Assessing the Effect of Information Sharing in the Farm Credit Market: Evidence From Developing Countries

Information Asymmetry and Market Power in the African Banking Industry

Few estimation methods were discussed to handle the missing data problem in the panel data models. However, in the panel vector autoregressive (PVAR) model, there is no estimator to handle this problem. The traditional treatment in the case of incomplete data is to use the generalized method of moment (GMM) estimation based on only available data without imputation of the missing data. Therefore, this paper introduces a new GMM estimation for the PVAR model in case of incomplete data based on the mean imputation. Moreover, we make a Monte Carlo simulation study to study the efficiency of the proposed estimator. We compare between two GMM estimators based on the mean squared error (MSE) and relative bias (RB) criteria. The first is the GMM estimation based on the list-wise (LW) and the second is the GMM estimation using the mean imputation (MI) at multi-missing levels. The results showed that the MI estimator provides more efficiency than the LW estimator.

This paper finds that a 1 percent reduction in the cost of exporting or the cost of international transport is associated with an export diversification gain of 0.3 percent or 0.4 percent respectively. Lower domestic market entry costs can also promote diversification, but the elasticity is weaker (-0.1). To obtain these results, the authors construct new measures of export diversification for 118 developing countries using highly detailed 8-digit mirror data from the European Union. The analysis also incorporates new export cost data from the World Bank's Doing Business database, covering document preparation, inland transport, administrative fees, and port/customs charges. Findings are highly robust, including to the use of geography and colonial history as instruments for trade and entry costs. Both the signs and relative magnitudes of these effects are consistent with predictions from a heterogeneous firms model of trade with asymmetric costs.

This paper aims to analyse the effect of trade facilitation on sectoral trade flows. We use data from the World Bank's Doing Business Database on the fees associated with completing the procedures to export or import goods in a country, on the number of documents needed and on the required time to complete all the administrative procedures to import and export. An augmented gravity equation is estimated for 13 exporters and 167 importers using a number of estimation techniques, namely OLS, PPML and the Harvey model. A common result is that trade flows increase by lowering transport costs and the number of days required to trade. The outcome supports multilateral initiatives, as that in the WTO, which encourages countries to assess their trade facilitation needs and priorities and to improve them. The measures adopted will not only benefit the country that improves trade facilitation, but also it's trading partners.

Information Sharing and the Volume of Private Credit in Transition: Evidence from Ukrainian Bank-Level Panel Data

PurposeThe purpose of this paper is twofold: to explore the interrelationships between FDI with growth and sustainability dimension; and to empirically analyze the four dimensions, namely, environmental, economic, social and governance of sustainable FDI for South Asia and West Asia.Design/methodology/approachThe data utilized in the paper is sourced from the World Development Indicators and the Worldwide Governance Indicators, covering South and West Asian region over the period 2011–2017. The paper employed both static and dynamic panel (two-step difference generalized methods of moments) estimation methods.FindingsThe results established a significant and robust relationship of past year FDI inflows with the current year’s value of FDI inflows for both the regions. Further, some variances in the relationships such as control of corruption, long-run carbon emissions, research and development, number of trademark applications as per the contextual factors have been detected.Research limitations/implicationsThe conclusions related to gender and governance found in this paper will be of interest to both researchers and policy makers for substantially reorienting the sustainability attributes to the foreign investment.Originality/valueThe authors’ main contributions are: to encapsulate the conceptual framework into an empirical model by combining all the four dimensions, namely, environmental, economic, social and governance; to have analyzed the possible differences and similarities in the study based on South and West Asia; to have explored the relationship between gender and FDI.

This study investigates the impact of economic policy uncertainty (EPU) on foreign direct investment (FDI) inflows and examines how this relationship is moderated by institutional quality. The analysis is based on data from 37 developing countries over the period of 2002–2021. The World Uncertainty Index (WUI) and Worldwide Governance Indicators (WGI) serve as the primary data sources. Employing a two-step system Generalised Method of Moments (GMM) estimation for dynamic panel data, the study yields two key findings. First, policy uncertainty significantly reduces FDI inflows. Second, institutional quality – measured by the average of WGI dimensions – alleviates this negative effect. Robustness checks, including OLS estimation and analyses based on individual WGI components, confirm these results. Overall, the findings suggest that the adverse impact of policy uncertainty on FDI is conditional on the host country’s institutional strength; in countries with stronger institutions, FDI inflows are less susceptible to uncertainty.

