Abdilahi Ali | University Of Salford Manchester (original) (raw)

Papers by Abdilahi Ali

Strategy, Leadership, and AI in the Cyber Ecosystem, 2021

Abstract Fault identification during warranty is quite complex because of sophisticated product d... more Abstract Fault identification during warranty is quite complex because of sophisticated product design and distributed manufacturing. Various supply chain facilities located at diverse geographical locations are usually utilised to manufacture a particular product. If a fault occurs in one component of a product, it may be linked with other components which are procured and manufactured by other segments of the globally distributed supply chain. Hence, in this multifaceted scenario, the information systems have to be integrated and responsive enough to respond proactively in sharing data from heterogeneous systems across the supply chain in the cyber ecosystem. To achieve this goal, in this chapter, we integrate warranty data from multiple datasets. Initially, social media dataset is used. Consumers increasingly engage in information sharing on weblogs, forums, Facebook, and Twitter, among others. This valuable information is mostly untapped by the automotive manufacturers. To explore the large amount of hidden fault-related data, we used data analytics. Then, we develop a cloud-based collaborative framework to manage the warranty data from other supply chain information systems, namely, design, manufacture and service. The framework provides integration and access of warranty data from multiple datasets of supply chain. The proposed ‘autonomous smart agents’ interaction assists to establish real-time warranty data exchange across the supply chain. The combined data can then be used for detailed expert analysis by fault learning and rectification agent. The execution of the framework is demonstrated using an illustrative execution process. Our contributions are clearly detailed, and some important managerial insights are provided for warranty management in globally distributed supply chain.

Computers & Operations Research, 2021

When the product family (PF) and the supply chain designs (SCD) are aligned and integrated, origi... more When the product family (PF) and the supply chain designs (SCD) are aligned and integrated, original equipment manufacturers (OEM) are more likely to improve their operational performance. In this paper, we propose a novel approach, which demonstrates how both the product and the supply chain can simultaneously be designed based on real-time data. At the heart of the proposed model is the utilisation of a cloud-based management system comprising of three steps. In the first step, a generic bill of materials is modelled to design a set of product families using "AND" and "OR" nodes. In the second step, a cloud-based framework is designed to manage real-time costs viz. echelons. In the third step, a mixed integer linear programming model is then applied, which optimizes the SCD based on real-time costs. We use a metaheuristic method based on Genetic Algorithm (GA) to solve the optimization problem. We further illustrate the model using power transformer numerical example. Then the critical parameters of GA are examined to determine the best settings. We believe that the proposed SCD is an intelligent and expert management system, which can facilitate effective decision-making support by taking into account real-time cost data. This is particularly important when there are uncertain and volatile market conditions.

International Business Review, 2020

This article explores the factors that motivate firms to learn new management practices. The hypo... more This article explores the factors that motivate firms to learn new management practices. The hypotheses are empirically tested using a representative sample of 3,676 small, medium and large firms from four South Asian countries and across all main sectors of economic activity. Given that we know little about the antecedents of the propensity to learn management practices in emerging markets, the study employs Bayesian Model Averaging approach to overcome the potential issue of model uncertainty. The results reveal that market competition, resource allocation towards internal and external R&D, good quality mobile network coverage and the use of external certified financial auditors have all positive and significant effects on the propensity to learn management practices. The results also suggest that private intellectual property rights protection in the context of inefficient legal systems can deter firms from learning, perhaps in fear of legal ramifications. Finally, the study shows that firms with a higher propensity of learning management practices are more likely to become profitable while exhibiting higher levels of both potential and actual innovation.

