This study examines the role of institutional quality and its threshold in the sensitivity of CEO pay to firm performance in an emerging market economy, using a generalized method of moments, Driscoll and Kraay's nonparametric covariance matrix estimator, and robust dynamic panel threshold. Bureaucratic quality and corruption control weaken performance‐based pay for CEOs, while law and order strengthen it. The overall institutions allow boardroom backscratching which biases executive compensation contracts. The study shows that the country operates below the institutional quality threshold values required to spur performance‐based pay for CEOs. The study concludes that institutions matter in CEO pay‐firm performance nexus.
In demography and population economics discourse, the macroeconomic implications of an upsurge in working age population, notably the labour force, on economic growth has been widely studied and the inherent beneficial impact has become known as demographic dividend. However, the exact mechanism linking the dividend to growth remains a perennial question. This motivates the current study to investigate empirically the dividend-growth nexus in the context of Nigerian economy in a multivariate VAR model spanning between the period 1970 and 2017. Specifically, the paper attempted to answer the question: Is the Nigerian Demographic Dividend an Education-triggered Dividend? Innovation Accounting Techniques was applied to assess the dynamic interactions among the variables. The empirical evidence obtained revealed that the innovation in gross enrollment made much contribution to the variation in economic growth relative to innovation in economic support ratio. The magnitude ranges between 20.09 and 27.54 percent. This result, thus, lend credence to the theoretical view of the education-triggered dividend model which ascribes to education twofold roles of helping to lessen fertility and also enhancing productivity but invalidates the conventional dividend paradigm.
The debate on whether income inequality promotes, restricts, or is independent of economic growth has been widely studied and discussed in development economics discourse. However, a careful reading of this extensive extant and burgeoning literature suggests that, other than the ambivalent nature and the fact that the bulk of these studies relied heavily on cross-section/-country/panel econometric analysis, empirical studies examining the nexus in the context of less developed economies, particularly, African countries, has received less attention, as most of the extant studies predominantly focused on developed economies. This current study, thus, attempts to examine the impact of inequality on growth in Nigeria spanning between the period 1970 and 2018. It also examined the theoretical predictions of some of the distinct transmission channels through which inequality impacts growth. Time series econometrics were applied. The results obtained consistently revealed that inequality hurts long-run growth in Nigeria. Also, the results obtained revealed that inequality in income increases relative redistribution and fertility, but lessens investment, gross enrollment ratio, and property rights protection in Nigeria, which may in turn impede growth.
The debate on the nature of the relationship between cohort size and unemployment rate has been widely studied and generated a substantial body of literature in labor economics discourse. However, an in-depth reading of this literature suggests that, besides the fact that findings are mixed and do not provide conclusive evidences, one hardly ever comes across studies exclusively on African countries. Likewise, generalized studies across countries employing pooled data seem to dominate the literature. In light of these, the current study examines the nature of the said relationship, over the period 1970–2019, in Nigeria in a multivariate and dynamic framework. Employing Bounds testing procedure, the article finds that both the short-run and long-run impacts of cohort size on overall unemployment rate are positive and statistically significant. This suggests that aggregate unemployment rate tends to be higher when many young people supply labor. In view of these findings, the article recommends that government should collaborate with private sector to develop and implement functional microcredit schemes. Such schemes should be flexibly structured to avert institutional bottlenecks and enhance accountability and transparency in their management.
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