Volume 26, Issue 3 (Autunm 2021)
JPBUD 2021, 26(3): 101-130 |
Back to browse issues page
Download citation:
BibTeX | RIS | EndNote | Medlars | ProCite | Reference Manager | RefWorks
Send citation to:
BibTeX | RIS | EndNote | Medlars | ProCite | Reference Manager | RefWorks
Send citation to:
Sajjadieh Khajaviee F, Bakhtiari S, Ghobadi S. (2021). The Impact of Country Risk Management on Economic Growth in the Selected OIC Countries. JPBUD. 26(3), 101-130. doi:10.52547/jpbud.26.3.101
URL: http://jpbud.ir/article-1-2004-en.html
URL: http://jpbud.ir/article-1-2004-en.html
1- Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran.
2- Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran ,bakhtiari@khuisf.ac.ir
3- Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran.
2- Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran ,
3- Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran.
Abstract: (3215 Views)
The economic performance to reduce country risk, in which the existing economic, social, and political conditions negatively affect the capacity to repay foreign debt and attract foreign direct investment, is one of the prominent issues in economic growth. Accordingly, the main purpose of this study is to evaluate the impact of country risk management on the economic growth of selected member countries of the Organization of Islamic Cooperation during the period (2006-2019). For this purpose, a composite index was developed by taking into account the most important indicators of economic performance related to country risk, including macroeconomic factors, social, political, and legal conditions, and characteristics of the banking system. Then, by using the Generalized Method of Moments (GMM), the effect of this index on the economic growth of the selected member countries of the Islamic Cooperation Organization was evaluated. The model estimation results show a significant and direct relationship between economic performance to reduce country risk and economic growth. The results also imply the significant and direct effect of trade openness, labor, and gross capital formation on economic growth. Meanwhile, inflation has had a significant and negative impact on economic growth.
Type of Study: Research |
Subject:
Macroeconomics
Received: Apr 23 2021 | Accepted: Oct 17 2021 | ePublished: Mar 06 2022
Received: Apr 23 2021 | Accepted: Oct 17 2021 | ePublished: Mar 06 2022
References
1. Arellano, M., & Bond, S. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations. The Review of Economic Studies, 58(2), 277-297. [DOI:10.2307/2297968]
2. Avramovic, D. (1964). Economic Growth and External Debt: Johns Hopkins Press.
3. Bagheri Pormehr, S., & Zahedi Azad, N. (2019). The Role of Regulatory Quality on the Impact of Foreign Direct Investment on Economic Growth. Planning and Budget Research, 1(3), 167-210. [Link:http://www.journaldfrc.ir/article_109249.html]
4. Bank for International Settlements (BIS) (2011). 81st Annual Report. http://bis.org/publ/arpdf/ar2011e.pdf
5. Becker, G. S. (1962). Investment in Human Capital: A Theoretical Analysis. Journal of Political Economy, 70(5, Part 2), 9-49. [DOI:10.1086/258724]
6. Berggren, N., Bergh, A., & Bjørnskov, C. (2012). The Growth Effects of Institutional Instability. Journal of Institutional Economics, 8(2), 187-224. [DOI:10.1017/S1744137411000488]
7. Brock, W. A., & Durlauf, S. N. (2001). What Have We Learned from a Decade of Empirical Research on Growth? Growth Empirics and Reality. The World Bank Economic Review, 15(2), 229-272. [DOI:10.1093/wber/15.2.229]
8. Brunnermeier, M. K., Garicano, L., Lane, P. R., Pagano, M., Reis, R., Santos, T., . . . Vayanos, D. (2016). The Sovereign-Bank Diabolic Loop and ESBies. American Economic Review, 106(5), 508-512. [DOI:10.1257/aer.p20161107]
9. Burriel, P., Checherita-Westphal, C. D., Jacquinot, P., Schonlau, M., & Stahler, N. (2020). Economic Consequences of High Public Debt: Evidence from Three Large Scale DSGE Models. ECB Working Paper, No. 2450. [DOI:10.2139/ssrn.3676264]
10. Checherita-Westphal, C., Hughes Hallett, A., & Rother, P. (2014). Fiscal Sustainability Using Growth-Maximizing Debt Targets. Applied Economics, 46(6), 638-647. [DOI:10.1080/00036846.2013.861590]
11. Coase, R. H. (1937). The Nature of the Firm. Economica, 4(16), 386-405. [DOI:10.2307/2626876]
12. Desta, A. (1985). Assessing Political Risk in Less Developed Countries. Journal of Business Strategy, 5(4), 40-53. [DOI:10.1108/eb039086]
13. Dowrick, S. (1995). The Determinants of Long-Run Growth. Paper Presented at the Proceedings of a Conference, Economic Group Reserve Bank of Australia.
