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PurposeMomentum returns are considered an anomaly in the finance literature as their existence cannot be fully explained under the asset pricing paradigm. This study attempts to shed more light on this anomaly by investigating the determinants of momentum returns.Design/methodology/approachThe panel data technique is applied to the sample of 40 countries worldwide from 1996 to 2018. The authors use the panel-corrected standard error (PCSE) model to estimate the coefficient of World Governance Indicators (WGI), whereas the fixed effect model is used to determine the coefficient for corporate governance indicators (CGIs). The choice of PCSE estimation methods is guided by the fact that WGI variables are subjected to serial correlation, heteroskedasticity and cross-sectional dependence problems while CGI variables are not. Furthermore, a composite WGI index is constructed using principal component analysis (PCA).FindingsRegression analysis shows a negative and significant relationship between WGI index and momentum returns. The negative coefficient value of WGI supports the prediction of the overreaction hypothesis, which postulates a lower behavioral bias in the market with high governance quality. Breaking down of the WGI by their six indicators reveals that four of the indicators (control over corruption, government effectiveness, stability and avoidance of violence) are negative statistically significant with momentum returns while two indicators are not significant. As for CGIs, only one (strength of investor protection) of the four tested indicators is negative and significantly related to momentum returns.Originality/valueThe study fills the gap in economic literature by highlighting the association between governance quality at the country (WGI) and firm level (CGI) on stock momentum returns.

Cloud computing is widely recognised as a key technology that enables digitalisation, fuelling the digital economy growth. Using World Bank Governance Indicators, in this paper we examine how country’s quality of governance (or good governance) impacts the use of cloud computing in the enterprises in the EU, hence affects digitalisation of the EU. In an empirical examination of 27 EU countries over a period from 2014 to 2021, it was found that good governance positively affects cloud computing adoption in the EU enterprises. In support of the institutional theory, we show that the improving country’s governance quality is an important step in accelerating cloud computing adoption by the EU enterprises, the finding providing an important input to the EU government in their execution of the Industrial Strategy 2030, in which digitalisation and cloud computing adoption play an important role. Businesses operating in the EU countries with higher quality of governance are more likely to implement cloud computing in their operations, a cost and performance benefiting technology, a valuable insight to the EU enterprises, which gain direct benefits from increased cloud computing adoption in their businesses.

The aim of this article is to examine the relationship between stock market performance and country level governance indicators. A good quality of governance in a country ensures effective implementation of laws which can protect the investor and improve stock market performance and vice versa. Our study utilises annual stock returns and country level governance indicators for 25 developed countries from 1996 to 2018. The fixed effect estimation suggests that stock market performance and governance indicators share a positive relationship. Our findings suggest that high quality of governance is associated with higher returns on stock. Institutional quality is a preconditioned for financial developed that set the direction of change to reduce transaction costs and agency costs and make profitable projects available to firms that subsequently leads to higher demand for equity financing. These findings have significant implications for stock market policymakers and standard asset pricing models that only include market risk factors to predict future expected stock returns.

This research comprehensively addresses the complexity of the Multidimensional Poverty Index (MPI). The research objective is to understand the moderating effect of the MPI on the relationship between Sustainable Governance Indicators (SGIs) and World Governance Indicators (WGIs) in the context of 41 countries belonging to the Organization for Economic Cooperation and Development (OECD) while also analyzing the validity and reliability of the indicators. The applied methodology involves using Structural Equation Modeling with Partial Least Squares (SEM-PLS), and data from 41 OECD countries were analyzed. Data on SGIs, WGIs, and the MPI were extracted from the SGI-2022, WGI-2022, and SGI-MPI (2022) databases. Moderating the interaction between the MPI and SGIs reveals a significant overall negative effect (−0.184) on the relationship between SGIs and WGIs (total effect = 0.474); this implies that elevated levels of the MPI negatively impact sustainable governance between SGIs and WGIs, whereas lower levels of the MPI lead to a stronger relationship between SGIs and WGIs, enhancing sustainable governance. The validity of the structural model is affected by low Average Variance Extraction (AVE) in key variables, such as Economic Policy-EP (0.470) and MPI (0.439), indicating potential limitations in their measurement.

PurposeThe main objective of this article is to analyze the role of governance quality in influencing the economic growth of 22 selected Sub-Saharan African Countries.Design/methodology/approachThe study applied the panel dynamic Generalized Method of Moments (GMM) to analyze the data obtained from the World Bank database over the period from 2002 to 2020.FindingsThe overall finding indicated that the composite governance index has a positive significant effect on the economic growth of the countries; where a unit improvement in the aggregate governance index leads to a 3.05% increase in GDP. The disaggregated result has shown that corruption control and government effectiveness have a negative significant effect on growth performance, whereas, the rule of law and regulatory quality showed a positive significant effect. Political stability and voice and accountability have an insignificant effect on economic growth.Research limitations/implicationsDue to data limitations, this study could not address the whole members of Sub Sahara African Countries and could not see the causal relationship.Practical implicationsThe study suggested a strong commitment to the implementation of policy and reform measures on all governance factors. This may add to the need to devise participatory corruption control mechanisms; to closely look at the proper implementation of policies and reforms that constitute the government effectiveness factors, and properly implement the rule of law at all levels of the government with a strong commitment to realizing it so that citizens at all levels can have full confidence in and abide by the rules of society.Originality/valueEven though there are some studies conducted using conventional methods of panel data analysis such as random effect or fixed effects, this empirical study used more advanced panel dynamic generalized moment of methods to examine the role of improvement in governance quality on economic growth.