The Journal of Developing Areas, 2017

Remittance flows have become a vital source of foreign exchange for many developing countries. As... more Remittance flows have become a vital source of foreign exchange for many developing countries. As a result, the issue of whether they act as complements or substitutes for domestic investment remains an important avenue of research. We know that remittances can act as compensatory transfers, in which case altruistic motives may dominate. We also know that they can act as standard capital flows, where self-interest/ investment motivates may dominate. Hence, the motives behind remittance flows can have a direct bearing on how they influence domestic capital formation. In addition, the short-run relationship between domestic investment and remittances may be different from their long-run relationship. In light of these considerations, this paper reexamines whether migrant remittances "crowd in" or "crowd out" investment in developing countries, using a sample of 47 developing and emerging economies. The paper employs recently developed panel cointegration techniques given that these can overcome a number of important issues. First, we explicitly account for cross-sectional dependence, outliers as well as crosssectional heterogeneity. Second, since our variables of interest may be influenced by various factors emanating from, for example, domestic policy changes or global economic trends, we account for structural breaks and regime shifts. Third, the approaches we employ are robust to endogeneity and many forms of omitted variable bias. Fourth, we examine both the long-run as well as the short-run relationship between remittance flows and domestic investment, employing panel error correction model to uncover the short-run dynamics. Finally, we conduct a panel Granger causality analysis to establish whether these relationships are indeed of a causal nature. The results of the paper show that remittances form a long-run equilibrium relation with domestic investment. The results of the panel vector error correction model reveal the absence of a short-run relationship but the presence of a long-run bidirectional link between remittances and investment. Thus, remittances drive investment while investment itself causes more remittances, suggesting that remittances are not only driven by altruistic motives but also investment motives. This long-run (causal) two-way relationship is robust to a battery of sensitivity analyses. However, when the sample is disaggregated into regions, the results of the Asian sub-sample are statistically insignificant. We suspect that this is due to the low number of observations from that region. An important policy implication emanating from this study is that developing countries should improve the effectiveness of remittance inflows given that these can augment the rate of capital accumulation.

SSRN Electronic Journal, 2016

This paper extends a two-period Overlapping Generations model of endogenous growth where the inte... more This paper extends a two-period Overlapping Generations model of endogenous growth where the interactions between public infrastructure, human capital with R&D activities, and growth are studied. The paper makes two important contributions. First, it accounts for the spillover effect of the stock of ideas on learning which in turn promotes the production of innovative technologies. In doing so, it brings to the fore a two-way interaction between human capital and innovation. The paper then applies various econometric methods which confirm the above theoretical thesis. Second, the solutions of the model emphasise the important role public spending on infrastructure, human capital and R&D can play in promoting economic growth. In order to study the transitional dynamics of the model and to illustrate the impact of public policy, the model is calibrated using the average data for low-income countries and a sensitivity analysis is reported under different parameter configurations. The findings of the numerical analysis show that trade-offs in the allocation of public spending may inevitably emerge. In particular, investment in public infrastructure at the expense of spending on R&D is less likely to succeed in promoting economic growth, whereas it may be more effective to foster growth through an offsetting cut in another productive component, namely, education. In light of these potential trade-offs, governments in low-income countries need to use their limited budgets as part of holistic measures in order to achieve efficient outcomes.

Institutions and Comparative Economic Development, 2012

Primary commodity prices have been increasing, especially since the early 2000s and at an acceler... more Primary commodity prices have been increasing, especially since the early 2000s and at an accelerated pace during 2007–08, with implications for food security in the developing world. Against this backdrop, much recent research has focussed on understanding the causes and consequences of food price increases. The objective of the present analysis is to examine how food commodity and input prices have affected the supply of the former in 10 Asian economies. This analysis assumes greater significance in the context of the recent surge in oil and food prices, and its persistence. If, for example, oil prices continue to rise — as feared on present evidence — the food price surge may also persist.

Journal of Policy Modeling, 2014

The present study reexamines the effects of remittances on growth of GDP per capita using annual ... more The present study reexamines the effects of remittances on growth of GDP per capita using annual panel data for 24 Asia and Pacific countries. The results generally confirm that remittance flows have been beneficial to economic growth. However, our analysis also shows that the volatility of capital inflows such as remittances and FDI is harmful to economic growth. This means that, while remittances contribute to better economic performance, they are also a source of output shocks. Finally, remittances contribute to poverty reduction-especially through their direct effects. Migration and remittances are thus potentially a valuable complement to broadbased development efforts.

