Dynamic Relationship Between China’s Environmental Protection Investment and Regional, Environmental Pollution

The carrying capacity of China’s resources and environment has reached a limit. The economic development of different regions has been forced to abandon the original economic development mode manifesting high pollution, high energy consumption, and high emission and to step forward to the new economic development model promoting low energy consumption, low emission, and low pollution. Environmental issues are typical manifestations of market mechanism failure. Government investment in environmental protection, which effectively improves environmental quality, is necessary to achieve sustainable economic development. An index system of the influencing factors that affect regional environmental pollutant emissions was established first in this study to measure accurately the relationship between environmental protection investment in different provinces in China and regional environmental pollution. System GMM (Generalized Method of Moment) method was used to analyze the impact of environmental protection investment on pollutant emissions in 30 provinces in China from 2007 to 2016. Results show that the system GMM method can effectively solve variable endogeneity. Environmental protection investment of explanatory variables has a significant negative effect on pollutant emissions. Among the control variables, per capita GDP (Gross Domestic Product), industrial structure, resident consumption level, and technology market turnover have a significant inhibitory effect on pollutant emissions. Among the control variables, investment in fixed assets and import and export trade is vital in promoting pollutant emission growth. Conclusions provide a reference for improving the governance level of environmental protection investment in China’s provinces, controlling environmental pollution and ecological damage, and realizing a green economic development method.

Tác động phi tuyến bậc 3 của cấu trúc sở hữu nhà quản lý đến hiệu quả kinh doanh của doanh nghiệp niêm yết tại sở giao dịch chứng khoán Thành phố Hồ Chí Minh

Bài viết nghiên cứu tác động của cấu trúc sở hữu nhà quản lý đến hiệu quả kinh doanh của doanh nghiệp niêm yết tại Sở giao dịch chứng khoán Thành phố Hồ Chí Minh. Hiệu quả kinh doanh được đo lường bằng tỷ suất sinh lời trên vốn chủ sở hữu và Tobin’s Q. Nghiên cứu sử dụng dữ liệu bảng cân bằng của 332 công ty từ năm 2007 đến năm 2019 và phương pháp hồi quy System-GMM. Kết quả cho thấy tác động phi tuyến bậc ba giữa cấu trúc sở hữu nhà quản lý đến hiệu quả kinh doanh, hàm ý rằng giả thuyết hội tụ lợi ích và tham quyền cố vị trong hành vi của các nhà quản lý đã dẫn đến mối quan hệ phi tuyến bậc ba của cấu trúc sở hữu nhà quản lý đến hiệu quả kinh doanh của doanh nghiệp. Ngoài ra, nghiên cứu cũng đưa ra khuyến nghị nhằm tối ưu hóa hiệu quả kinh doanh của doanh nghiệp và lợi ích của các bên liên quan.

EMPIRICAL ANALYSIS OF CAPITAL, FUNDING LIQUIDITY AND BANK LENDING IN EMERGING MARKET ECONOMIES: AN APPLICATION OF SYSTEM GMM APPROACH

Funding Liquidity is the key component of loanable funds of the bank. Sufficient liquidity also boosts banks’ ability to pay-off its dues timely but at the same time it has been proven to be a significant determinant of various historical banking sector crises all over the world. However, there exists very weak empirical evidence suggesting a clear relationship between funding liquidity and bank lending growth (BLG). We have attempted to address this gap by empirically testing the impact of bank capital, funding liquidity and their interaction variable on the BLG using a dataset of 59 commercial banks operating in India for the period 2006 to 2018 consisting of 21 public sector banks, 18 private sector banks and 20 foreign banks. An attempt has been made to examine the interactive impact of the bank capital and funding liquidity ratio on BLG rate using system GMM approach. Our model reveals a positive and significant impact of capital funding, indicating induction of capital in bank leads to higher growth in BLG rate. The results also suggest that the interaction impact of funding liquidity and bank capital on the bank lending growth is significantly negative. Further, a higher capital induction neutralises the overall impact of funding liquidity on the bank lending growth. The study provides implications for academicians and policy makers to comprehend the role of funding liquidity.

The impact of agricultural producer price on sustainable food security in Africa – a system GMM approach

Purpose. Given the efforts towards achieving the United Nations’ Sustainable Development Goals (SDGs) for food security by 2030, this study investigates the moderating impact of public investments in agriculture on the agricultural producer price – agricultural sustainability nexus in 40 African countries covering the period from 2000 till 2019. Methodology / approach. In this study we used multiple regression techniques to explore a dynamic panel data model based on the one-step system Generalized Method of Moments (System-GMM). Proposed by Arellano and Bover and further developed by Blundell and Bond, the System-GMM estimator was preferred over other techniques because of its efficiency in eliminating the simultaneous biases that are associated with regression model estimations. Specifically, the one-step System-GMM was preferred over the two-step System-GMM for our estimation due to the efficiency of its optimal weighting matrices. Results. The study discovered that although the interactions between public investments on agriculture and agricultural sustainability amplify the positive impact of a set of explanatory variables on agricultural producer price to an extent, the impact on food security in Africa is insignificant. The study also discovers that the net effects of a set of interactive terms on producer price in the developing countries in Africa are slightly lower than in the least-developed countries. The weighted average food security index for the period under study was abysmal 44.54%, indicating moderate food insecurity in Africa. Originality / scientific novelty. In the context of food security literature in Africa, this study is the first attempt at exploring the agricultural producer price – agricultural sustainability nexus based on the moderating impact of public investments on agriculture with the Global Food Security Index (GFSI), a composite food security model developed by the Economist Intelligence Unit (EIU). Among our study proposals it is a call for a detour from the current agricultural investment and producer price policies especially the current ‘one-size-fits-all’ regional frameworks which have proved to be less progressive and less transformative to more robust country/sector-specific frameworks that have the potential to better the fortunes of agriculture and improve food security. Practical value / implications. The current state of agricultural producer price in most African countries is ample proof that the role and importance of the producer price have been gravely diminished. Despite governments’ efforts towards improving food security, the evidence as presented in this study supports the fact that those efforts have not achieved much success. The study, which contains a number of recommendations, highlights agricultural producer price as a potentially important driver of agricultural sustainability and sustainable food security in Africa.

