Revisiting linkages between financial development, trade openness and economic growth in South Africa: fresh evidence from combined cointegration test

This study aims to determine how the influence of financial development on economic growth in Indonesia. Financial development indicators are M2 money supply, bank assets, private credit and trade openness. Where inflation and trade openness as a control variable and economic growth as the dependent variable. The data used in this study are secondary data from 2005 quarter 1 to 2018 quarter 4 which were collected through documentation and related agencies. This study uses multiple linear regression analysis and error correction models. The results of this study indicate that: (1) the money supply M2 has a negative effect on economic growth in Indonesia; (2) Bank assets have a negative effect on economic growth in Indonesia; (3) Private credit has a positive effect on economic growth in Indonesia; (4)) trade openness has a positive effect on economic growth in Indonesia.

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The Impact of Industrialization, Trade Openness, Financial Development, and Energy Consumption on Economic Growth in Indonesia

Economies ◽

10.3390/economies9040174 ◽

2021 ◽

Vol 9 (4) ◽

pp. 174

Author(s):

Khalid Eltayeb Elfaki ◽

Rossanto Dwi Handoyo ◽

Kabiru Hannafi Ibrahim

Keyword(s):

Economic Growth ◽

Energy Consumption ◽

Least Squares ◽

Financial Development ◽

Correction Term ◽

Trade Openness ◽

Ordinary Least Squares ◽

Distributed Lag ◽

Long Run ◽

The Impact

This study aimed to scrutinize the impact of financial development, energy consumption, industrialization, and trade openness on economic growth in Indonesia over the period 1984–2018. To do so, the study employed the autoregressive distributed lag (ARDL) model to estimate the long-run and short-run nexus among the variables. Furthermore, fully modified ordinary least squares (FMOLS), dynamic least squares (DOLS), and canonical cointegrating regression (CCR) were used for a more robust examination of the empirical findings. The result of cointegration confirms the presence of cointegration among the variables. Findings from the ARDL indicate that industrialization, energy consumption, and financial development (measured by domestic credit) positively influence economic growth in the long run. However, financial development (measured by money supply) and trade openness demonstrate a negative effect on economic growth. The positive nexus among industrialization, financial development, energy consumption, and economic growth explains that these variables were stimulating growth in Indonesia. The error correction term indicates a 68% annual adjustment from any deviation in the previous period’s long-run equilibrium economic growth. These findings provide a strong testimony that industrialization and financial development are key to sustained long-run economic growth in Indonesia.

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The Dynamics of Foreign Direct Investment in BRICS Countries

Journal of Economics and Behavioral Studies ◽

10.22610/jebs.v9i3(j).1749 ◽

2017 ◽

Vol 9 (3(J)) ◽

pp. 101-112

Author(s):

Kunofiwa Tsaurai

Keyword(s):

Economic Growth ◽

Human Capital ◽

Foreign Direct Investment ◽

Financial Development ◽

Direct Investment ◽

Fixed Effects ◽

Trade Openness ◽

Human Capital Development ◽

Brics Countries ◽

Capital Development

Recent studies which investigated the determinants of foreign direct investment (FDI) in BRICS include Hsin-Hong and Shou-Ronne (2012), Nandi (2012), Jadhav (2012), Darzini and Amirmojahedi (2013), Nischith (2013), Ho et al. (2013), Kaur et al. (2013) and Priya and Archana (2014). The findings from these studies shows lack of consensus and confirm that a list of agreeable determinants of FDI in BRICS countries is still an unsettled matter. This paper was therefore initiated in order to contribute to the debate on the discourse on FDI determinants in BRICS countries.This paper deviates from earlier similar studies in five ways: (1) uses most recent data, (2) is the first to investigate whether a combination of financial development, trade openness, human capital, economic growth and inflation influence FDI in BRICS countries, (3) uses different proxies of the variables that affect FDI, (4) employed both fixed effects and pooled ordinary least squares (OLS) approaches and (5) used a stacked data approach.The results of the study showed that economic growth, trade openness and exchange rate stability positively impacted on FDI, financial development positively influenced FDI under fixed effects, FDI was positively influenced by human capital development using the pooled OLS and inflation negatively affected FDI in line with literature. Taking into account these findings, this study urges BRICS to implement policies that increase financial sector efficiency and economic growth, maintain stable exchange rates, keep inflation rates at lower levels, enhance trade openness and human capital development in order to increase FDI inflows.

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Economic growth, financial development, trade openness, and CO2 emissions in European countries

African J of Accounting Auditing and Finance ◽

10.1504/ajaaf.2016.078320 ◽

2016 ◽

Vol 5 (2) ◽

pp. 155

Author(s):

Aida Sy ◽

Tony Tinker ◽

Abdelkader Derbali ◽

Lamia Jamel

Keyword(s):

Economic Growth ◽

Financial Development ◽

Trade Openness ◽

European Countries

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Panel Data Analysis of Financial Development, Trade Openness, and Economic Growth: Evidence from BRICS Countries

Emerging Economy Studies ◽

10.1177/2394901518767023 ◽

2018 ◽

Vol 4 (1) ◽

pp. 1-18 ◽

Cited By ~ 4

Author(s):

Ritu Rani ◽

Naresh Kumar

Keyword(s):

Economic Growth ◽

Trade Openness ◽

Panel Cointegration ◽

Least Square ◽

Cointegration Test ◽

Ordinary Least Square ◽

Brics Countries ◽

Long Run ◽

Panel Granger Causality ◽

Panel Cointegration Test

The purpose of this article is to investigate the possible cointegration and direction of causality between foreign direct investment (FDI) inflow, trade openness, and economic growth in BRICS countries using panel data from 1993 to 2015. Besides these variables, money supply and domestic credit (DC) to private players are also added in the model to examine the impact of financial openness on economic growth. The Pedroni’s panel cointegration test is used to examine the existence of long-run relationship, and coefficients of cointegration are examined by fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS). Further panel Granger causality test is used to examine the direction of causality among the competing variables. The results of Pedroni’s panel cointegration test indicate that there exists a long-run relationship among the variables under considerations in BRICS countries. The coefficient of FMOLS and DOLS indicates that trade openness has a positive impact on economic growth in BRICS countries while FDI inflow has a negative impact in these nations. In addition, the results of panel Granger causality confirmed bidirectional causality between FDI inflow and economic growth in the short run. The study recommends that BRICS countries should liberalize trade openness as it strengthens the position of member countries in the world economy.

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