The School of …, 2011

... Katsushi Imai Raghav Gaiha Ganesh Thapa Abdilahi Ali May 2011 Economics ... USA Ganesh Thapa ... more ... Katsushi Imai Raghav Gaiha Ganesh Thapa Abdilahi Ali May 2011 Economics ... USA Ganesh Thapa International Fund for Agricultural Development, Rome, Italy Abdilahi Ali Economics, School of Social Sciences, University of Manchester, UK May, 2011 Abstract ...

Review of Development Economics , 2018

This paper extends a two-period Overlapping Generations model of endogenous growth where the inte... more This paper extends a two-period Overlapping Generations model of endogenous growth where the interactions between public infrastructure, human capital with R&D activities, and growth are studied. The paper makes two important contributions. First, it accounts for the spillover effect of the stock of ideas on learning which in turn promotes the production of innovative technologies. In doing so, it brings to the fore a two-way interaction between human capital and innovation. The paper then applies various econometric methods which confirm the above theoretical thesis. Second, the solutions of the model emphasise the important role public spending on infrastructure, human capital and R&D can play in promoting economic growth. In order to study the transitional dynamics of the model and to illustrate the impact of public policy, the model is calibrated using the average data for low-income countries and a sensitivity analysis is reported under different parameter configurations. The findings of the numerical analysis show that trade-offs in the allocation of public spending may inevitably emerge. In particular, investment in public infrastructure at the expense of spending on R&D is less likely to succeed in promoting economic growth, whereas it may be more effective to foster growth through an offsetting cut in another productive component, namely, education. In light of these potential trade-offs, governments in low-income countries need to use their limited budgets as part of holistic measures in order to achieve efficient outcomes.

This article explores whether the quality of the financial sector has an impact on the relationsh... more This article explores whether the quality of the financial sector has an impact on the relationship between property rights institutions and private investment. Using dynamic panel techniques, we show that strong property rights promote increased private investment and that this positive effect is stronger in countries with poorer financial systems, suggesting that institutions and finance act as substitutes in their effect on investment.

Abstract The objective of this paper is to explore the effects of crises and openness on a large ... more Abstract
The objective of this paper is to explore the effects of crises and openness on a large sample of African countries. Focusing on sudden stops, currency, twin and sovereign debt crises, the paper shows that crises are associated with growth collapses in Africa. In contrast, openness is found to be beneficial to growth. More specifically, consistent with standard Mundell-Flemming type models, greater openness to trade and financial flows is found to mitigate the adverse effects of crises. These findings are robust to various measures of both openness and crises as well as to endogeneity concerns.

This paper examines whether migrant remittances "crowd in" or "crowd out" domestic investment in ... more This paper examines whether migrant remittances "crowd in" or "crowd out" domestic investment in developing countries. Using recently developed panel cointegration techniques that account for cross-sectional dependence, structural breaks and regime shifts, the paper shows that remittances form a long-run equilibrium relation with domestic investment. The results of the panel vector error correction model reveal the absence of a short-run relationship but the presence of a long-run bidirectional link between remittances and investment. Thus, remittances drive investment while investment itself cause more remittances, suggesting that remittances are not only driven by altruistic motives but also investment motives.

