This research explores the role of Non-Government Organizations (NGOs) in corporate environmental responsibility practice within the context of a developing country, Ethiopia, and provides a framework that enables NGOs to influence firms to improve environmental performance and increase environmental disclosure. This research is a qualitative research which employs content analysis. The result of the study shows that the environmental NGOs in Ethiopia are engaged more on reacting to the damage that has been caused by the unsustainable business practices rather than working proactively by collaborating with corporations, government and other stakeholders. This implies that donors should play a pivotal role in this regard since it is the donors' thematic area of activities that dictates the NGOs projects and programs.
Purpose
– The purpose of this paper is to address the unresolved outcome of the research on the impact of dollarization on inflation by examining the partially dollarized economy of Eritrea.
Design/methodology/approach
– Inflation under partial dollarization is modelled based on money demand and supply framework. Using quarterly data for the study period 1996Q1-2008Q4, estimation is based on a vector error correction model together with dynamic ordinary least square.
Findings
– The results indicate that inflation increases as a result of an increase in dollarization. This applies to both the short-run and long-run estimations regardless of whether official or black market exchange rate data are used in the analysis. In terms of the short-run dynamics involved in the long-run relationship between dollarization and inflation, the speed of adjustment toward long-run equilibrium ranges from negative 7.2-7.6 percent per quarter.
Research limitations/implications
– The main policy implication of the finding is that the extent of dollarization should not be overlooked in controlling inflation in the short run and the long run.
Originality/value
– Despite a number of studies that examine the consequences of dollarization, the impact of partial dollarization on inflation in the Eritrean economy has never been addressed. This study, therefore, is original in its kind and resolves the controversial outcomes on the studies of inflation and dollarization by modelling inflation under partial dollarization, providing new evidence and revealing potential economic reasons for the discrepancies in the findings of the literature on partial dollarization.
Relying on hard currency or dollarizing an economy has been a common practice of many developing countries taking the form of dollarizing bank deposits and loans, settling transactions in dollars and the indexation of wages and prices in dollars. The relationship between dollarization and exchange rate volatility is both theoretically and empirically unresolved. While the effect of such practices has been the focus of numerous investigations, such studies have concentrated on the Latin American and Asian economies. This paper contributes to the limited research on the African economies by specifically investigating the consequences of dollarization on Eritrean exchange rate volatility. Using quarterly official and black market exchange rate data for the study period 1996-2008, E-GARCH analysis suggests that dollarization has a positive impact on real exchange rate volatility.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.