Achieving the Sustainable Development Goals (SDGs) by 2030 remains a major global challenge, as progress continues to vary significantly across countries. While governance is widely recognized as a key enabler of sustainable development, few studies have systematically explored how its various dimensions affect SDG performance at the national level. This study addresses this gap by analyzing a balanced panel of 145 countries over the period 2016–2023, using data from the United Nations Sustainable Development Solutions Network (SDSN) and the Worldwide Governance Indicators (WGI). Drawing on the public interest theory of regulation, this study examines the influence of six governance dimensions—control of corruption, government effectiveness, political stability, regulatory quality, rule of law, and voice and accountability—on SDG achievement. The empirical analysis, based on a two‐step System Generalized Method of Moments (GMM) estimator, shows that all six dimensions exert a significant and positive effect on SDG performance, underscoring the strategic importance of institutional quality in advancing sustainability goals. This research contributes to the literature by offering a global, goal‐independent assessment and by operationalizing governance comprehensively through the WGI framework. The findings provide practical insights for policymakers and public institutions, emphasizing the need for governance‐driven strategies, institutional reforms, and outcome‐oriented interventions to accelerate progress toward the SDGs.

The choice of initial weighting matrix and the problem of instruments proliferation are crucial issues in generalized method of moments (GMM) estimators of dynamic panel models. In this study, we propose alternative system GMM estimators that utilize suboptimal initial weighting matrices together with reduced instruments set (specifically lag-limited and partially collapsed instruments). Comparison of the performance of the proposed estimators against the conventional estimator was undertaken in terms of bias, root mean squared error (RMSE) and coverage probabilities through Monte Carlo simulations. Our simulation results revealed that sub-optimally weighted system GMM estimator adopting partially collapsed instruments outperforms the standard GMM estimator in terms of both bias and RMSE for large T and large variance ratios as the coefficient of the lagged dependent variable gets close to zero. Under these scenarios, the system GMM estimators based on reduced instruments were also found to perform well in terms of coverage probabilities. As the process approaches a random walk, however, there is no considerable gain from the use of suboptimal initial weights matrix and reduced instruments in general.

ABSTRACTInformation technology is increasingly facilitating mechanisms by which information asymmetry between lenders and borrowers in the financial sector can be reduced in order to enhance financial access for human and economic development in developing countries. We examine conditional financial development from ICT-driven information sharing in 53 African countries for the period 2004–2011, using contemporary and non-contemporary quantile regressions. ICT is measured with mobile phone penetration and internet penetration, whereas information-sharing offices are public credit registries and private credit bureaus. The following findings are established. First, there are positive effects with positive thresholds from ICT-driven information sharing on financial depth (money supply and liquid liabilities) and financial activity (at banking and financial system levels). Second, for financial intermediation efficiency, the positive effects from mobile-driven information sharing are apparent exclusively in certain levels of financial efficiency. Third, with regard to financial size, mobile-driven information sharing is positive with a negative threshold, whereas internet-driven information sharing is positive exclusively among countries in the bottom half of financial size. Positive thresholds are defined as decreasing negative or increasing positive estimated effects from information-sharing offices and vice versa for negative thresholds. Policy implications are discussed.

An alternative two-step generalized method of moments estimator based on a reduced form model

The present study empirically investigates the relevance of the various specifications of relative Income hypothesis (RIH) in the case of Pakistan. World Development Indicators’ data is analyzed over the period of 1986 to 2016. This study tests the existence of income, consumption, and habit ratchet effects at the National level. Based on stationarity tests the techniques of Box Jenkin, Two Stage Least Square, Generalized Methods of Moments, and Limited Information Maximum Likelihood Method are utilized to estimate the four versions of relative income hypothesis. Findings of this research validate the significant prevalence of three types of ratchet effects in case of Pakistan. In Duesenberry-Eckstein-Formm (DEF) model, habit ratchet effect is found to be stronger than income ratchet effect. Whereas in modified Davis model Consumption ratchet effect exceeds the habit ratchet effect. It is observed that long run marginal propensities to consume are closer to one which demonstrates smooth consumption behavior over long period in Pakistan. The estimated short run marginal propensities to consume are observed to be less than long run marginal propensities to consume that accords with the existing consumption theory. These findings imply that all ratchet effects put pressure upon consumers to maintain the highest standard of living enjoyed in the past. In this process households do not retain balance between savings and consumption. Based on these findings, it is suggested to consider the impact of societal factor in formulating policies to shape the consumption patterns.

Looking the global trends of financial crises, it is obscure to draw any conclusion that whether greater financial inclusion is a threat or a safeguard for financial stability. In order to demystify the relationship the present study aims to examine the impact of financial inclusion on financial stability among the BRICS countries over the period 2005 through 2015. In order to accomplish this study we gathered data from various international data sources. Taking six different indicators of financial availability, accessibility and usability, this paper construct a single financial inclusion index for BRICS countries through Principle Component Analysis (PCA) method. Furthermore to know the causality between financial inclusion and financial stability, this study uses the Dumitrescue and Hurlin (2012) panel granger causality test. Additionally, to know the impact of financial inclusion on financial stability the system Generalized Method of Moments (GMM) estimator has been applied. The empirical findings of this study depicts that financial inclusion has a negative and significant effect on financial stability. The major reasons of adverse effects of financial inclusion on financial stability is due to rapid expansion of credit to the private sectors, erosion of credit standards of the banks, difficulties in credit assessment, increase in non-performing assets, credit defaults of the borrowers, and inadequate supervision of the banking sector. With context to the control variables we have used inflation (INF) and GDP growth rate (GDPGR) as our control variables. The results of the control variables show that inflation has negative and significant effect on financial stability, whereas GDP growth rate has positive and significant effect on financial stability of the BRICS countries. Based on our empirical findings this study recommends the policymakers to take appropriate policy measures before implementing pro financial inclusive policies. The financial institutions are advised to strength their banking efficiency to supervise the credit standard and to improve the credit assessment procedure and to provide credit to its customers based on their strict vigilance. The countries are advised to adopt stringent lawsuit and legal procedures for credit default of the borrowers.