The School of …, 2011

As an extension to , this paper re-examines how commodity and input prices have affected the supp... more As an extension to , this paper re-examines how commodity and input prices have affected the supply of key food commodities in 10 Asian economies. The results indicate that own prices negatively affects supply of rice, maize, wheat, fruits and vegetables. We also find that key input prices of oil and fertilizers have a negative impact on food supply. If high oil prices persist-as feared-the recent food price surge is also likely to persist. If our analysis has any validity, alarmist predictions of rise in poverty are contentious. However, as agricultural price uncertainty and volatility are likely to continue, largely as a result of the persistent uncertainty over supply against rising demand, quicker transmission of international prices to farm gate pricesespecially to smallholders-open trade policies and greater investment in agricultural research and extension are imperative.

csae.ox.ac.uk

According to economic theory, capital-scarce less developed countries should be able to retain do... more According to economic theory, capital-scarce less developed countries should be able to retain domestic capital, since the marginal returns should be relatively higher. Capital ‡ight, the out ‡ow of (unrecorded) foreign exchange from poorer countries, seems to defy this logic. Drawing on insights from portfolio choice theory, this paper presents empirical evidence that links capital ‡ight to the domestic investment climate. Using a panel data set for 37 African countries over the 1980-2005 period, the study …nds that once account is taken of the region's structural and institutional features, private capital out ‡ows from Africa are explained by policy distortions, along with the relative riskiness and poor pro…tability of investments. In addition, the study …nds evidence that the type and composition of resource ‡ows to the region are important for capital ‡ight: foreign aid generally discourages capital ‡ight while short term borrowing and FDI contribute to it. The …ndings of the paper are robust to endogeneity, outliers, sub-samples, and to di¤erent econometric methods.

Journal of Policy Modeling, 2014

The present study re-examines the effects of remittances on growth of GDP per capita using annual... more The present study re-examines the effects of remittances on growth of GDP per capita using annual panel data for 24 Asia and Pacific countries. The results generally confirm that remittance flows have been beneficial to economic growth. However, our analysis also shows that the volatility of capital inflows such as remittances and FDI is harmful to economic growth. This means that, while remittances contribute to better economic performance, they are also a source of output shocks. Finally, remittances contribute to poverty reduction -especially through their direct effects. Migration and remittances are thus potentially a valuable complement to broadbased development efforts. Yet migration and remittances should not be seen as a substitute for aid, as private money cannot be expected to contribute towards public projects. Also, not all poor households receive remittances, and public funds are meant to alleviate poverty.

Strategy, Leadership, and AI in the Cyber Ecosystem, 2021

Abstract Fault identification during warranty is quite complex because of sophisticated product d... more Abstract Fault identification during warranty is quite complex because of sophisticated product design and distributed manufacturing. Various supply chain facilities located at diverse geographical locations are usually utilised to manufacture a particular product. If a fault occurs in one component of a product, it may be linked with other components which are procured and manufactured by other segments of the globally distributed supply chain. Hence, in this multifaceted scenario, the information systems have to be integrated and responsive enough to respond proactively in sharing data from heterogeneous systems across the supply chain in the cyber ecosystem. To achieve this goal, in this chapter, we integrate warranty data from multiple datasets. Initially, social media dataset is used. Consumers increasingly engage in information sharing on weblogs, forums, Facebook, and Twitter, among others. This valuable information is mostly untapped by the automotive manufacturers. To explore the large amount of hidden fault-related data, we used data analytics. Then, we develop a cloud-based collaborative framework to manage the warranty data from other supply chain information systems, namely, design, manufacture and service. The framework provides integration and access of warranty data from multiple datasets of supply chain. The proposed ‘autonomous smart agents’ interaction assists to establish real-time warranty data exchange across the supply chain. The combined data can then be used for detailed expert analysis by fault learning and rectification agent. The execution of the framework is demonstrated using an illustrative execution process. Our contributions are clearly detailed, and some important managerial insights are provided for warranty management in globally distributed supply chain.

