Economic Journal of Development Issues 2024-03-27T09:53:20+00:00 Associate Prof. Raghu Bir Bista, PhD Open Journal Systems <p>A publication of the Department of Economics, Patan Multiple Campus, Tribhuvan University, Kathmandu, Nepal.</p> COVID-19 Effect on Tourism: Measuring Guest Behavior towards Hotel Industry Using Ordered Logistic Regression 2024-03-19T03:07:14+00:00 Rupesh Aryal Anup K.C. Udaya Raj Paudel Sushanta Kumar Mahapatra Ghanashyam Khanal Kolin Kiran Shrestha Devi Kumari <p>The global COVID-19 pandemic significantly impacted the Nepalese hotel industry due to government-imposed lockdowns and travel restrictions. This led to decreased earnings, higher unemployment, and a noticeable shift in guest behavior. In this context, the study analyzes the impact of COVID-19 on guest behavior towards the hotel industry in the Kathmandu Valley. This study utilizes an explanatory research design and gathers data from 260 participants through structured questionnaires, administered with the assistance of the KOBO Toolbox within the Kathmandu Valley. Inferential analysis was conducted using an ordered logistic model. The findings indicate that the pandemic has indeed had an impact on guest behavior within the hotel industry. Additionally, factors such as gender, education level, profession, reference group, security, attitude, and beliefs play a significant role in shaping guest behavior toward the hotel industry. We also find that most individuals visit hotels for personal reasons, and guests generally have a moderate level of awareness regarding COVID-19. In conclusion, hotels should enhance their services and maintain a hygienic environment to address these issues. In this regard, this study will benefit researchers, the hotel industry, the travel and tourism sector, policymakers, marketing agencies, and more.</p> 2024-03-27T00:00:00+00:00 Copyright (c) 2024 Measuring the Effects of Entrepreneurial Orientation on Social Media Adoption and SME’s Performance in Kathmandu Valley: Evidence from Structural Equation Modeling Using Smart PLS 4.0 2024-03-19T03:23:45+00:00 Rubi Maharjan Ranjana Kumari Danuwar Mijala Kayestha Ajaya Dhakal Deep Kumar Baral Alish Rajopadhyaya Amita Koirala Dhurba Prasad Timalsina <p>Social media platforms have become crucial for Small and Medium Enterprises (SMEs) to enhance their online presence and engagement in the contemporary digital media landscape. The study highlights the significance of entrepreneurial orientation in utilizing social media for SME growth and performance, especially in the face of challenges like digital literacy and infrastructure gaps. Furthermore, the study outlines its structure and aims to establish a link between entrepreneurial orientation, social media adoption, and SME performance, offering insights to guide future initiatives. Structural Equation Modeling (SEM) using Partial Least Squares (PLS) was utilized to test four hypotheses among 280 respondents to analyze the connections and causal relationships between the effect of entrepreneurial orientation on social media adoption and SME performance. The findings reveal that a lack of knowledge and skills, limited resources for investing in social media, and privacy and security concerns are significant challenges to adopting social media. SEM results indicate a significant relationship between entrepreneurial orientation (β= 0.264, P&lt;0.01) and social media (β= 0.150, P &lt; 0.05) in SME performance (β = 0.281, P&lt;0.05), whereas innovation capability shows an insignificant relationship (β = 0.002, P &gt; 0.05). Respondents also opined that staying updated with the latest trends and collaborating with influencers and digital marketing experts are some managerial solutions to mitigate the challenges. Challenges like knowledge gaps and resource limitations affecting adoption were identified as significant hindrances, while effective social media integration was identified as a performance-impacting factor. Staying updated and collaborating with digital marketing experts are vital for overcoming obstacles and thriving in the evolving Nepali economy through SMEs.</p> 2024-03-27T00:00:00+00:00 Copyright (c) 2024 The COVID-19 Pandemic Impact on the Remittances and Major Economic Factors of Nepal: A Retrospective Assessment 2024-03-19T03:43:02+00:00 Ram Kumar Phuyal Madhusudan Bhattarai Yadu Nath Acharya <p>The COVID-19 epidemic has had a significant impact on Nepal, primarily due to the closure of businesses in key migrant labor destinations such as the Gulf countries, Malaysia, and South Korea. Remittances account for 26% of Nepal's GDP, but they have dropped significantly since COVID-19. This study examines the impact of a negative shock to remittances on macroeconomic variables and makes policy recommendations. The analysis finds that a drop in remittances correlates with slower growth in consumption (2.5%) and foreign exchange reserves (17.7%) over a 20-year period, using both quantitative and qualitative data. The result shows that the Nepalese migrant crisis, exacerbated by the economic downturn in destination countries, has led to a substantial decline in remittance inflows, causing a 15.33% monthly decrease. This poses a threat to Nepal's economy, affecting consumption, GDP growth, and key macroeconomic variables. The results thus emphasize the importance of immediate relief and bolstering economic recovery initiatives by investigating potential outcomes of the pandemic's impact on key economic indicators.</p> 2024-03-27T00:00:00+00:00 Copyright (c) 2024 Data Don’t Lie: A Comparative Study of Nepal’s Development under Absolute Monarchy and Post-Monarchy Democratic Era 2024-03-19T03:50:05+00:00 Manoj Kumar Yadav Devid Kumar Basyal Indra Prasad Bhusal Chad David Anderson <p>A widespread perception among the Nepalese people is that Nepal was in a better position in terms of development during the party-less Panchayat political system under the absolute monarchy from 1960 to 1990 than in the post-Panchayat democratic period after 1990. This article presents a comparative study of major development indexes during the Panchayat and post-Panchayat periods and aims to clarify the origins and reality of this perception. Data were obtained and analyzed using secondary global sources such as UNICEF, UNFPA, UNESCO, Education Statistics, World Bank, etc. Further comparison is made with corresponding Indian indexes for a better assessment of development after the emergence of globalization. The comparison shows that, contrary to the common perception, Nepal is in a much better development position in most of the indexes in the post-Panchayat democratic period.