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International Journal of Economics and Financial Research

Online ISSN: 2411-9407
Print ISSN: 2413-8533

Quarterly Published (4 Issues Per Year)





Archives

Volume 4 Number 8 August 2018

Transfer Pricing of Multinational Corporations and Macroeconomic Volatility: Evidence from the U.S.


Authors: Patrick Ofei ; Abieku Neizer-Ashun ; George Owusu-Antwi ; Evans Darnor Maka
Pages: 266-273
Abstract
This paper investigates the extent of macroeconomic volatility caused by the transfer pricing behavior of multinational corporations. The study examined two possible transmission channels through which transfer pricing causes macroeconomic volatility, namely, terms of trade and budget policy channels. Using the EGARCH model with annual data on selected variables from 1980 to 2017, the paper found evidence of macroeconomic volatility caused by transfer pricing. The size of the shock from transfer pricing is high and statistically significant in the terms of trade and budget policy channels. Negative shock from multinational corporations shifting taxable income between high and low tax regimes had a larger effect than a positive shock on the country’s budget policy. The volatility caused by transfer pricing was short-lived in the terms of trade channel. However, in the budget policy channel, past volatility of transfer pricing persisted for a longer period to explain current volatility.

Impact of Financial Sector Development on Economic Growth: Evidence from Tanzania


Authors: Emmanuel S. Mwang?onda ; Steven L. Mwaseba ; David N. Ngwilizi
Pages: 258-265
Abstract
Financial sector has always been potential ingredient in bringing growth in an economy, the indirect impact of financial markets and institutions through saving mobilization and credit expansion is of extraordinary importance. By employing Autoregressive Distributed Lags (ARDL) approach impact of financial sector on economic growth of Tanzania is examined. The results show that, in both long-run and short-run, financial development exerts significant but negative effect on economic growth contrary to our expectations. The study employs the ratio of broad money to GDP (financial depth) as a proxy measure of financial development, along with inflation rate, real interest rate, real exchange rate, share on of investment to GDP, proportion of development expenditure to total expenditure and dummy for structural reforms as control variables during our estimations. Results also suggest non-existence of causality between financial development and economic growth. Thus the study suggests strengthening data availability on flow of credit from financial institution to the public is necessary to materialize the effect of financial sector in Tanzania.

Financial Liberalization and Money Demand in CEMAC: Evidence from GMM Estimations of a Dynamic Panel


Authors: Prao Yao S?raphin
Pages: 250-257
Abstract
The objective of this paper is to examine the impact of financial market development and liberalization on money demand behavior in Central African Economic and Monetary Community (CEMAC). We adopt the generalized method of moments (GMM) system for panel data. The empirical results indicate that financial liberalization has a negative impact on money demand. Moreover, real GDP and the GDP deflator affect it positively, while the main policy rate has a negative impact. In terms of economic policy involvement, monetary authorities must pursue reforms aimed at deepening financial liberalization measures so that banks actively participate in the financing of CEMAC economies.

Balkans’s Agriculture Value Chain.  Current Point of View


Authors: Elena Stavrova
Pages: 242-249
Abstract
The current global situation in agribusiness is characterized by rapid changes and endless challenges under the influence of many factors, some of which compete unidirectional. Many countries are slowly reforming agricultural policies. This has helped to increase trade and the greater role of the private sector in agriculture vis-à-vis the state. The population growth, income and urbanization, changing crop culture, eating crops, declining crops to feed the population have contributed to rising global food prices. At the same time, consumer requirements related to safety, quality, convenience of trading are increasing and the differential between agricultural and commodity prices is constantly increasing due to the differences in the technological provision of the two production processes. The changed paradigm in the diet of produced, processed and, above all, health-safe but higher-priced and differentiated agricultural products has created opportunities for agricultural entrepreneurs to transform the goods into consumer-demanded products. Small, highly mobile family agribusiness has prompted greater private sector involvement in agriculture and focusing on the development and improvement of agricultural value chain chains (AVCs) in terms of quality, productivity, efficiency and depth. The value chains are formalized relationships between producer groups, dealers, processors, service providers and non-governmental organizations that unite to achieve productivity gains and added value to their activities. Individual added value is achieved by bringing together participants in a single value chain, and its participants increase competitiveness and are better able to maintain the level of this competitiveness through a culture of innovation.The limitations of each participant in the value chain are eliminated by establishing synergies and rules for communications along the chain, with the ultimate goal of achieving higher value. The main commercial advantages of stakeholders to engage as part of an effective value chain can be defined as:- The ability to reduce the cost of doing business; increasing revenue increasing market impact; -Enhancing access to technology, information and capital for the process of innovation in manufacturing and marketing in order to gain higher added value and ensure higher quality of customers. These and other important aspects of the functioning of value chains are the subject of research in this work. As a result, some conclusions are drawn about the place of the Balkan countries in the agribusiness development chains as well as the prospects for the development of the process in the whole.