Computers & Operations Research, 2021

When the product family (PF) and the supply chain designs (SCD) are aligned and integrated, origi... more When the product family (PF) and the supply chain designs (SCD) are aligned and integrated, original equipment manufacturers (OEM) are more likely to improve their operational performance. In this paper, we propose a novel approach, which demonstrates how both the product and the supply chain can simultaneously be designed based on real-time data. At the heart of the proposed model is the utilisation of a cloud-based management system comprising of three steps. In the first step, a generic bill of materials is modelled to design a set of product families using "AND" and "OR" nodes. In the second step, a cloud-based framework is designed to manage real-time costs viz. echelons. In the third step, a mixed integer linear programming model is then applied, which optimizes the SCD based on real-time costs. We use a metaheuristic method based on Genetic Algorithm (GA) to solve the optimization problem. We further illustrate the model using power transformer numerical example. Then the critical parameters of GA are examined to determine the best settings. We believe that the proposed SCD is an intelligent and expert management system, which can facilitate effective decision-making support by taking into account real-time cost data. This is particularly important when there are uncertain and volatile market conditions.

International Business Review, 2020

This article explores the factors that motivate firms to learn new management practices. The hypo... more This article explores the factors that motivate firms to learn new management practices. The hypotheses are empirically tested using a representative sample of 3,676 small, medium and large firms from four South Asian countries and across all main sectors of economic activity. Given that we know little about the antecedents of the propensity to learn management practices in emerging markets, the study employs Bayesian Model Averaging approach to overcome the potential issue of model uncertainty. The results reveal that market competition, resource allocation towards internal and external R&D, good quality mobile network coverage and the use of external certified financial auditors have all positive and significant effects on the propensity to learn management practices. The results also suggest that private intellectual property rights protection in the context of inefficient legal systems can deter firms from learning, perhaps in fear of legal ramifications. Finally, the study shows that firms with a higher propensity of learning management practices are more likely to become profitable while exhibiting higher levels of both potential and actual innovation.

The Journal of Developing Areas, 2017

Remittance flows have become a vital source of foreign exchange for many developing countries. As... more Remittance flows have become a vital source of foreign exchange for many developing countries. As a result, the issue of whether they act as complements or substitutes for domestic investment remains an important avenue of research. We know that remittances can act as compensatory transfers, in which case altruistic motives may dominate. We also know that they can act as standard capital flows, where self-interest/ investment motivates may dominate. Hence, the motives behind remittance flows can have a direct bearing on how they influence domestic capital formation. In addition, the short-run relationship between domestic investment and remittances may be different from their long-run relationship. In light of these considerations, this paper reexamines whether migrant remittances "crowd in" or "crowd out" investment in developing countries, using a sample of 47 developing and emerging economies. The paper employs recently developed panel cointegration techniques given that these can overcome a number of important issues. First, we explicitly account for cross-sectional dependence, outliers as well as crosssectional heterogeneity. Second, since our variables of interest may be influenced by various factors emanating from, for example, domestic policy changes or global economic trends, we account for structural breaks and regime shifts. Third, the approaches we employ are robust to endogeneity and many forms of omitted variable bias. Fourth, we examine both the long-run as well as the short-run relationship between remittance flows and domestic investment, employing panel error correction model to uncover the short-run dynamics. Finally, we conduct a panel Granger causality analysis to establish whether these relationships are indeed of a causal nature. The results of the paper show that remittances form a long-run equilibrium relation with domestic investment. The results of the panel vector error correction model reveal the absence of a short-run relationship but the presence of a long-run bidirectional link between remittances and investment. Thus, remittances drive investment while investment itself causes more remittances, suggesting that remittances are not only driven by altruistic motives but also investment motives. This long-run (causal) two-way relationship is robust to a battery of sensitivity analyses. However, when the sample is disaggregated into regions, the results of the Asian sub-sample are statistically insignificant. We suspect that this is due to the low number of observations from that region. An important policy implication emanating from this study is that developing countries should improve the effectiveness of remittance inflows given that these can augment the rate of capital accumulation.