Strong governance is vital for developing environmental policies to promote renewable energy consumption and discourage nonrenewable energy sources. The present research explores the effect of economic growth and different governance indicators on renewable and nonrenewable energy consumption in Pakistan, India, Bangladesh, and Sri Lanka using data from 1996 to 2019. For this purpose, the study uses different econometric techniques to find the long-term effects of the rule of law, regulatory quality, corruption control, government effectiveness, political stability, voice and accountability, and economic growth on oil, natural gas, coal, hydroelectricity, and renewable energy consumption. The results show that economic growth has a positive impact on all investigated renewable and nonrenewable energy sources. Additionally, regulatory quality measures also increase all types of renewable and nonrenewable energy consumption. Except for natural gas, the impact of the rule of law is negative, and government effectiveness positively affects all energy sources. Control of corruption has a positive effect on natural gas consumption. Political stability has a negative effect on nonrenewable energy sources and a positive impact on renewable energy sources. The magnitudes of the effects of economic growth and most governance indicators are found to be larger on nonrenewable sources than renewable sources. The testing of the energy consumption and governance nexus is scant in global literature and is missing in South Asian literature. Hence, the study results contribute to how South Asian economies can be more sustainable in energy use by enhancing governance indicators in the economies. Particularly, the results imply that these countries should focus on improving the rule of law, corruption control, governance, regulatory quality, political stability, and economic growth to help maintain a sustainable balance of renewable and nonrenewable energy sources. Moreover, this issue needs further attention in developing countries, as governance indicators would play an effective role in promoting sustainable energy.

In each country, the occurrence of energy poverty among resident households is usually related to low income and its unequal distribution. Like other manifestations of material deprivation, however, such a phenomenon is likely to be also correlated with some internal socio-political factors that allow its persistence by preventing effective solutions. In this paper, we build and analyse a dataset for European countries by assessing the role of the perceived quality of internal public governance on different measures of energy deprivation. Specifically, we rely on the Worldwide Governance Indicators provided by the World Bank and estimate an array of panel models. After controlling for income, income inequality, energy prices, and weather conditions, we find that high government effectiveness, good regulatory quality, widespread property rights, contract enforcement, and corruption control are significantly associated with lower energy poverty. In addition, we consider the policy implications of this broader perspective on energy deprivation.

Economic and institutional factors influence foreign direct investment (FDI) inflows. To address limitations in previous regional research, this study uses a balanced panel dataset spanning 19 years across all ten ASEAN member states. Employing a panel EGLS (cross-sectional SUR) methodology, we evaluate all six Worldwide Governance Indicators (WGI), both aggregated and disaggregated, alongside five macroeconomic controls: economic growth, exchange rate, financial development, unemployment, and human development. Results indicate that while aggregate governance significantly influences FDI, individual WGI dimensions are heterogeneous. Specifically, voice and accountability, rule of law, and control of corruption consistently exert positive effects, whereas other dimensions are inconsistent or unexpectedly negative. All control variables remain significant, aligning with theoretical frameworks. This study contributes through its full regional coverage and detailed analysis of governance dimensions, providing a clearer understanding of investment behaviors. The findings offer important policy implications: achieving sustainable economic growth via FDI requires targeted improvements in specific governance dimensions rather than broad institutional changes.

The theory and practice of adaptive management and adaptive governance have been widely studied in the complex social contexts that mediate how humans interact with ecosystems. Adaptive governance is thought to enable adaptive management in such contexts. In this study, we examine four often-used principles of adaptive governance (polycentric institutions, collaboration, social learning and complexity thinking) to develop a framework for reflecting on adaptive governance of a social-ecological system—the Knysna Estuary in South Africa. This estuary is a priority for biodiversity conservation, as well as a common-pool resource central to livelihoods. We used the framework to structure dialogue on the extent to which the four principles of adaptive governance were being applied in the management of the Knysna Estuary. The dialogue included diverse stakeholders, from those who have the power to influence adaptive management to those most dependent on the resource for their livelihoods. Based on a combination of theory and current reality we then identified eight indicators that could be used to guide a transition towards improved adaptive governance of the estuary. These indicators were assessed and supported by most stakeholders. The main contributions of our research are (a) a process for combining theory and stakeholder dialogue to reflect on adaptive governance of a social-ecological system; (b) a set of indicators or conditions that emerged from our participatory process that can be used for reflexive monitoring and adaptation of adaptive governance of Knysna Estuary; and (c) a real-world example of seeking complementary links between adaptive governance and adaptive management to promote effective management of complex social-ecological systems.

Worldwide, 844 million people still lack access to basic drinking water, especially in the rural areas of low and middle income countries. However, considerable progress has been made in recent years due to work on the Millennium Development Goals and Sustainable Development Goals. Nevertheless, countries’ national characteristics have often impacted on this progress. This paper analyzes whether specific socioeconomic factors affect access to improved water sources in the rural areas of developing countries. In particular, we analyze access to ‘total improved’, piped on premises, as well as other improved sources of access in rural areas for low income, low-middle income, and high-middle income countries. Our results suggest that gross national income (GNI); female primary completion rate; agriculture; growth of rural population; and governance indicators, such as political stability, control of corruption, or regulatory quality are variables related to water access, although specific associations depend on the source of water and income group examined. Understanding these interrelations could be of great importance for decision makers in the water sector as well as for future research on this topic.