ABSTRACT As economic globalization shifts toward regionalization, complex knowledge becomes increasingly crucial. Burgeoning literature begins to explore how complex knowledge facilitates economies. Given the representativeness of the “Belt and Road” Initiative in world economic regionalization, we extend this discussion within the countries involved, and make several distinctions. First, by combining the Fitness and Complexity (FC) Algorithm and the Matrix‐Estimation exercise in the bipartite network, we develop a more comprehensive and effective method to measure knowledge complexity based on the similarity and specialization of patents' output structure. Second, by employing the Instrument Variable Fixed Effect Quantile Regression (IV‐FEQR), we investigate the economic effects of complex knowledge production while considering heterogeneity and endogeneity issues. Our findings indicate that increasing knowledge complexity significantly promotes a country's economic growth, a result that remains robust across various checks. The benchmark result can be explained theoretically well through the macro‐ and micro‐level driving forces, which are also empirically identified. Heterogeneity results further reveal that the promotion effect varies across regions and “expirations.” In addition, the results of moderating effect regressions also emphasize the positive role of the “Belt and Road” Initiative as a moderator; we also find that its interaction with external factors exhibits both a leveraging effect and a mitigating effect. Our analysis provides practical insights for measuring knowledge complexity and offers important policy implications for boosting economic growth amid current geopolitical tensions.

ABSTRACT This study examines the intricate relationships between external debt and the depletion of economic resources across 54 African economies between 1990 and 2023, by running dynamic panel methods such as System GMM and panel cointegration to analyze endogeneity. The assessment points out a nonlinear debt limit at 55% of GDP and shows that Chinese secured loans have a greater negative impact on the environment than loans from other creditors. Our findings show that a 10% increase in the debt‐to‐GDP ratio leads to a 1.7% increase in deforestation and a 2.3% increase in mineral extraction, with these effects being more acute in resource‐dependent economies. The analysis further uncovered that the climate‐debt spiral, in which debt distress impels short‐term resource harvesting, therefore perturbing long‐term sustainability. The analysis gets a nonlinear threshold of debt at 55%, which elucidates the pronounced environmental impact of Chinese secured loans relative to other financing sources. We propose policies that can harmonize debt sustainability with ecological protection by means of conditional debt relief, governance reforms, and technology‐driven monitoring. The study adds to the flow of works on debt overhang, environmental economics, and sustainable development in resource‐abundant, capital‐scarce environments.

ABSTRACT This study examines whether the financial development levels of former communist countries converge, thereby following similar trajectories between 1998 and 2021. Given that financial institution and market development can evolve independently, we employ three key indicators to assess convergence: the Financial Development Index (FDI), the Financial Institutions Index (FII), and the Financial Markets Index (FMI). To test for stationarity, we apply panel stationarity tests incorporating both sharp and smooth structural breaks. Our findings indicate that only a few post‐communist countries exhibit stochastic convergence in overall financial development and its sub‐components. Furthermore, the Smooth Shifts Fourier Stationarity Test reveals that FDI, FMI, and FII do not stochastically converge in most post‐communist countries, underscoring diverse financial development paths and patterns. These results suggest that flexible and dynamic policies, tailored to both global trends and country‐specific needs, can promote more effective and sustainable financial development. Additionally, strengthening regional cooperation and fostering financial integration could support these economies in achieving more convergent financial trajectories.

ABSTRACT This study examines the linear and non‐linear effects of natural resource rents on health performance in 48 Sub‐Saharan African countries between 2000 and 2023. By employing the Driscoll–Kraay strategy to correct for cross‐sectional dependence and the IV‐GMM approach to address potential endogeneity, the analysis reveals a nuanced and robust inverted U‐shaped relationship between natural resource rents and health outcomes. Specifically, the results show that natural resources exert a positive linear effect at moderate levels, suggesting that resource revenues, when effectively mobilized, enhance health performance. However, the negative non‐linear effects highlight that over‐reliance on resource rents undermines sustainability, as volatility and misallocation erode the capacity of resource wealth to translate into long‐term improvements in population health. The robustness checks reinforce these findings across resource‐rich and resource‐poor countries, as well as among middle‐income economies, while differences emerge for low‐income economies where modest levels of resource rents remain insufficient to overcome the severe deficit in health infrastructure and institutional capacity. The disaggregation of resource types further reveals that oil, gas, coal, and forest rents are associated with health performance gains at moderate levels, though the non‐linear results confirm that higher dependence on any resource rent type eventually worsens health performance. Overall, the study highlights that policy design must establish frameworks that ensure natural resource wealth is converted into sustainable health improvements for populations across Sub‐Saharan Africa.