SSRN Electronic Journal, 2016

This paper extends a two-period Overlapping Generations model of endogenous growth where the inte... more This paper extends a two-period Overlapping Generations model of endogenous growth where the interactions between public infrastructure, human capital with R&D activities, and growth are studied. The paper makes two important contributions. First, it accounts for the spillover effect of the stock of ideas on learning which in turn promotes the production of innovative technologies. In doing so, it brings to the fore a two-way interaction between human capital and innovation. The paper then applies various econometric methods which confirm the above theoretical thesis. Second, the solutions of the model emphasise the important role public spending on infrastructure, human capital and R&D can play in promoting economic growth. In order to study the transitional dynamics of the model and to illustrate the impact of public policy, the model is calibrated using the average data for low-income countries and a sensitivity analysis is reported under different parameter configurations. The findings of the numerical analysis show that trade-offs in the allocation of public spending may inevitably emerge. In particular, investment in public infrastructure at the expense of spending on R&D is less likely to succeed in promoting economic growth, whereas it may be more effective to foster growth through an offsetting cut in another productive component, namely, education. In light of these potential trade-offs, governments in low-income countries need to use their limited budgets as part of holistic measures in order to achieve efficient outcomes.

Institutions and Comparative Economic Development, 2012

Primary commodity prices have been increasing, especially since the early 2000s and at an acceler... more Primary commodity prices have been increasing, especially since the early 2000s and at an accelerated pace during 2007–08, with implications for food security in the developing world. Against this backdrop, much recent research has focussed on understanding the causes and consequences of food price increases. The objective of the present analysis is to examine how food commodity and input prices have affected the supply of the former in 10 Asian economies. This analysis assumes greater significance in the context of the recent surge in oil and food prices, and its persistence. If, for example, oil prices continue to rise — as feared on present evidence — the food price surge may also persist.

Journal of Policy Modeling, 2014

The present study reexamines the effects of remittances on growth of GDP per capita using annual ... more The present study reexamines the effects of remittances on growth of GDP per capita using annual panel data for 24 Asia and Pacific countries. The results generally confirm that remittance flows have been beneficial to economic growth. However, our analysis also shows that the volatility of capital inflows such as remittances and FDI is harmful to economic growth. This means that, while remittances contribute to better economic performance, they are also a source of output shocks. Finally, remittances contribute to poverty reduction-especially through their direct effects. Migration and remittances are thus potentially a valuable complement to broadbased development efforts.

The School of …, 2011

... Katsushi Imai Raghav Gaiha Ganesh Thapa Abdilahi Ali May 2011 Economics ... USA Ganesh Thapa ... more ... Katsushi Imai Raghav Gaiha Ganesh Thapa Abdilahi Ali May 2011 Economics ... USA Ganesh Thapa International Fund for Agricultural Development, Rome, Italy Abdilahi Ali Economics, School of Social Sciences, University of Manchester, UK May, 2011 Abstract ...

Review of Development Economics , 2018

This paper extends a two-period Overlapping Generations model of endogenous growth where the inte... more This paper extends a two-period Overlapping Generations model of endogenous growth where the interactions between public infrastructure, human capital with R&D activities, and growth are studied. The paper makes two important contributions. First, it accounts for the spillover effect of the stock of ideas on learning which in turn promotes the production of innovative technologies. In doing so, it brings to the fore a two-way interaction between human capital and innovation. The paper then applies various econometric methods which confirm the above theoretical thesis. Second, the solutions of the model emphasise the important role public spending on infrastructure, human capital and R&D can play in promoting economic growth. In order to study the transitional dynamics of the model and to illustrate the impact of public policy, the model is calibrated using the average data for low-income countries and a sensitivity analysis is reported under different parameter configurations. The findings of the numerical analysis show that trade-offs in the allocation of public spending may inevitably emerge. In particular, investment in public infrastructure at the expense of spending on R&D is less likely to succeed in promoting economic growth, whereas it may be more effective to foster growth through an offsetting cut in another productive component, namely, education. In light of these potential trade-offs, governments in low-income countries need to use their limited budgets as part of holistic measures in order to achieve efficient outcomes.

