Arthaniti: Journal of Economic Theory and Practice

This study examines how the COVID-19 pandemic has impacted consumer confidence (CC) in India. Contrary to existing literature, we use individual-level responses on CC from a novel survey data of Reserve Bank of India (RBI) to examine the effect of COVID-19 on CC. We use data on consumer sentiments from the Consumer Confidence Survey conducted by India’s central bank, the RBI, between March 2020 and May 2022. COVID-19 indicators include confirmed cases and recoveries in this article. Exploiting the variations in consumer sentiments across several Indian cities, our regression exercise shows how COVID-19-related cases impact CC. Our findings show that confirmed cases negatively and significantly impact the current perception of the economy. In contrast, COVID-19 recoveries positively and significantly impact future outlooks. We further conduct a disaggregated analysis to analyse the effects of COVID-19 indices on several other household-level indicators, for instance, present perception and expectations of household income, potential employment prospects, household spending and general price levels. Overall, we find that COVID-19-related shocks have negatively affected households’ sentiments, and Indian households are inclined to spend less on non-essential goods and services.

JEL: D84, D90, E66, G50

Using cross-country data, this article investigates the impact of foreign direct investment (FDI) on growth in developing economies during globalisation. The study adopts an approach different from existing studies by categorising countries from Asia, Africa, Latin America, and the Caribbean based on FDI growth and per capita gross domestic product (GDP) growth relationship in the two phases: 1991–2004 and 2005–2019. In a sample of 29 countries, the least-squares dummy variable (LSDV) estimation shows a significant negative relationship between FDI and per capita GDP controlling for both country-specific and time-specific effects and various other factors including gross domestic capital formation, inflation, physical infrastructure, human capital, trade openness, financial development and governance. This study confirms the positive impact of FDI in the earlier phase, while a significant negative impact in the later phase. The observed negative relationship holds for sub-sets of the sample countries for the entire period. These results are despite the importance of human capital, infrastructure, financial development, trade openness and governance along with FDI. These developing countries thus need to formulate complementary domestic economic policies, including institutional changes, which complement foreign direct investment in promoting per capita growth.

JEL: F21, F43, O11, C23

The Arctic Zone of Russian Federation (AZRF) is a unique geography with diverse socioeconomic factors playing significant roles in its stability and progress. In order to accurately assess and evaluate the overall socioeconomic progress of AZRF, the heterogeneous factors should be considered in an integrated manner, which will give a holistic view of the socioeconomic stability and development of the region. The available literature on socioeconomic development of Russian Arctic region however suffers from lack of integrated analysis of heterogeneous indicators. In this article, the authors have selected five heterogeneous indicators which best describe the socioeconomic condition of a given region, which in this case is AZRF and performed integral analysis for the time period 2014–2019. The indicators refer to socioeconomic aspects such as gross regional product and amount of investments received by the region, which in turn leads to changes in employment opportunities and income level of the population along with social benefits available to them. The mathematical instrument used for the analysis is the theory of fuzzy logic in the framework of determination of the subdirect image of a fuzzy set. This method is scalable and can be extended to any number of indicators of diverse nature since the final score will be in the range of [0, 1] making comparison of regions and ranking possible. Using this method, the subjects were ranked at individual indicator level and at holistic level as a result of which the advantages and disadvantages of each subject and the AZRF as a whole were determined. At holistic level, the subjects were ranked as Krasnayarsky Krai, Arkhangelsk Oblast, Republic of Komi, Murmansk Oblast, Yamalo-Nenets Autonomous Okrug, Karelia Republic, Sakha Republic (Yakutia), Nenets Autonomous Okrug and Chukotka Autonomous Okrug based on the integral scores obtained.

JEL: R11

The global COVID-19 epidemic and the strategies that were adopted to restrict its spread, such as lockdowns, had a significant impact on international trade. While the health crisis and the lockdown restrictions were linked, their repercussions on world trade patterns were distinct. This study examines trade data from 30 Asian-Pacific countries to examine how the COVID-19 pandemic affected their trading patterns. In addition, it looks at the effects of COVID-19-related policies on trade flows and explores the causality between changes in trade flows and policies induced by COVID-19. The cross-sectionally augmented autoregressive distributed lag (CS-ARDL) model, Juodis, Karavias, and Sarafidis (JKS) causality test and Dumitrescu–Hurlin causality test were employed to examine trade patterns of the Asia-Pacific amidst the COVID-19 pandemic. The results of CS-ARDL model showed that COVID-19 cases, deaths and policy-related indices induced a noteworthy and negative influence on export and import flows of Asia and Pacific both in the short- and long run. However, with few exceptions, on average, the impact of COVID-19-related measures is far bigger than that of COVID-19 deaths as well as cases in the long run. Further, the study found that the COVID-19 cases, deaths and COVID-19 policy-related measures have a Granger-causal relationship with exports and imports. Therefore, fostering regional cooperation, strengthening trade agreements and prudent management of COVID-19-induced policies will be essential in a crisis like COVID-19 to streamline trade processes and to achieve the optimum level of exports and imports.

JEL: F14, H12, I10, I18

The present study analyses the effect of differences in government effectiveness, political stability, rule of law, voice and accountability, control of corruption and regulatory authority on bilateral trade. Based on the data collected for India and its trade partners over 24 consecutive years, the present study applies an augmented gravity model. The findings indicate that institutions at level and institutional distance play an important role in export promotion of India to these countries. Among the various institutional factors, voice and accountability, control of corruption and government effectiveness have considerable influence on exports from India. The study concludes that institutional quality needs to be improved further to enhance trade cooperation between these countries.

JEL: F41, C5, C0, E0