Driving effect of CO2 emissions on economic growth—application of empirical likelihood for generalized method of moments

There is considerable debate over the effects of both corruption and shadow economy on growth, but few studies have considered how the interaction between them might affect economic growth. We study how corruption levels in public administration affect economic growth and how this effect depends on the shadow economy. Using Ordinary Least Squares (OLS), fixed effects, and system generalized method of moments (GMM) on a dataset of 34 OECD countries over the period 1995-2014. The estimation results indicate that increased corruption and a larger shadow economy lead to decrease in economic growth. Results additionally indicate that the shadow economy magnifies the effect of corruption on economic growth. These results imply significant complementarities between corruption and the shadow economy, suggesting that the reduction of corruption will lead to a fall in the size of the shadow economy and will also reduce the negative effects of corruption on economic growth through the underground economy.

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Bank-based and market-based development and economic growth: an international investigation

Studies in Economics and Finance ◽

10.1108/sef-12-2017-0346 ◽

2019 ◽

Vol 36 (3) ◽

pp. 365-394 ◽

Cited By ~ 1

Author(s):

Isaac Boadi ◽

Daniel Osarfo ◽

Perpetual Boadi

Keyword(s):

Economic Growth ◽

Financial Development ◽

Method Of Moments ◽

Design Methodology ◽

Generalized Method Of Moments ◽

Fixed Effect ◽

Relative Impact ◽

Content Type ◽

Regional Effects ◽

Development Policies

Purpose The purpose of this paper is to investigate the relative impact of bank-based and market-based financial developments on economic growth from 1984 to 2015, using 60countries. Design/methodology/approach This study uses fixed effect and generalized method of moments (GMM) to investigate the relative impact of bank-based and market-based financial developments on economic growth from 1984 to 2015, using 60 countries. The study further controls regional effects and the Asian crisis, as well as the global economic crisis. Findings The empirical results of the study revealed that market-based development positively affects economic growth. Besides, market-based financial development indirectly promotes investment, which has the potential to strongly enhance growth. The findings of this study, therefore, provide more support to pro-market-based financial development policies in these regions. Interestingly, bank-based development has no direct impact on development, but indirectly encourages investment, which also promotes growth. Originality/value This paper is the first of its kind to empirically examine fixed effect and GMM to investigate the relative impact of bank-based and market-based financial developments on economic growth from 1984 to 2015, using 60 countries.

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GEL METHODS FOR NONSMOOTH MOMENT INDICATORS

Econometric Theory ◽

10.1017/s0266466610000137 ◽

2010 ◽

Vol 27 (1) ◽

pp. 74-113 ◽

Cited By ~ 13

Author(s):

Paulo M.D.C. Parente ◽

Richard J. Smith

Keyword(s):

Empirical Likelihood ◽

Method Of Moments ◽

Jacobian Matrix ◽

Generalized Method Of Moments ◽

Gmm Estimator ◽

First Order ◽

Generalized Empirical Likelihood ◽

Finite Samples ◽

Class Of Estimators ◽

Validity Of Tests

This paper considers the first-order large sample properties of the generalized empirical likelihood (GEL) class of estimators for models specified by nonsmooth indicators. The GEL class includes a number of estimators recently introduced as alternatives to the efficient generalized method of moments (GMM) estimator that may suffer from substantial biases in finite samples. These include empirical likelihood (EL), exponential tilting (ET), and the continuous updating estimator (CUE). This paper also establishes the validity of tests suggested in the smooth moment indicators case for overidentifying restrictions and specification. In particular, a number of these tests avoid the necessity of providing an estimator for the Jacobian matrix that may be problematic for the sample sizes typically encountered in practice.

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Book Reviews

Journal of Economic Literature ◽

10.1257/jel.51.3.883.r3 ◽

2013 ◽

Vol 51 (3) ◽

pp. 886-888

Keyword(s):

Inverse Problem ◽

Empirical Likelihood ◽

Method Of Moments ◽

Linear Models ◽

Choice Model ◽

Generalized Method Of Moments ◽

Problem Formulation ◽

Distribution Functions ◽

Binary Response ◽

Quadratic Loss

Provides a conceptual and empirical understanding of basic information theoretic econometric models and methods. Discusses formulation and analysis of parametric and semiparametric linear models; method of moments, generalized method of moments, and estimating equations; a stochastic-empirical likelihood inverse problem—formulation and estimation; a stochastic empirical likelihood inverse problem—estimation and inference; Kullback–Leibler information and the maximum empirical exponential likelihood; the Cressie–Read family of divergence measures and empirical maximum likelihood functions; Cressie–Read minimum power divergence (MPD) type estimators in practice—Monte Carlo evidence of estimation and inference sampling performance; family of MPD distribution functions for the binary response-choice model; estimation and inference for the binary response model based on the MPD family of distributions; and choosing the optimal divergence under quadratic loss. Judge is a professor at the University of California, Berkeley. Mittelhammer is Regents Professor of Economic Sciences and Statistics at Washington State University.

