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AbstractThe literature reports mixed findings on the role of government intervention, even during times of crisis. The recent Covid‐19 pandemic damaged the financial health of many small firms. This study examines whether government subsidies are associated with bankruptcy rates for firms with deteriorating financial health. Using a sample of 18,422 firms from 44 countries, we estimate a logistic model that accounts for rare events. Results indicate that those firms which receive government support are more likely to be associated with insolvency, even in the absence of liquidity issues and overdue financial obligations. Policy implications are discussed.

PurposeThis study examines the interconnected effects of formal, informal, environmental and skill-based institutional barriers on firm performance. The Economic Community of West African States (ECOWAS) region has implemented various reforms and policy initiatives to support small businesses yet are unsuccessful as formal institutional framework and governance remains a challenge.Design/methodology/approachThe authors employ a sample of 3,515 small and medium enterprises (SMEs) from the ECOWAS and a two-stage instrumental variable approach to control for endogeneity. Additionally, the authors check for robustness using various measures of firm performance such as profitability, productivity and export intensity.FindingsThe authors confirm that formal institutions are insignificant for firm profitability and productivity, whilst reducing informal, environmental and skill-based institutional barriers are associated with firm performance. However, when barriers to informal, environmental and skill-based institutions are at the lowest, formal institutions are associated with firm performance.Research limitations/implicationsThe major limitation lies in the policy implications. Informal institutions come into play when formal institutions are weak. However, informal practices must be addressed in the form of formal enforcement. This leads to a conundrum.Practical implicationsPolicymakers should continue to market-supporting institutions and a conducive business environment to complement the formal institutional framework.Originality/valueThis study provides new empirical evidence on how institutional quality affects firm performance by examining whether other institutional factors, such as the informal, environmental and skill-based institutional barriers, can moderate this effect.

Purpose
This study aims to examine whether diversified economies enhance the growth benefits from foreign direct investment (FDI). Diversified economies benefit from stable export earnings, stable investment composition and greater factor endowments through forward and backward linkages that can leverage superior foreign technology embedded in FDI. This is crucial as many African economies suffer from dependency while FDI is concentrated in the primary sector.


Design/methodology/approach
The authors use a dataset of 15 Economic Community of West African States from 1995 to 2020 and compile variables from various sources, including an export diversification index measured using the Herfindahl–Hirschman index of product concentration. The authors use a growth regression model estimated using dynamic panel estimators to control for endogeneity and simultaneity issues.


Findings
The results show that the effects of direct FDI are insignificant to growth considering diversification and controlling for other confounding factors. Meanwhile, diversification is associated with growth, which highlights the importance of industrial policy. More importantly, the authors find that the marginal effects of FDI are positively and significantly associated with growth when diversification levels are low, implying that production structure matters for the FDI–growth nexus in developing economies.


Originality/value
Previous studies have overlooked the role of export production structure on the FDI–growth nexus. Many developing economies are dependent on primary exports and suffer from dependency, which implies lower levels of factor endowments. As such, this reduces the growth gains from FDI. The authors provide new empirical evidence on the importance of export production structure on the FDI–growth nexus.

PurposeThis study examines whether institutional quality affects the relationship between income inequality and entrepreneurial activity. The authors specifically examine whether the greasing or sanding effect holds for the relationship between income inequality and entrepreneurship, while moderating for institutional quality. The greasing effects suggest that income inequality can promote entrepreneurial activity, while the sanding effects disincentivise it.Design/methodology/approachThe authors examine this relationship using a sample of 100 advanced and developing countries from 2006 to 2018 using a dynamic panel estimator to control endogeneity and simultaneity. Additionally, the authors include an interaction term to estimate the marginal effects of income inequality, while moderating for institutional quality. Furthermore, the authors differentiate between six measures of institutional quality.FindingsOverall, the authors find that institutional quality and income inequality have a positive and significant impact on entrepreneurial activity. However, when moderating for institutional quality, the findings show that the marginal impact of income inequality is negative for countries with low levels of institutional quality. The authors show that the rule of law and government effectiveness are effective moderators in terms of magnitude. Furthermore, the authors find that the sanding effect of income inequality is observed in developing economies, even when moderating for institutional quality.Research limitations/implicationsThe major limitation lies in the estimation of entrepreneurial activity, which is measured using new business formation. While this is commonly used, it focuses on formal entrepreneurial activities and overlooks the informal economy.Originality/valueThis study provides new empirical evidence on whether institutional quality can moderate and explain the puzzling link between entrepreneurial activity and income inequality.

PurposeThis study examines whether unemployment affects the relationship between income inequality and food security in 143 advanced and developing economies from 2000 to 2019. The authors specifically explore whether unemployment can weaken the negative impact of income inequality on food security.Design/methodology/approachThe authors estimate a new and robust index of food security using a generalized least squares approach. The authors then employ the system generalized method of moments to estimate the model as it allows the authors to control for endogeneity and simultaneity. The authors estimate an interaction term to account for the moderating impact of unemployment.FindingsThe authors consistently find that income inequality has a negative and significant association with food security. However, the results differ between advance and developing economies. The authors find that unemployment rates have a negative relationship with food security in the sample of developing countries, where high levels of unemployment exacerbate the adverse effects of income inequality on food security. This is insignificant for advanced economies.Research limitations/implicationsThe major limitation lies in the use of aggregated data, which overlooks the issue of food security at the household or individual level.Practical implicationsPolicymakers in developing economies can ensure job security in order to lessen the adverse effects of income inequality on food security.Originality/valueThis study provides new empirical evidence on whether unemployment can potentially moderate and alleviate the impact of income inequality in advanced and developing economies.

AbstractA number of governmental and nongovernmental organizations have made significant efforts to encourage the development of artificial intelligence in line with a series of aspirational concepts such as transparency, interpretability, explainability, and accountability. The difficulty at present, however, is that these concepts exist at a fairly abstract level, whereas in order for them to have the tangible effects desired they need to become more concrete and specific. This article undertakes precisely this process of concretisation, mapping how the different concepts interrelate and what in particular they each require in order to move from being high-level aspirations to detailed and enforceable requirements. We argue that the key concept in this process is accountability, since unless an entity can be held accountable for compliance with the other concepts, and indeed more generally, those concepts cannot do the work required of them. There is a variety of taxonomies of accountability in the literature. However, at the core of each account appears to be a sense of "answerability"; a need to explain or to give an account. It is this ability to call an entity to account which provides the impetus for each of the other concepts and helps us to understand what they must each require.

With the recent wave of progress in artificial intelligence (AI) has come a growing awareness of the large-scale impacts of AI systems, and recognition that existing regulations and norms in industry and academia are insufficient to ensure responsible AI development. In order for AI developers to earn trust from system users, customers, civil society, governments, and other stakeholders that they are building AI responsibly, they will need to make verifiable claims to which they can be held accountable. Those outside of a given organization also need effective means of scrutinizing such claims. This report suggests various steps that different stakeholders can take to improve the verifiability of claims made about AI systems and their associated development processes, with a focus on providing evidence about the safety, security, fairness, and privacy protection of AI systems. We analyze ten mechanisms for this purpose--spanning institutions, software, and hardware--and make recommendations aimed at implementing, exploring, or improving those mechanisms.