This article explores whether the quality of the financial sector has an impact on the relationsh... more This article explores whether the quality of the financial sector has an impact on the relationship between property rights institutions and private investment. Using dynamic panel techniques, we show that strong property rights promote increased private investment and that this positive effect is stronger in countries with poorer financial systems, suggesting that institutions and finance act as substitutes in their effect on investment.

Abstract The objective of this paper is to explore the effects of crises and openness on a large ... more Abstract
The objective of this paper is to explore the effects of crises and openness on a large sample of African countries. Focusing on sudden stops, currency, twin and sovereign debt crises, the paper shows that crises are associated with growth collapses in Africa. In contrast, openness is found to be beneficial to growth. More specifically, consistent with standard Mundell-Flemming type models, greater openness to trade and financial flows is found to mitigate the adverse effects of crises. These findings are robust to various measures of both openness and crises as well as to endogeneity concerns.

This paper examines whether migrant remittances "crowd in" or "crowd out" domestic investment in ... more This paper examines whether migrant remittances "crowd in" or "crowd out" domestic investment in developing countries. Using recently developed panel cointegration techniques that account for cross-sectional dependence, structural breaks and regime shifts, the paper shows that remittances form a long-run equilibrium relation with domestic investment. The results of the panel vector error correction model reveal the absence of a short-run relationship but the presence of a long-run bidirectional link between remittances and investment. Thus, remittances drive investment while investment itself cause more remittances, suggesting that remittances are not only driven by altruistic motives but also investment motives.

The School of …, 2011

As an extension to , this paper re-examines how commodity and input prices have affected the supp... more As an extension to , this paper re-examines how commodity and input prices have affected the supply of key food commodities in 10 Asian economies. The results indicate that own prices negatively affects supply of rice, maize, wheat, fruits and vegetables. We also find that key input prices of oil and fertilizers have a negative impact on food supply. If high oil prices persist-as feared-the recent food price surge is also likely to persist. If our analysis has any validity, alarmist predictions of rise in poverty are contentious. However, as agricultural price uncertainty and volatility are likely to continue, largely as a result of the persistent uncertainty over supply against rising demand, quicker transmission of international prices to farm gate pricesespecially to smallholders-open trade policies and greater investment in agricultural research and extension are imperative.

csae.ox.ac.uk

According to economic theory, capital-scarce less developed countries should be able to retain do... more According to economic theory, capital-scarce less developed countries should be able to retain domestic capital, since the marginal returns should be relatively higher. Capital ‡ight, the out ‡ow of (unrecorded) foreign exchange from poorer countries, seems to defy this logic. Drawing on insights from portfolio choice theory, this paper presents empirical evidence that links capital ‡ight to the domestic investment climate. Using a panel data set for 37 African countries over the 1980-2005 period, the study …nds that once account is taken of the region's structural and institutional features, private capital out ‡ows from Africa are explained by policy distortions, along with the relative riskiness and poor pro…tability of investments. In addition, the study …nds evidence that the type and composition of resource ‡ows to the region are important for capital ‡ight: foreign aid generally discourages capital ‡ight while short term borrowing and FDI contribute to it. The …ndings of the paper are robust to endogeneity, outliers, sub-samples, and to di¤erent econometric methods.

Journal of Policy Modeling, 2014

The present study re-examines the effects of remittances on growth of GDP per capita using annual... more The present study re-examines the effects of remittances on growth of GDP per capita using annual panel data for 24 Asia and Pacific countries. The results generally confirm that remittance flows have been beneficial to economic growth. However, our analysis also shows that the volatility of capital inflows such as remittances and FDI is harmful to economic growth. This means that, while remittances contribute to better economic performance, they are also a source of output shocks. Finally, remittances contribute to poverty reduction -especially through their direct effects. Migration and remittances are thus potentially a valuable complement to broadbased development efforts. Yet migration and remittances should not be seen as a substitute for aid, as private money cannot be expected to contribute towards public projects. Also, not all poor households receive remittances, and public funds are meant to alleviate poverty.