Aggregate accounting earnings, special items and growth in gross domestic product: evidence from Australia

Abstract

Macroeconomic analysts have been found to not take full account of aggregate accounting earnings when forecasting future growth in US gross domestic product (GDP). Using Australian data, we confirm this finding and find that the association between aggregate earnings and GDP growth is robust to inclusion of economic factors to capture the importance of the resources sector and the open nature of the Australian economy. We also find that this association is higher in the post‐IFRS period. Finally, we document that both aggregate earnings and negative special items are important for explaining future GDP growth and forecast errors.

The Relationship Between Scientific Production and Economic Growth Through R&D Investment: A Bibliometric Approach

“…Although GDP as a measurement of economic growth has limitations, [8] it still remains as the most common and appropriate way to measure it. [2,9] The methodology of this research considered GDP as part of the regression models in two specific locations: one of them as a dependent variable, specifically in terms of accumulated economic growth; and on the other hand as part of the main independent variable, constituted by the number of articles published divided by the percentage of GDP invested in R&D. Beyond the results obtained in the regressions, by itself considering cumulative economic growth as an approximation to the size of an economy is an innovative perspective compared to the existing literature. In addition, the main independent variable, being posed in the way it is, invites us to interpret it as a novel indicator of efficiency in terms of R&D effort.…”

“…[1] A flourishing economy is usually related to the size of its Gross Domestic Product (GDP), its GDP per capita or how agile its GDP growth is. [2] Nevertheless, it is less common among the literature to associate sustained economic growth to the efforts of research and development (R&D) conducted by each country, particularly related to its scientific production, and even more specifically to articles published. The United Nation's Sustainable Development Goals (SDGs) consider economic growth one of its priorities, precisely on SDG 8 "Decent work and economic growth", which at the same time contains, among its targets, achieving economic growth and productivity through innovation.…”

“…GDP remains to date as one of the most common ways to measure economic growth. [2] Even though it has some limitations, such as the fact that it is a measurement from today, but does not involve future sustainability or growth, [8] or even being proposed today some other ways of potentially measuring economic growth, such as lighting density in night images of planet Earth that reflect the concentration of lighting in urban areas and associated with economic activity, [9] GDP as traditionally stated permits a standardized and mainly comparable way of tracking economic growth at any country level. [10] In spite of the previous facts, GDP has been involved in bibliometric articles as a cause for different phenomena, or as a classification criterion.…”

“…[22] It is not only a matter of attracting investment towards emerging countries that need to boost their economic growths, [23] but also making sure that those companies that actually invest responsibly and efficiently in R&D get supported by their governments. [24] Regarding bibliometric studies, although there are studies considering GDP as a variable to measure economic growth [2,10] or as a classification criterion, [11][12][13][14] studies associated with stock markets are scarce. Cicea and Marinescu [25] analyzed the relationship between foreign direct investment and economic growth, but did not include innovation or R&D as variables associated with the previously mentioned relationship.…”