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Tourism-Led Growth Hypothesis: A New Global Evidence

Cornell Hospitality Quarterly ◽

10.1177/1938965517735743 ◽

2017 ◽

Vol 59 (3) ◽

pp. 304-311 ◽

Cited By ~ 23

Author(s):

Chor Foon Tang ◽

Eu Chye Tan

Keyword(s):

Economic Growth ◽

Method Of Moments ◽

Generalized Method Of Moments ◽

Political Stability ◽

Dynamic Panel ◽

Beneficial Impact ◽

The Relationship ◽

Different Levels ◽

Growth Hypothesis ◽

Global Evidence

The primary aim of this study is to determine whether the tourism-led growth hypothesis is globally valid by accounting for countries’ income levels and their institutional qualities, against a panel dataset of 167 countries. The institutional qualities referred to are political stability and corruption control. We employ the dynamic panel generalized method of moments (GMM) approach to examine the relationship. It can be inferred from the exercise that tourism positively contributes to economic growth but the effect varies across countries at different levels of income and institutional qualities. Therefore, the effect of tourism on economic growth is contingent on levels of income and institutional qualities of the host tourism countries. Policy initiatives that aim to promote and strengthen institutional qualities should be undertaken for a country to enjoy the beneficial impact of tourism on economic growth and development.

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Large deviations of generalized method of moments and empirical likelihood estimators

Econometrics Journal ◽

10.1111/j.1368-423x.2011.00346.x ◽

2011 ◽

Vol 14 (2) ◽

pp. 321-329 ◽

Cited By ~ 1

Author(s):

Taisuke Otsu

Keyword(s):

Large Deviations ◽

Empirical Likelihood ◽

Method Of Moments ◽

Generalized Method Of Moments

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Comparing Credit Risk in Islamic and Conventional Banking Using Bank-Level Panel Data

Economica Jurnal Ekonomi Islam ◽

10.21580/economica.2020.11.2.5027 ◽

2020 ◽

Vol 11 (2) ◽

pp. 235-262

Author(s):

Akhmad Akbar Susamto ◽

Danes Quirira Octavio ◽

Dyah Titis Kusuma Wardani

Keyword(s):

Economic Growth ◽

Credit Risk ◽

Method Of Moments ◽

Generalized Method Of Moments ◽

Dynamic Panel ◽

Gmm Estimator ◽

Panel Regressions ◽

Conventional Banks ◽

Risk Determinants ◽

Asset Size

Abstract: This paper investigates if there is a difference in the level of the credit risk of Islamic as compared to the level of credit risk of conventional banks. This paper further investigates the importance of various credit risk determinants and possible differences in how such determinants affect credit risk in Islamic and conventional banking industries. This paper employs dynamic panel regressions using system GMM estimators. The sample includes 11 Islamic and 95 conventional banks in Indonesia throughout 2003-2018. Based on the results, it is concluded that there is no difference in the level of the credit risk of Islamic as compared to that of conventional banks. It is also concluded that credit risk is significantly affected by current and lagged asset size, lagged financing, current profitability, lagged economic growth, and current inflation. The effect of lagged financing, current profitability, and lagged economic growth is different in Islamic and conventional banking.Abstrak: Makalah ini menganalisis apakah terdapat perbedaan antara tingkat risiko kredit pada perbankan syariah dan tingkat risiko kredit pada perbankan konvensional. Makalah ini selanjutnya juga menganalisis signifikansi faktor-faktor yang diduga mempengaruhi risiko kredit dan kemungkinan perbedaan pengaruh faktor-faktor tersebut terhadap risiko kredit pada perbankan syariah dibandingkan pada perbankan konvensional. Makalah ini menggunakan regresi panel dinamis dengan system generalized method of moments (GMM) estimator. Sampel dalam makalah ini mencakup 11 bank syariah dan 95 bank konvensional di Indonesia selama periode 2003-2018. Berdasarkan hasil analisis, dapat disimpulkan bahwa tidak terdapat perbedaan perbedaan antara tingkat risiko kredit pada perbankan syariah dan tingkat risiko kredit pada perbankan konvensional. Begitu pula, dapat disimpulkan bahwa risiko kredit secara signifikan dipengaruhi oleh ukuran aset tahun ini dan tahun lalu, pembiayaan tahun lalu, profitabilitas tahun ini, pertumbuhan ekonomi tahun lalu dan inflasi tahun ini. Pengaruh pembiayaan tahun lalu, profitabilitas tahun ini, dan pertumbuhan ekonomi tahun lalu, secara khusus berbeda pada perbankan syariah dibandingkan pada perbankan konvensional.

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