.
Funded By: Fundamental Research Grant Scheme (FRGS), Ministry of Higher Education, Malaysia. RM 80,000.
PI: Usman Khalid
This research project aims to analyze the relationship between subjective well-being/life satisfaction, entrepreneurial attitudes and risk averseness in Malaysia in the light of ethnolinguistic fractionalization in the country.

Working Papers

Understanding the Impact of Ethnic Fractionalization on the Level and Growth Rate of Labor Productivity: Does Firm-size Matter? 2020. (with Mohammad Amin). (link)

Abstract.

The literature has identified both the positive and negative effects of greater ethnic fractionalization on economic outcomes. We argue that the positive effects that are associated with skills complementarity in the production process apply to firms that have a complex and diversified production structure, as in large firms. The negative effects such as poorer quality of public goods and higher transactions costs impact small firms more than large firms as the former relies more on public provision of goods and have poorer access to institutions. Thus, we predict that greater ethnic fractionalization hurts small firms more or benefits them less than large firms. We test this idea for the level and growth rate of labor productivity of manufacturing firms in a large cross-section of developing countries. Our results not only confirm the stated prediction but also show a contrasting effect of higher ethnic fractionalization; that is, a negative effect on the level and growth rate of labor productivity of the relatively small firms and a positive or no effect for the relatively large firms. We discuss how empirical analysis based on firm-level surveys that fail to capture the firm-size heterogeneity while exploring the effects of ethnic fractionalization can provide an inaccurate picture of the overall effects of ethnic fractionalization and its distribution between small and large firms.
Decomposing the Labor Productivity Gap between Upper-Middle-Income and High-Income Countries. 2019. World Bank Policy Research Working Papers. (with Mohammad Amin and Asif Islam). (link)

Abstract.

Using firm-level survey data on registered private firms collected by the World Bank’s Enterprise Surveys, this paper compares the level of labor productivity in 22 upper-middle-income countries and 11 high-income countries for which comparable data are available. The results show that labor productivity in the upper-middle-income countries is about 57.5 percent lower than in the high-income countries. The productivity difference is robust and holds for firms of different sizes and industries. The analysis uses the Oaxaca-Blinder decomposition to identify the sources of the productivity gap. It finds that the endowment effect and the structural effect contribute roughly equally to the productivity gap. Several firm- and country-level variables determine the productivity gap. The biggest contributors via the endowment effect include tertiary education attainment, law and order, and quality management proxied by international quality certification. Factors that contribute most via the structural effect include market size, secondary education attainment, and law and order. Thus, the results underline the importance of human capital, institutions, and market size for closing the productivity gap between the upper-middle-income and high-income countries.
Catch-up in Institutional Quality: An Empirical Assessment. 2016. CREDIT Research Paper No. 16/04. (link)

Abstract.

There is a growing consensus among economists and policy makers that institutions matter for economic development and that institutional reforms should be a priority for developing economies. Considering the emphasis on institutional reforms, this study asks whether a catch-up in institutional quality has occurred across countries. The study uses data on 81 countries from 1985 to 2010 and tests the catch-up hypothesis using three different measures of institutional quality that capture both political and economic dimensions of institutions. The results indicate that a catch-up in economic institutional quality has occurred and that most countries with weak economic institutions have a higher rate of change than that of countries with strong economic institutions. In contrast, for political institutions, the catch-up process lasts only a few years.

Conference Papers

Are capitalists green? Firm ownership and provincial CO₂ emissions in China. 2015. Asian Economic Panel, Lund, Sweden. (with Fredrik NG Andersson and Sonja Opper).

Dissertation

Essays on Institutions and Institutional Change. 2016. Lund Economic Studies, 191. (link) (Full text can be viewed here)

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