This study examines the role of insurance in driving economic growth in Nepal. The study analyzed key indicators such as insurance penetration ratio, investment ratio, insurance claim ratio, profitability ratio, and employment trends from 2009/10 to 2023/24. Using an annual aggregate panel dataset from a total of 28 insurance companies —14 life and 14 non-life insurance companies, the study employs the system Generalized Method of Moments (GMM) estimator to address endogeneity and unobserved heterogeneity. The findings reveal that insurance penetration (0.1763, p = 0.0023) significantly boosts economic growth, underscoring its role in risk management and capital mobilization. However, the insurance claim ratio (0.1928, p = 0.1352) shows an insignificant effect, suggesting inefficiencies in claim settlement or low insurance awareness may limit its economic impact. Employment in the sector (0.0347, p = 0.0423) positively influences growth, highlighting job creation and financial benefits. Investments by insurers (0.2258, p = 0.0136) significantly stimulates the economy, emphasizing their role in capital market development. Additionally, insurer profitability (0.0936, p = 0.0202) enhances economic stability, reinforcing the importance of a robust insurance sector. The study concludes that insurance premium collection, investments, employment, and profitability are key drivers of economic growth. Policymakers should prioritize strategies to expand insurance markets, improve claim efficiency, and incentivize investments while fostering labor-intensive growth. The findings support integrated policies that strengthen financial resilience, enhance corporate profitability, and promote job creation. Future research should explore causal mechanisms and sector-specific impacts to refine policies for sustainable development. This study provides critical insights for policymakers, financial institutions, and businesses seeking to harness insurance as a tool for economic transformation in Nepal

No AccessPolicy Research Working Papers22 Jun 2013A Trio of Perspectives on Corruption: Bias, Speed Money and "Grand Theft Infrastructure"Authors/Editors: Charles Kenny, Michael Klein, Monika SztajerowskaCharles Kenny, Michael Klein, Monika Sztajerowskahttps://doi.org/10.1596/1813-9450-5889SectionsAboutPDF (1.3 MB) ToolsAdd to favoritesDownload CitationsTrack Citations ShareFacebookTwitterLinked In Abstract:A number of recent survey articles express hope that new data from enterprise surveys would shed new light on corruption complementing the corruption perception index by Transparency International. The paper explores this using the World Bank's Enterprise Survey data globally and not just the data on Eastern Europe and Central Asia that have been used before. The authors find that in general the Enterprise Survey data provide aggregate views on corruption that are similar to the corruption perception index. However, massive differences exist for key countries, such as China and India. This suggests that idiosyncratic, country-specific biases are at work in one or both data sources. The authors use the Enterprise Survey data and relate them to measures of bureaucratic complexity from the World Bank's Doing Business data, finding that more red tape is associated with higher corruption. The data are also consistent with the view that bribe payments reduce the burden of red tape. Finally, the paper looks at corruption in infrastructure. It has been suggested that the natural monopoly characteristics of infrastructure provide the lever to extract bribes. However, based on data on price-cost gaps, the authors find that infrastructure ventures in power and water typically charge prices below cost in developing economies, not anywhere near monopoly prices. Furthermore, the Enterprise Surveys do not suggest that infrastructure-related bribe payments are more significant than those, for example, related to tax payments or various forms of licensing. Existing sources on bribery surrounding specific projects suggest that the value of bribe payments may not be the biggest problem but the choice of uneconomic and inefficient projects. If infrastructure ventures were entirely dependent on revenue from user fees, they could not afford to pursue inefficient projects, thus reducing the cost of corrupt activity to society. Monopoly pricing would be better than the typical current pricing policy. Previous bookNext book FiguresReferencesRecommendedDetailsCited ByMonopoly Money: Foreign Investment and Bribery in Vietnam, a Survey ExperimentAmerican Journal of Political Science, Vol.59, No.211 September 2014Brazilian Anti-Corruption Legislation and Its Enforcement: Potential Lessons for Institutional DesignSSRN Electronic JournalInternational trade and climate changeInternational Tax and Public Finance, Vol.20, No.320 June 2012 View Published: November 2011 Copyright & Permissions Related TopicsFinance and Financial Sector DevelopmentMacroeconomics and Economic GrowthUrban Development KeywordsCORRUPTIONINFRASTRUCTUREINVESTMENT CLIMATE PDF DownloadLoading ...