Asian Economic and Financial Review

Empirical validation of marginalisation thesis on the participation in the informal economy in Goa

2024-04-08T00:59:22-05:00

This paper investigates the global increase in informal labor, focusing on two primary theoretical perspectives: the marginalization thesis and the reinforcement thesis. Previous empirical studies across various contexts have not definitively settled this debate. The current study, conducted in Goa, India, offers distinctive insights. Data from 200 informally employed individuals in both the formal and informal sectors was collected using snowball sampling. The findings of the binary logistic regression model reveal that the marginalisation thesis holds true, as individuals who are marginalised in terms of gender, age, education, and household employment in the informal sector are more likely to engage in informal employment. Conversely, the reinforcement thesis is supported when workplace characteristics such as flexible work timing and employment in construction services are considered. Therefore, the study concludes that a combination of marginalisation and reinforcement factors explains the reasons behind participation in the informal economy. Therefore, analysing labour market dynamics can offer valuable insights into informal employment.

Determinants of a bank's profitability with the mediating role of interest rate spread: A case of Vietnam

2024-04-08T01:27:34-05:00

Considering the fundamental function of commercial banks in the economy, which involves the facilitation of fund transfers from lenders to borrowers, it is imperative for these institutions to carry out this task in a manner that is both efficient and effective. This is crucial to fostering economic growth and enhancing social welfare. A bank's profitability has been a subject of scrutiny by researchers in many countries for decades. This study aims to analyze the impact of interest rate spread (IRS) and its mediating role in the relationship between bank-specific factors and the bank's profitability at the Commercial Bank of Vietnam. The data was collected from 2008 to 2020 for the 25 Commercial Banks using panel regression. The study found the positive effect of cost efficiency (CE), income diversity (ID), and liquidity risk (LIQ) on the IRS; however, bank size (BS), non-performing loan (NPL), provision of bad and doubtful debts (PL), asset structure (AS), non-interest expense (NIE), and economic conditions (ECD) do not impact the IRS statistically significantly. The study also confirms the IRS's mediating role. The study findings provide empirical evidence of the explaining and mediating role of the IRS on bank profitability. This study recommends that policymakers encourage Commercial Banks to diversify their income in order to avoid focusing on traditional activities, which can lead to credit overheating.

Does corruption boost economic growth in developing countries?

2024-04-25T01:29:55-05:00

Many countries with emerging economies suffer from a high level of corruption that hampers their overall development. Despite the abundance of literature scrutinizing the intricate relationship between corruption and economic growth, the precise nature of this connection remains elusive. To address this, this study rigorously examines the link between corruption and economic growth across 129 developing countries, spanning the years 2003 to 2021. The methodology relies on Transparency International's Corruption Perceptions Index (CPI) to gauge the extent of corruption within these nations. Employing the Plate-Corrected Standard Error (PCSE) estimator, we seek to derive a more robust and reliable measure of the correlation between corruption and growth. The noteworthy revelation of this investigation is that higher levels of corruption surprisingly correlate with increased economic growth in developing countries, thereby supporting the intriguing "grease the wheels" hypothesis. These findings challenge conventional assumptions and prompt a re-evaluation of the perceived negative impact of corruption on economic development. Furthermore, our analysis uncovers additional factors influencing economic growth in developing nations. Notably, Foreign Direct Investment (FDI) and revenues from oil contribute positively to economic growth, while augmented military expenditures emerge as a suppressant. These nuanced insights shed light on the multifaceted dynamics shaping economic trajectories in developing countries and underscore the complexity of the interplay between corruption and key economic indicators.