SUMMARYThis paper uses both single‐equation and multi‐equation systems to examine whether fiscal policy 'crowds out' private investment. It is found that, for both the United States and Canada, this is in fact the case. In addition, it is shown that this crowding out leads to long term inflation.
AbstractDespite using a common database for a sample of 46 developing countries to evaluate the impact of foreign direct investment (FDI) inflows on domestic investment (DI), two recent articles on the subject (Morrissey and Udomkerdmongkol in World Dev 40(3):437–445. 10.1016/j.worlddev.2011.07.004, 2012 and Farla et al. in World Dev 88:1–9, 2016. 10.1016/j.worlddev.2014.04.008), produced conflicting results. The current paper contributes to the debate by using a larger panel database of 105 developing countries from 2002 to 2018 while controlling for financial development. We make use of the system generalized method of moments (S-GMM). Our findings do not support a crowding-in effect of FDI; instead, we found that FDI crowded out domestic investment. The findings underscore that institutions played no role in the FDI–DI nexus. Furthermore, there is no strong evidence that good institutions promoted investment in developing countries from 2002 to 2018.
Export-led growth strategies have become the main paradigm for developing countries seeking to achieve higher economic growth. While exports are key to generating income, there are concerns regarding limitations in external demand. Specifically, China's remarkable export performance has been at the center of debates that revolve around possible export displacement effects on other countries. This study reviews this literature on export-led growth and crowding-out effects induced by China's growing exports on various countries and regions. Moreover, reflecting dynamic changes in export structure, lists of key products for Chinese exports are provided. While using the 4-digit level Harmonized System (HS) classification, the selection of the products is based on improvements in revealed comparative advantage (RCA) over the period from 2009 to 2018 and is specific to China's top three sectors with the largest global market shares: textile, electronics and machinery. Additionally, lists of competitor, potential competitor and potential loser countries are identified in the markets for these specified key products. The findings demonstrate increased competitive pressures on more advanced countries in connection with the increased sophistication of Chinese exports.
AbstractHealthcare financing is crucial for sustainable development and has been gaining attention, particularly since the COVID-19 pandemic. Although ample studies have explored the determinants of healthcare spending, the current study examines the determinants of health financing transition in 124 low- and middle-income countries (LMICs) for 19 years, from 2000 to 2018. The study first estimates the elasticity of health expenditure (i.e., government, private, and external) to per capita income, fiscal spending, age dependency, control of corruption, and time; second, it investigates crowding-out/in effects between domestic and external health financing. As the sample countries are heterogeneous in terms of development and universal health coverage (UHC) reform, our study employs a panel regression model with cluster-robust fixed effects and a bootstrapping quantile regression with fixed effects model to capture unobserved heterogeneity and produce robust estimates across quantile distributions. The results show that an increase in per capita government health expenditure (GHE) and per capita external health expenditure from foreign donors can reduce the share of out-of-pocket health expenditure to total health expenditure (OOPHE), thereby improving the health status and well-being of the people. The study also finds crowding-out effects of per capita external health financing on GHE in LIMCs. Interestingly, the results show that the control of corruption increases the per capita GHE in low-income countries. Thus, in low-income countries, improving governance would improve efficiency in fund utilization and strengthen the health system. Further, our study concludes that those countries that have passed UHC legislation are moving faster toward health financing transition by increasing public spending on health care. Healthcare policy in developing countries should prioritize (i) the adoption and implementation of UHC reform, (ii) alternative revenue mobilization strategy for financing public health care.
Introduction In 2015, Sweden initiated the implementation of standardised cancer care pathways (CCPs). With short, nationally imposed target times from diagnosis to first treatment, the issue of crowding out effects has been debated. This study investigate whether the implementation of CCPs is associated with longer waiting times for surgery, radiology scans and pathology analyses for other patient groups. Methods Data from the internal computer systems used in radiology, pathology and surgery to plan and follow the production at a county hospital in Sweden during 2014-2017 were analysed. By utilising the different priority categories used in these specialties, changes in waiting times before and after the implementation of CCPs could be analysed. Results The results are consistent with an association between the implementation of CCPs and longer waiting times for the priority category prioritised immediately after the CCP category in all specialties. In addition, none of the lowest priority categories within each subspecialty have experienced increased waiting times after CCP implementation. Discussion These results are consistent with a change in prioritisation where CCP patients are receiving shorter waiting times after CCP implementation at the expense of other patient groups. Crowding out effects related to CCP implementation have not been previously researched. This study therefore fills a gap in present literature. With an increased awareness of these challenges, and a more holistic perspective in the implementation process, actions can be put in place to identify and counteract crowding out effects.
The main purpose of this paper is to explore the role of risk management, speculative industry competition effect and hot issue markets. We used a sample of 260 initial public offerings (IPOs) in the Australian resource sector for the 1994–2004 period to test the underpricing effect. We do not find any evidence that risk management can reduce the uncertainty relating to the new issue and hence alleviate the extent of underpricing. A plausible explanation for this lack of evidence is the poor information content of publicly available disclosures regarding risk management activities of IPO firms. We further provide evidence that the underpricing returns for resources IPOs are not impacted upon by the strength of alternative speculative IPO markets. We also show that the degree of underpricing adjusts to both market return in the preceding three months and the average underpricing of resources IPOs in the 12 month period leading to the float which offers an explanation to the hot issue effect observed in the IPO market.
Trabajo presentado a Iberometrics VIII: Eight Iberian Cliometrics Workshop. Organizado por el Institute of Advanced Research in Business and Economics (INARBE) de la Universidad Pública de Navarra, en colaboración con Glocred y expertos de instituciones de España y Portugal. Celebrado en la Upna el 20-21 de abril de 2017. ; This paper aims at providing quantitative and qualitative evidence of a crowding out effect due to war borrowing at the end of eighteenth-century Spain. In the second section, I examine the two key links in the crowding out argument. First, did the Spanish government's issuance of debt to finance warfare result in higher real interest rates? Second, did it cause a reduction of private investment? Annual data for long-term interest rates and for government borrowing allow examination of the first link in the crowding out argument. Then, using original annual data on the volume of long-term private credit that we collected from the mortgage registry of Madrid (Contaduría de Hipotecas de Madrid), we examine the second link of the argument. In the third section, this paper analyses structural changes in the long-term private capital market. We argue that the dramatic increase in public borrowing at the end of the eighteenth century to finance warfare crowded out ecclesiastical institutions and shut down large part of the private credit market for long-term annuities for the decades to come. We also show that the withdrawal of ecclesiastical institutions in the 1790s came along with the rise of private obligations.