14. Erb, C. B., Harvey, C. R., & Viskanta, T. E. (1996). Political Risk, Economic Risk, and Financial Risk. Financial Analysts Journal, 52(6), 29-46. [DOI:10.2469/faj.v52.n6.2038]
15. Garshasbi, A., & Yusefi, M. (2016). Assessment of International Sanctions on Iranian Macroeconomic Variables. Journal of Economic Modeling Research, 7(25), 129-182. [DOI:10.18869/acadpub.jemr.7.25.129]
16. Ghose, T. (1988). How to Analyse Country Risk. Asian Finance, 61-63.
17. Glaeser, E. L., La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (2004). Do Institutions Cause Growth? Journal of Economic Growth, 9(3), 271-303. [DOI:10.1023/B:JOEG.0000038933.16398.ed]
18. Grossman, G. M., & Helpman, E. (1991). Innovation and Growth in the Global Economy: MIT Press.
19. Haque, N. U., Kumar, M. S., Mark, N., & Mathieson, D. J. (1996). The Economic Content of Indicators of Developing Country Creditworthiness. Staff Papers, 43(4), 688-724. [DOI:10.2307/3867366]
20. Hayakawa, K., Kimura, F., & Lee, H. H. (2013). How Does Country Risk Matter for Foreign Direct Investment? The Developing Economies, 51(1), 60-78. [DOI:10.1111/deve.12002]
21. Heidari, H., Alinazhad, R., Mohseni Zonozi, S. J., & Jahangirzadeh, J. (2014). An Investigation of Corruption and Economic Growth Nexus: Some Evidence from D-8 Countries. Economics Research, 14(55), 157-183. [Link:http://joer.atu.ac.ir/article_926.html]
22. Hoedemakers, L. (2016). Institutions and Economic Growth in Africa: An Assessment. (Master Thesis). Lund University,
23. Hoti, S., & McAleer, M. (2004). An Empirical Assessment of Country Risk Ratings and Associated Models. Journal of Economic Surveys, 18(4), 539-588. [DOI:10.1111/j.0950-0804.2004.00230.x]
24. Kamali Dehkordi, P., Nazari Zaniani, A., Makiyan, S. N., & Dehghani, F. (2019). The Effect of the Different Kinds of Capital on Economic Growth of Selected Provinces of Iran. Quarterly Journal of the Macro and Strategic Policies, 7(25), 66-85. [DOI:10.32598/JMSP.7.1.66]
25. Keho, Y. (2017). The Impact of Trade Openness on Economic Growth: The Case of Cote d'Ivoire. Cogent Economics & Finance, 5(1), 1-14. [DOI:10.1080/23322039.2017.1332820]
26. Knight, F. H. (1921). Risk, Uncertainty and Profit (Vol. 31): Houghton Mifflin.
27. Nadiri, M., & Mohammadi, T. (2011). Estimating an Institutional Structure in Economic Growth Using GMM Dynamic Panel Data Method. Economic Modeling, 5(15), 1-24. [Link:http://eco.iaufb.ac.ir/article_555516.html]
28. Negahdari, E. (2014). The Role of Human Capital in the Efficacy of FDI on Economic Growth in the Countries of the Persian Gulf. Quarterly Journal of the Macro and Strategic Policies, 2(No5), 67-75. [Link:http://www.jmsp.ir/article_6257.html]
29. North, D. C. (1981). Structure and Change in Economic History: Norton.
30. North, D. C. (1990). Institutions, Institutional Change, and Economic Performance: Cambridge University Press. [DOI:10.1017/CBO9780511808678]
31. North, D. C., & Thomas, R. P. (1973). The Rise of the Western World: A New Economic History: Cambridge University Press. [DOI:10.1017/CBO9780511819438]
