Margin: The Journal of Applied Economic Research

This study analyses an important policy issue pertaining to the public debt and external debt of BRICS nations from 1993 to 2020 using the Bohn framework and a penalised-spline estimation method. It also checks the robustness of the results using the ADF and co-integration tests. The results indicate that as the primary surplus reacts positively and significantly to public debt in China and South Africa, the debt is sustainable in these nations. In Brazil, India and Russia, the debt is not sustainable. The external debt policy is sustainable only in China and not in other BRICS nations. These results suggest the need for immediate policy interventions in Brazil, India and Russia to achieve sustainable levels of public debt and external debt. We hope that these results will be useful to policymakers and other stakeholders to take appropriate strategies to improve the public debt and external debt position of BRICS nations and to make them sustainable.

JEL Codes: H63, C23, D72, E62, H72

An economic evaluation of mega projects is very important for taking into account important aspects connected with investment and operation costs, their possible overflows and the fulfilment of the time period intended for the project. But it is also needed for monitoring the impact of the projects on the overall economy and the regional surroundings. The main objective of the present article is the evaluation of a particular mega project, that is, Ratnagiri Refinery and Petrochemicals Limited, by examining the various aspects of economic evaluation using a new methodology for the estimation of the specific impact in the project evaluation.

JEL Codes: C67, L71, L74

Exports are a lifeline to a country’s growth, and an overall index can describe its export performance. However, there is little evidence of a single measure encompassing all the relevant aspects of exports. A composite and multi-dimensional measure can aid in assessing the relative position of a country in the world list and identifies necessary policy interventions. The article proposes an Overall Export Performance Index that satisfies the principles of index formation—monotonicity, time reversal, robustness and an unbiased approach. The proposed index avoids selecting weights and scaling variables. It facilitates the identification of crucial indicators requiring the attention of policymakers, tracking the progress of a country across time and the computing of mean and variance of the index for a group of countries at a given time. An empirical comparison of the USA and India reveals that India registered better overall export performance than the USA from 2015 to 2018. The results suggest India’s need for reforms in existing foreign trade policies.

JEL Codes: F1, F10, F13

Energy efficiency improvement is one of the effective strategies to attain energy sustainability. Firms’ perceptions and attitudes towards energy efficiency improvement have come to be seen as vital in the supply and demand management of energy. This research aims to examine the influence of perceived role of government on manufacturing firms’ intentions to improve energy efficiency. Data were collected from a survey, and the research model was empirically tested. Results from the empirical analysis show that perceived role of government significantly influenced manufacturing firms’ intentions to improve energy efficiency. In addition, the results indicate that there was a significant mediating effect of attitude towards energy efficiency improvement on the relationship between perceived role of government and manufacturing firms’ intentions to improve energy efficiency. Several notable policy implications can be drawn from the research results.

JEL Codes: D22, L60, Q48

This study explores the role of employment protection legislation (EPL) in wage determination using a state-level panel dataset for India’s formal manufacturing sector. Unlike previous studies, we create a quantitative indicator of EPL using state-wise court judgements (on labour disputes), citing various sections of Chapters 5A and 5B of the Industrial Disputes Act, 1947, particularly those dealing with employment and wage-related legislations. Our findings suggest that pro-worker court judgements specifically on wage-related issues lead to an increase in the share of wages in industrial output. The findings are robust to alternative model specifications. However, we find that the share of wages responds negatively to an increase in pro-worker strictness in the overall EPL. We also analyse the consequences of labour market dualism, which is increasingly becoming a norm even in formal sectors. Using insights from labour market segmentation theory, we argue that a divergence in the regulation between regular and contract labour has a potential to undermine the success of active labour market policies in curbing the ill-effects of market segmentation.

JEL Codes: J21, K31

Amidst output moderation, rising deficits and increasing debt, India’s macro-fiscal arithmetic witnesses severe strain and often invites downward rating pressures by sovereign rating agencies. The article aims to examine India’s fiscal sustainability during the past four decades employing time series integration and cointegration techniques, with structural breaks in a sequential schematic framework under intertemporal government budget constraints. It examines stationarity with exogenous and endogenous structure breakpoint(s) at the level and slope for government revenue and expenditure data-generating process following Narayan and Popp (2010), Lee and Strazicich (2003), Zivot and Andrews (1992) and Perron (1989). Furthermore, the cointegration vectors of these fiscal variables in Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS) and a generic cointegration framework following Gregory and Hansen (1996) with structural shifts confirm the sustainability of India’s fiscal management. However, a less-than-unity estimate of the DOLS cointegrating slope parameter with few exogenous breakpoints signifies a weak form of sustainability and hence emphasises a credible commitment to fiscal consolidation going forward for India.

JEL Codes: C32, H50, E62, H62

The primary purpose of this study is to examine the impact of free trade agreements on trade volume and terms of trade between Pakistan and China. It examines the effect of the Pakistan–China Free Trade Agreement (PCFTA) on sector-wise trade welfare for both countries. Using the model of Lloyd and Maclaren, this study has quantified the trade welfare effect for both countries through trade volume, intra-union terms of trade and extra-union terms of trade in the context of PCFTA. The study concludes that the trade welfare increases for China and decreases for Pakistan after the complete execution of PCFTA. Also, there has been a trade creation for China and trade diversion for Pakistan by the PCFTA.

JEL Codes: F15, F10, F13, I30, F60, F02

Despite the significant role of model or demonstrator farmers in disseminating new technologies, systematic and empirical examination of the behavioural characteristics that distinguish demonstrator farmers from other farmers is lacking. Understanding the characteristics of demonstrator farmers is as important as the characteristics of the technology or practice being demonstrated in model farms. Thus, this article examines whether attitudes to risks distinguish demonstrators from non-demonstrator farmers. The results show that a larger proportion of demonstrator farmers will take risks as compared to non-demonstrators. The results also indicate that being less risk-averse increases the chances of being a demonstrator farmer. The implication is that while demonstrators tolerate the risks that accompany adopting technologies, the reverse could be the case for non-demonstrator farmers. Crucially, this finding will inform the decision-making of extension agents when choosing demonstrator farmers. This article will also serve as evidence for future programmes not to rely wholly on demonstrator farmers as the decisively indicative test of farmers’ overall risk attitude.

JEL Codes: D81, C9, Q12