Economic Freedom and Income Inequality: Does Political Regime Matter?

Ahmad, Mahyudin

doi:10.3390/economies5020018

Cited by 21 publications

(10 citation statements)

References 43 publications

(64 reference statements)

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“…The political theory is known as a corporate citizenship group [26]. This group of theories focuses on the interactions and relationships between corporations and society, as well as the roles and positions of corporations and their responsibilities.…”

Section: Political Theorymentioning

confidence: 99%

The effect of voluntary disclosure on financial performance: Empirical study on manufacturing industry in Indonesia

et al. 2023

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The manufacturing sector’s adherence to managing natural resources from the environment still needs to be improved. This study’s objective is to determine how Corporate Social Responsibility (CSR) influences the financial performance of manufacturing firms featured in the LQ45 Index, as measured by Return on Assets (ROA), Return on Equity (ROE), and Net Profit Margin (NPM). All manufacturing companies that are included in the LQ45 Index’s population for this study were sampled using the purposive sampling method. This study uses secondary data from the CSRI based on the Global Reporting Initiative (GRI) G4 standard for 2018–2020 and the annual reports of companies in the manufacturing industry sector listed on the LQ45 Index. Moreover, applying a quantitative methodology, descriptive statistical methods, conventional assumption tests, and simple linear regression analysis were applied in this study’s data analysis. The results of the study proved that CSR has a significant effect on ROA but does not affect the ROE and NPM of LQ45 manufacturing companies. In accordance with the signaling theory, CSR disclosure sends a favourable message to outsiders, which stakeholders and shareholders will respond to through changes in business earnings. CSR implementation can establish a positive image for the company, but it can also improve the company’s image in both the commodity and capital markets. Investors will be more attracted to a company with a positive corporate image since a positive corporate image increases consumer loyalty. As consumer loyalty rises, the company’s sales will likewise rise, and its profitability will increase as a result. This paper opens a new research path in corporate social responsibility and financial performance for possible links among variables; a matter that has not been previously explored in Indonesia Manufacturing Public Companies.

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Section: Political Theorymentioning

confidence: 99%

The effect of voluntary disclosure on financial performance: Empirical study on manufacturing industry in Indonesia

et al. 2023

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“…This is not surprising when considering the fact that within the EU context the size of government could be regarded as an indicator of welfare state characteristics. Ahmad (2017) examined the relationship between economic freedom and income inequality by taking into account the role of political regime. The data set used in this study covers 115 nations for the time span from 1970 to 2014.…”

Section: Related Literaturementioning

confidence: 99%

Income Inequality and Economic Freedom: The 2000s

Yilmaz

Balkan

Tag

2022

JATSS

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This study examines the relationship between income inequality and economic freedom by using two concepts developed in institutional economics, namely “extractive and inclusive institutions”. We argue that income inequality might be high both in countries with extractive institutions, where the level of economic freedom is low, and in countries with inclusive institutions, where the level of economic freedom is high. We propose a U-shaped relationship between income inequality and economic freedom. We use a panel data set containing 1425 country-year observations from 137 countries for the years from 2000 to 2018 to test our proposition. The results confirm our expectation that the relationship between income inequality and economic freedom is negative at low levels of economic freedom, but positive at high levels of economic freedom.

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“…In a study covering 115 countries, Ahmad (2017) found that there is a positive relationship between the general economic freedom index and income inequality and that this relationship was stronger in terms of free foreign trade and market regulations (Ahmed, 2017: 23).…”

Section: Empirical Studiesmentioning

confidence: 99%

Long-Run Relatıonshıp between Economıc Freedom and Income Inequalıty: Evidence from G-7 Countrıes

Akbakay¹

2020

Atatürk Üniversitesi İktisadi Ve İdari Bilimler Dergisi

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This paper examines the long run relationship between economic freedoms and income inequality in G-7 countries over the 2000-2015 period. The World Economic Freedom Index (EFW) that created by the Fraser Institute is one of the methods of measuring economic freedoms in a country. The EFW consists of five sub-indices: size of the government, legal system and property rights, sound money, freedom to trade internationaly and regulations. According to the results of this study, EFW increases income inequality in G-7 countries. However, all of the areas of economic freedom do not affect income inequality in the same direction. While freedoms in government size and legal system areas has increased the income inequality; freedoms in free trade to internationally, sound money and regulation areas reduce income inequality.

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Economic Freedom and Income Inequality: Does Political Regime Matter?

Cited by 21 publications

References 43 publications

The effect of voluntary disclosure on financial performance: Empirical study on manufacturing industry in Indonesia

The effect of voluntary disclosure on financial performance: Empirical study on manufacturing industry in Indonesia

Income Inequality and Economic Freedom: The 2000s

Long-Run Relatıonshıp between Economıc Freedom and Income Inequalıty: Evidence from G-7 Countrıes

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