</p> 2024-03-27T00:00:00+00:00 Copyright (c) 2024 Department of Economics, Patan Multiple Campus, Tribhuvan University Impact of Domestic and Foreign Capital on Economic Growth and Employment: Empirical Analysis of 43 Lower Middle-income Economies 2024-03-19T04:00:23+00:00 Sudan Kumar Oli <p>The purpose of this paper is to investigate the impact of domestic and foreign capital inflows on economic growth and employment in lower-middle-income countries (LMICs). To analyze the impact of domestic and foreign capital on economic growth and employment, this study used panel data from 43 LMICs spanning the period 1990 to 2021. The study employed the Panel Ordinary Least Squares (POLS) estimation method for the baseline regression analysis. However, the Breusch-Pagan test suggested that the estimation model is not suitable for GDP per capita growth (GDPPCG) under POLS estimation. Thus, the Generalized Least Squares (GLS) procedure has been employed to examine the impact of domestic and foreign capital on economic growth. After the Hausman specification test, we used a random-effect estimation procedure for the conclusion of the impact analysis under panel data analysis techniques. This study concludes that there is a positive impact of both domestic and foreign capital on economic growth in LMICs. However, only foreign capital inflow has a significantly positive impact on employment. The impact of domestic and foreign capital inflows on economic growth and employment differs significantly. Therefore, this study advises that, for LMICs, domestic capital is more important for growth and employment.</p> 2024-03-27T00:00:00+00:00 Copyright (c) 2024 Cross-influence of Risk, Return, and Governance on Decision-Making in Hydropower Investments 2024-03-19T04:05:04+00:00 Dipendra Karki <p>The sustainable growth of an economy pivots on a robust financial system, particularly in the context of capital availability. This study analyzes the behavior of investors towards initial public offerings (IPOs), focusing on the hydropower development sector in Nepal. The research explores the multifaceted relationship between factors such as risk, return, and governance on investor behavior, considering elements like Idiosyncratic risk (IR), timing of issue (TIPO), Bandwagon effect (BE), expected return (ER), sectoral performance (SP), corporate governance (CG), pre-issue financial health (PFH), and marketability (MKT). Additionally, sociodemographic variables and their connection to investor behavior are examined. Employing a descriptive research design, the study involves a sample size of 392 individuals, selected through a convenient sampling method. The study's main finding documented that idiosyncratic risks, expected returns, and corporate governance stand out as crucial factors influencing investment decisions (P &lt; 0.05). Notably, the regression analysis indicated the absence of a significant impact from market risks (P &gt; 0.05), including the bandwagon effect and IPO timing, on investor behavior towards hydropower IPOs. This finding suggests that Nepalese investors prioritize returns and organizational governance over market risks, despite having significant concerns regarding idiosyncratic risk. The analysis also reveals significant associations between investor behavior and sociodemographic variables like age, education, occupation, and primary investment objectives (P &lt; 0.05). This study offers valuable insights and implications for investors seeking to align investments with their goals. Hydropower developers should prioritize investor protection and transparency, while regulators must enhance disclosures, shareholder accountability, and project oversight.</p> 2024-03-27T00:00:00+00:00 Copyright (c) 2024 Assessing Water Deficit Induced Water Stress of Households and their Welfare in Small Cities of Nepal 2024-03-19T04:09:32+00:00 Raghu Bir Bista Sudeep Thakuri Prakirti Koirala Arun Bhattarai <p>This study investigates water deficit-induced stress in 12 small cities within Nepal's Marshyangadi River Basin, crucial for sustainable water management amid global water scarcity concerns. Employing the Milankovitch Theory, it explores Earth-Sun relationships and their impact on long-term climate changes, shaping societal adaptation strategies. Utilizing the Water Deficit Model, the study unveils the multifaceted consequences of water scarcity of Gandaki Province's Marshyangdi River basin. The study employs a comprehensive design, sampling 317 households across diverse ecological zones and elevations. The study finds the existing month-long water deficit in these cities to the higher water demand of households, along with water stress in the cities of Himal and Terai more than in the Hill. Water deficit is higher in Himal than in Hill and Terai because of lower water availability in Himal (below average 0.9). The people of Himal and Terai have extremely high stress but the people of Hills are comfortable without stress, except in Bandipur for drinking and cleanliness. In the 20 litres per capita per day water, water stress is found mixed. Five small cities in Himal and Terai are extremely stressed, meanwhile, 7 small cities in the Hill are not stressed, except two cities, Bandipur and Marshangdi. Relatively, the water deficit in the Hill is less than Himal and Terai. Similarly, in 20 liters per capita per day water, it is good for households but most cities have extreme water stress. The Hill’s water stress is lower than that of the Himalayan and Terai. By WHO’s standard (50 liters-100 liters per day per capita), all cities are extremely water deficient and critically water stressed. The findings reveal a direct correlation between water deficit and stress, impacting survival, hygiene, and living standards. The study concludes that despite ample water resources, poor governance and inadequate policies contribute to extreme water deficit, challenging SDG targets and living standards. It urges urgent action, accountability, budgeting, and a comprehensive plan for water poverty reduction.</p> 2024-03-27T00:00:00+00:00 Copyright (c) 2024