The literature has not settled down on safe haven property of gold in the emerging and developing countries. Therefore, we revisit the international evidence on hedging and safe haven role of gold for 34 emerging and developing countries with a span of daily data covering January 2000–November 2018. We employ the GARCH-copula approach to estimate the lower-tail extreme dependencies of the joint distribution of gold and equity returns. We also introduce a new definition for the strong safe haven property of an asset. Our findings indicate that while gold serves as a hedging instrument for all countries in our sample, we got evidence of weak safe haven property for gold, for domestic investors, only in 20 countries, and a strong safe haven asset (SHA) only in 9 countries.
One of the many consequences of financialization in the past decades has been the significant appreciation of the importance of financial markets' liquidity. In order to maintain financial stability, one must have a clear understanding of the sources of market liquidity (ML). A finer comprehension of liquidity and its direction would help policy makers in fine-tuning the current regulations while also identifying each of the elements that compose it. In this paper, a recursive vector autoregressive model is utilized to empirically analyze how to detect the causality relations between funding and ML in four post-communist countries (Czech Republic, Hungary, Slovakia and Poland). For the analyses freely accessible data on the balance sheets of aggregated banking sectors was utilized with the overall aim of finding a proxy for funding liquidity (FL) in every examined country. As a proxy for ML, government bonds' bid-ask spreads were utilized in the model. The paper provides an empirical evidence that FL drives ML in each economy. The results are clear, statistically significant and robust. They can be understood as evidence for the importance of the role of the trader's FL for the liquidity of financial assets' markets. The results of the paper have important implications for monetary policy, as well as micro- and macro-prudential regulation.
Entrepreneurial innovation is a complex phenomenon. Experimenting with research designs that could claim some degree of generalizable linking between the individual and external influencing factors is challenging. However, progress even in research niches can contribute to a more structured understanding of the process. This article focuses on the first stages of entrepreneurial innovation, using a novel questionnaire design. Responses were collected from two Hungarian universities (147 and 127 responses, respectively) and analysed using Structural Equation Modelling. The results confirm that entrepreneurial innovation success in the early stage is shaped by macro-level factors, which have an influence on risk perception through locus of control. The paper makes two contributions, demonstrating (1) the possibility of using questionnaire survey for analysing multiple levels if the narrative is under control, and (2) how individual entrepreneurs approach the start of their innovation-based business, upon which personality and environmental factors both have significant impact.
This paper investigates the role of extra-regional capabilities in regional economic development in a Central and Eastern European context. This is done by analysing the association between the related variety of manufacturing import and export of domestic- and foreign-owned firms on the one hand, and regional employment in manufacturing export on the other. By means of a panel regression framework applied to the Hungarian microregions between 2000 and 2011, we find that domestic firms, in particular, benefit from the related variety of export activities in the regions, while import related to existing export activities is beneficial amongst both foreign and domestic firms. Furthermore, bridging the technological gap between foreign companies and the host economy requires stronger technological relatedness, unless domestic firms have experience in importing.
Kornai's earlier works embodied the idea that state institutions formed a system with a strong tendency to reproduce itself, and hence to resist minor reforms. Thus, at the end of socialism, huge changes were needed in politics, economics, and the law to build a new system oriented towards the market-type economy, which would again be stable, self-reinforcing and self-sustaining. Transition promoted the development of new states in Eastern Europe that conformed to the Copenhagen criteria for the EU accession. Were we too hasty in thinking that we had succeeded? The new systems are not returning to the previous one, and only in a few areas have the basic norms of a market-type economy been set aside in Hungary or Poland. But concerns arise at the interface between politics, law and economics – to do with the rule of law, the nature and role of the state, and the interactions between parliament, the executive and the judiciary. Unavoidably, there is also an interesting international dimension here, represented by the shift from the Warsaw Pact and CMEA to NATO and the EU. This paper explores these issues in the light of some of Kornai's recent analysis of developments in Hungary, while also drawing on his very insightful earlier works.
Both the level and composition of public expenditures and revenues have implications for economic development, as argued by the ‘fiscal multiplier’ and the ‘quality of public finance’ literature. Public finance decisions also influence the distribution of income. By reviewing the literature, I argue for a fair distribution of income as reflected in low income inequality, not particularly because of the impact of income inequality on long-term growth (which is a controversial issue), but primarily because income inequality typically implies inequality of opportunity. European Union countries have very diverse public finance structures and different levels of effectiveness, and there is room for improvement in growth and equality impacts in all countries. A general guideline would be that the most effective approach comprises progressive taxes and inheritance taxes, spending on education, health and public infrastructure, and better government effectiveness. At the height of the 2008 global and the subsequent European financial and economic crises, the fiscal consolidation strategies of EU countries largely relied on cutting public investment and social spending (except pensions), which is the opposite of what is suggested in the literature. Better fiscal rules and good fiscal institutions are needed to safeguard growth- and distribution friendly expenditures in a crisis.
Kosovo is one of the poorest countries in Europe, despite the various poverty alleviation programs implemented by the authorities and the international funding community. This study aims to analyze income distribution inequality and factors behind rural households' poverty in Kosovo. Data on farm income, nonfarm income, unearned income, and socio-economic characteristics were collected using a semi-structured questionnaire from 203 randomly selected households in Kosovo. Linear regression, one-way ANOVA, and different versions of poverty indexes were used to examine the data. One-quarter of households' income comes from nonfarm activities. The middle-income households had the highest potential to find alternative employment in the nonfarm sector. Years of education, household size, number of family members above the age of 18, and total income had a positive impact on nonfarm revenues. The poorest rural households had the highest share of income from farm activities (77.52%). Nonfarm revenues have a positive impact on poverty alleviation; thus, the study suggests adopting suitable rural policies to enhance nonfarm employment for vulnerable rural households. The agro-tourism sector and circular economy approaches in agriculture with the focus on renewable energy can be considered as potential sources of nonfarm income, which could lead to sustainable poverty reduction.
The hegemony of the Western higher education institutions in the global university market is being challenged by China. The top Chinese universities have significantly improved their international ranking positions. When it comes, however, to the ability of universities to attract foreign students and faculty, the Chinese higher education institutions' performance raises questions. The International Outlook scores of these universities, although showing an increasing trend, are still lacking behind the U.S. or Western European top universities. China is primarily a student ‘exporter.’ It also became a leading destination country for students from Asia or Africa, but it is still far from reaching the ‘international openness’ level of the U.S. or the UK universities. The publication networks of the top Chinese higher education institutions indicate that these universities prefer to publish with other Chinese institutions or the U.S. universities.