Islamic finance and economic growth nexus: an empirical evidence from Southeast Asia using dynamic panel one-step system GMM analysis

Purpose This paper aims to empirically explore the nexus between Islamic finance and economic growth across Southeast Asia based on the perception of the endogenous growth model. Design/methodology/approach This paper applied the dynamic panel one-step system GMM as an optimum estimation approach to study the influence of Islamic finance on economic growth in Southeast Asia from 2013Q4 to 2019Q4. This paper used total Islamic financing as the major exogenous explanatory factor inside the endogenous growth model, whereas the gross domestic product was used as the measurement of economic growth. The sample consisted of all complete Islamic banks operating in Southeast Asia (Malaysia, Brunei Darussalam and Indonesia). Findings The findings demonstrated that Islamic finance is promoting economic growth in Southeast Asia, which reflects the weighty role of Islamic finance as an energetic contributor to economic growth. Practical implications This paper would enrich the literature by studying the nexus between Islamic finance and economic growth in Southeast Asia based on the perception of endogenous growth model, as the results of this paper assist as an attendant for financial scholars, decision-makers and policymakers to expand Islamic finance globally as an alternative funding source for the best involvement to economic growth. Originality/value Despite the existing studies on the nexus between Islamic finance and economic growth, this paper is the first that explores empirically the nexus between Islamic finance and economic growth in Southeast Asia based on the theoretical background of the endogenous growth model to obtain solid information on this nexus.

The role of institutions in private investment: panel data evidence

Purpose This study aims to examine the effects of institutions on private investment (PI) using panel data analysis, where the sample countries consist of 100 countries around the world and the time period is covering from 2007 to 2016. The system generalized method of moments (GMM) estimator, introduced by Arellano and Bond (1991) and further developed by Blundell and Bond (1998) is used to analyze the data sets. Design/methodology/approach This study uses the panel data approach to estimate the empirical model due to the panel nature of the data. In particular, due to the presence of lagged dependent variables and the ability to capture individual country-specific effects, the system GMM estimator, introduced by Arellano and Bond (1991) and further developed by Blundell and Bond (1998), is adopted to analyze the roles of institutions in PI. The system GMM is developed specifically to solve the problems of weak instruments and persistency (Blundell and Bond, 1998). Jointly, they suggest to adopt additional moment conditions where lagged difference of the dependent variable is orthogonal to the level form of the disturbances. The system GMM estimator is able to combine the moment conditions for the different models, as well as the level model, thereby (is capable of) generate consistent and efficient parameters. Due to the dynamic nature of the data, this study uses one-step and two-step system GMM to investigate the roles of institutions in PI. Findings The empirical results based on the two-step system GMM demonstrate that the quality of institutions plays an important role in stimulating PI. The finding is reinforced by the analysis of the institutional sub-components’ effects on PI. Originality/value This study is unique as its measurement of institutions is multi-dimensional (including law and order, rules and regulation, government stability, bureaucratic quality, control of corruption, socio-economic condition, etc.), and hence are more comprehensive. Second, it is different than the previous studies as its sample of countries includes both democracies and non-democracies, as well as both developed and non-developed economies in which policy implications are widely acceptable. Third, this study contributes to the policymakers especially those in the debt-ridden economies where governments are budget-tightening (limited capacity for public investment), as to which practical direction should be focused on so as to attract PI and eventually sustainable growth can take place.

Dose Remittances Matter for Openness and Financial Stability: Evidence From Least Developed Economies

The study's motivation is to gauge the effects of remittances on openness: financial and economic openness and financial stability in least developed countries (LDCs) for the period spanning 1975–2018. The study applies Generalized Moment of Methods (GMM) and System-GMM to detect the magnitude of remittances, gross capital formation, and government debt on openness and financial stability, and their directional association is established by performing a Granger causality test with System-GMM specification. The results of cross-sectional dependency ascertain the presence of a common dynamic among the research units; on the other hand, both first, and second-generation unit root tests establish that variables are integrated either at level or after the first difference, neither variables are exposed to order of integration after second difference. A panel co-integration test based on error correction confirms the availability of the long-run association among variables. Study findings with GMM and System-GMM estimation expose positive statistically significant effects of remittance inflows to economic and financial openness and financial stability. In LDCs, remittance inflows positively augment economic and financial openness; moreover, financial stability remittances play a critical role. The study implemented the Granger causality test with System-GMM specification, and results disclosed the feedback hypothesis that is bidirectional causality availability in the tested empirical causal model.JEL Classifications: F24, F43, P34.