ABSTRACT This study employs data from Chinese listed firms between 2011 and 2022 to examine the impact of financial misallocation on digital transformation. The empirical analysis adopts a two‐way fixed effects model, supplemented by instrumental variable techniques and multiple robustness checks to mitigate endogeneity concerns. The results show that financial misallocation traps firms in a “resource scarcity” dilemma, thereby reducing their willingness and capacity to pursue digital transformation. Specifically, financial misallocation curtails real investment and R&D expenditures, which in turn hinder the digital transformation process. Moreover, the negative effect is more pronounced for non‐state‐owned firms, high‐tech firms, and smaller firms relative to their state‐owned, non‐high‐tech, and large‐scale counterparts. Further analysis reveals that heightened economic policy uncertainty compels firms to accelerate digital transformation as an adaptive response. Overall, the research provides empirical evidence for accurately assessing the economic consequences of financial misallocation and for formulating differentiated financial policies to support firms' digital transformation.

ABSTRACT This paper examines the relative importance of idiosyncratic and covariate shocks in shaping household vulnerability to poverty in rural Tanzania. Using five rounds of the Tanzanian National Panel Survey and a three‐level multilevel modeling framework, we account for the hierarchical structure of the data and decompose consumption variance into covariate and idiosyncratic components. Our results show that overall vulnerability to poverty, defined as the probability of falling into poverty at least once in the next 5 years, stands at 59%. Disaggregating by source, 61% of households are vulnerable due to idiosyncratic shocks, while 36% face vulnerability from covariate shocks. Households vulnerable to either shock type exhibit significantly lower food consumption, with idiosyncratic and covariate vulnerability associated with 12% and 10%–16% lower consumption, respectively, compared to non‐vulnerable households. Health shocks, in particular, emerge as critical drivers of idiosyncratic vulnerability, increasing the probability of being vulnerable by 3.2 percentage points. The correlates analysis underscores the protective role of assets, education, and infrastructure, while consistently showing that female‐headed households face higher vulnerability across all measures. These findings underscore the need for a two‐pronged policy response: strengthening household‐level risk management through rural health insurance, access to healthcare, and targeted safety nets, while simultaneously investing in systemic measures such as drought preparedness, food price stabilization, and community resilience building.

ABSTRACT Understanding why workers select into informal employment is essential for designing effective formalization policies across Sub‐Saharan Africa, where nine out of 10 workers remain informal. This paper estimates a self‐selection model with entry barriers to quantify involuntary informality in Senegal, a representative country in terms of informality levels and labor market rigidity. Using nationally representative household survey data, we find that the preference for formal employment is higher among workers with formal education, those who are married, and those with fewer young children. Preference also rises with age but at a decreasing rate. Our results indicate that informality in Senegal is primarily voluntary: only 30% of informal workers are involuntarily excluded from formal jobs. Findings are robust to alternative model specifications, informality definitions, and sample restrictions. By providing new evidence on the drivers of voluntary versus involuntary informality, this paper contributes to the literature on labor market segmentation in West Africa, an understudied but highly informal region.

ABSTRACTOne of the enduring economic puzzles in East Asia is the Philippines' lagging economic performance since the late 20th century. This paper examines the long‐run consequences of the country's sovereign debt crisis in the early 1980s—a unique event in East Asia at the time, triggered by a combination of adverse global shocks and domestic policy failures under the dictatorship of Ferdinand E. Marcos (1972–1986). We test the hypothesis that this crisis caused a lasting negative shock to the Philippines' growth trajectory. Using the synthetic control method, we find that from 1981 to 2019, annual synthetic GDP exceeded actual GDP by an average of 110%, suggesting a permanent downward shift in economic trajectory. We validate these findings with a range of placebo tests. Overall, the results highlight the extreme extent to which a severe debt crisis—caused and amplified by authoritarian economic mismanagement—can cast a long shadow over a developing country's subsequent growth trajectory.

ABSTRACT Limited access to finance and savings is widely recognized as a major constraint to rural development in most sub‐Saharan African countries. The transformative potential of digital finance for improving the livelihoods of the poor is a subject of growing interest among economists and development practitioners. This paper investigates the relationship between the use of mobile banking services, agricultural productivity, and household welfare using detailed micro‐level panel data from Benin, Côte d'Ivoire, Guinea‐Bissau, and Togo. Employing a comprehensive identification strategy, our findings indicate that mobile banking use significantly enhances both productivity and welfare outcomes for smallholder farmers. Specifically, mobile banking is associated with approximately 10% higher agricultural productivity, 4% higher per capita food consumption expenditure, and 12% higher per capita non‐food consumption expenditure. These results underscore the importance of expanding access to mobile financial services as a lever for promoting rural development.