32. O'Connell, J. (1999). The Blackwell Encyclopedic Dictionary of International Management: Wiley-Blackwell.
33. Office of Comptroller of the Currency (2016). Country Risk Management. Washington, DC 20219.
34. OIC Economic Outlook (2020). Trade and Integration Challenges amid Rising Uncertainties. [Link:https://www.sesric.org/files/article/735.pdf]
35. Ostadramezan, A. S., Bazraei, M., & Karimi, M. (2017). Investigating the Factors Affecting Foreign Direct Investment Involvement with Emphasis on Institutional and Structural Variables in OPEC Selected Countries. Journal of Economic Business Research, 8(16), 1-13. [Link:http://jebr.azad.ac.ir/article_545540.html]
36. Outreville, J. F. (1998). Theory and Practice of Insurance: Springer Science & Business Media. [DOI:10.1007/978-1-4615-6187-3]
37. Qorbani, F., Sarlak, A., & Haji, G. (2020). The Impact of Human Capital and Business Environment on the Economic Growth of Iran's Provinces. Economic Modeling, 14(50), 153-176. [Link:http://eco.iaufb.ac.ir/article_672507.html]
38. Sargan, J. D. (1958). The Estimation of Economic Relationships Using Instrumental Variables. Econometrica: Journal of the Econometric Society, 393-415. [DOI:10.2307/1907619]
39. Shahabadi, A., & Bahari, Z. (2014). Effect of Political Stability and Economic Freedom on the Economic Growth in Selected Developed and Developing Countries. Quarterly Journal of Economic Growth and Development Research, 4(16), 72-53. [Link:http://egdr.journals.pnu.ac.ir/article_1139.html]
40. Shapiro, A. (1999). Multinational Financial Management: Prentice Hall.
41. Slesman, L., Baharumshah, A. Z., & Ra'ees, W. (2015). Institutional Infrastructure and Economic Growth in Member Countries of the Organization of Islamic Cooperation (OIC). Economic Modelling, 51(1), 214-226. [DOI:10.1016/j.econmod.2015.08.008]
42. Solow, R. M. (1956). A Contribution to the Theory of Economic Growth. The Quarterly Journal of Economics, 70(1), 65-94. [DOI:10.2307/1884513]
43. Šotić, A., & Rajić, R. (2015). The Review of the Definition of Risk. Online Journal of Applied Knowledge Management, 3(3), 17-26.
44. Stockman, A. C. (1981). Anticipated Inflation and the Capital Stock in a Cash In-Advance Economy. Journal of Monetary Economics, 8(3), 387-393. [DOI:10.1016/0304-3932(81)90018-0]
45. Swan, T. W. (1956). Economic Growth and Capital Accumulation. Economic Record, 32(2), 334-361. [DOI:10.1111/j.1475-4932.1956.tb00434.x]
46. Taheri, A. (2005). Attract Foreign Investment Barriers in Iran. Public Law, 7(14), 21-55. http://qjpl.atu.ac.ir/article_2935.html
47. Toksöz, M. (2014). Guide to Country Risk: How to Identify, Manage and Mitigate the Risks of Doing Business Across Borders: The Economist.
48. Turrey, A. A., & Maqbool, T. (2018). Relationship between Economic Growth and Poverty: A Study of Developing and Less Developed Countrıes. Towards Excellence: An Indexed Refereed Journal of Higher Education, 10(1), 51-57.
49. Wafo, G. L. K. (1998). Political Risk and Foreign Direct Investment. Universität Konstanz, Fakultät für Wirtschaftswissenschaften und Statistik,
50. Yim, J., & Mitchell, H. (2005). Comparison of Country Risk Models: Hybrid Neural Networks, Logit Models, Discriminant Analysis and Cluster Techniques. Expert Systems with Applications, 28(1), 137-148. [DOI:10.1016/j.eswa.2004.08.005]
51. Zergawu, Y. Z., Walle, Y. M., & Giménez-Gómez, J.-M. (2020). The Joint Impact of Infrastructure and Institutions on Economic Growth. Journal of Institutional Economics, 16(4), 481-502. [DOI:10.1017/S1744137420000016]
52. Zhuang, J., de Dios, E., & Martin, A. L. (2010). Governance and Institutional Quality and the Links with Economic Growth and Income Inequality: With Special Reference to Developing Asia. Asian Development Bank Economics Working Paper Series, No 193. [DOI:10.2139/ssrn.1619116]
| Rights and permissions | |
.jpg) |
This work is licensed under a Creative Commons Attribution 4.0 International License. |
