Open Access Original Research Article

The Link between Remittances and Economic Growth in Pakistan: A Boon to Economic Stability

Khalid Al Khathlan

Journal of Economics, Management and Trade, Page 167-185
DOI: 10.9734/BJEMT/2012/1426

This paper adopted the autoregressive distributed lag (ARDL) test and the error correction model (ECM) techniques to establish the long-run and short -run relationship between worker remittances and economic growth in Pakistan during the period 1976-2010. The results demonstrate the existence of a positive and significant relationship between worker remittances and economic growth in the long-run and short-run in that country. Worker remittances act as an important source of foreign capital, while a significant component of BOP serves as a boon to the economy. The gross fixed capital formation has a positive and significant impact on economic growth in the short run. The negative role in the long run in the presence of such financial flows shows the inappropriateness of policy measures aimed at boosting real sectors of the economy. FDI has a positive and significant impact on economic growth in the short run and long run.

Open Access Original Research Article

A Dynamics Intergenerational Indicator of Poverty in Senegal

Latif Dramani

Journal of Economics, Management and Trade, Page 186-211
DOI: 10.9734/BJEMT/2012/1239

Aim: This study focuses on the construction of a multi-dimensional dynamic indicator of the persistence of poverty over time between different generations from the quantitative and qualitative survey Vulnerabilities and Chronic Poverty in Senegal carried out in 2008/2009.
Place and Duration of the Study: Laboratoire de Recherche sur les Transformations Economiques et Sociales (LARTES), University Cheikh Anta Diop of Dakar (UCAD), Senegal, between 2008 and 2009.
Methodology: Based on a national sample consists of 2,048 biographies the study was based on non-monetary family indicators of poverty to understand the complex reality of poverty dynamics by generation.
Results: The results highlight a complex mechanism of poverty transmission and provide information on trends (chronic poverty, transient poverty, not poverty) of trajectories over the generations. These results suggest the establishment of policies targeted to specific age group of individuals to allow local management of the problem of poverty, which previously was not necessarily the case. Thus, progress must be made to deepen our understanding of the causes of poverty, and improve the effectiveness of policies to reduce it.

Open Access Original Research Article

The Effects of Risk Assessment (Hirarc) on Organisational Performance in Selected Construction Companies in Nigeria

M. O. Agwu

Journal of Economics, Management and Trade, Page 212-224
DOI: 10.9734/BJEMT/2012/1317

The paper focuses on the effects of risk assessment (Hirarc) on organisational performance in selected construction companies in Nigeria. Risk assessment (Hirarc) is a structured approach for identifying, evaluating and controlling hazards in the workplace with a view to achieving better organisational performance of no harm/damage to people, assets, environment and reputation. The objective of this research is to ascertain the extent of compliance and influence on organisational performance (reduced accident/ incident rate, improved safety practices, enhanced productivity and increased profitability) of risk assessment (Hirarc) in the six selected construction companies in Nigeria. Thus, the research question addressed the extent of compliance and influence of risk assessment (Hirarc) on organisational performance in the six selected construction companies. This research is based on the “Domino Theory” of accident prevention as propounded by Heinrich, Petersen and Nester (1980). It assumes that compliance with risk assessment (Hirarc) will eliminate the third piece of domino (unsafe acts or physical hazard factor) from the series and prevent accidents/ incidents from happening thus resulting in better organisational performance (reduced accident/ incident rate, improved safety practices, enhanced productivity and increased profitability). The research concludes that compliance with risk assessment (Hirarc) at the organisational level in construction companies in Nigeria will improve organisational performance(reduced accident/ incident rate, improved safety practices, enhanced productivity and increased profitability). It therefore, recommends among others: visible top management/employees commitment to risk assessment (Hirarc), competitive safety intelligence, high-level safety knowledge flow management and co-operative safety resourcing as a means of sustaining safety best practices in the Nigerian construction industry.

Open Access Original Research Article

Lottery Sales and Per-capita GDP: An Inverted U Relationship

Maria João Kaizeler, Horácio Crespo Faustino

Journal of Economics, Management and Trade, Page 225-238
DOI: 10.9734/BJEMT/2012/1411

The main purpose of this study is to test the hypothesis that the relationship between per-capita sales and per-capita GDP is given by an inverted U. The paper considers that lottery sales increase together with increases in GDP up to a point where a country has reached a level at which the GDP is high enough and lottery sales become an inferior good and as a result, start to decrease. The results confirm the hypothesis, in addition to yielding other interesting findings: countries with higher levels of education sell fewer lottery products; lottery sales increase together with increases in the male to female ratio.

Open Access Original Research Article

The Causal Relationship between Private and Public Investment in Zimbabwe

Brian Muyambiri, Oscar Chiwira, Ngonidzashe Chiranga, Enowbi Batuo Michael

Journal of Economics, Management and Trade, Page 239-264
DOI: 10.9734/BJEMT/2012/1213

Aims: The study examines the relationship between private and public investment in Zimbabwe utilizing yearly time series data for the period 1967 to 2004.
Study Design: Time Series Study.
Place and Duration of Study: Zimbabwe, May 2011 to July 2011.
Methodology: Emphasis is placed on the direction of causality and the long run and short run effect of the two types of investment on each other. The paper constructs empirical models for both private and public investment, based on the flexible accelerator theory. Private investment is found to be cointegrated with public investment. A cointergration and VEC models are employed to assess the long and short run relationship existing between public and private investment.
Conclusion: The relationship between private and public investment is found to be insignificant and the direction of causality found to be unidirectional. The results support the notion that private investment precedes public investment.

Open Access Case study

Financial Development and Economic Growth: Is Schumpeter Right?

Michael Adusei

Journal of Economics, Management and Trade, Page 265-278
DOI: 10.9734/BJEMT/2012/1865

Aim: The aim of the study is to test the validity of Schumpeter’s prediction that finance promotes growth using annual time series data from South Africa.
Study Design: Case Study
Place and Duration of Study: South Africa. Time series data ranging from 1965 to 2010.
Methodology: The study employs unit root testing, co-integration analysis, Fully Modified Ordinary Least Squares (FMOLS) regression, Two-Stage Least Squares (2SLS) regression, Error Correction Model and Pairwise Granger Causality test technique to analyze annual time series data from South Africa. Two measures of financial development are used: domestic credit as a share of GDP measuring the degree of financial intermediary services; and broad money supply as a share of GDP measuring the overall size of the financial intermediary sector. Control variables included in the model are inflation, size of government, openness of the South African economy, and a dummy variable accounting for financial reforms that began in South Africa in the 1980s.
Results: Contrary to the prediction of Schumpeter that finance promotes growth, the empirical results suggest that financial development does not promote economic growth both in the short run and in the long run. The Pairwise Granger Causality test result supports the assertion that there is a unidirectional causality from financial development to economic growth in South Africa.
Conclusion: The paper concludes that Schumpeter may not be right in theorizing that finance promotes economic growth.