Revisiting the tourism-economic growth nexus: evidence from the United States

2019 ◽  
Vol 31 (9) ◽  
pp. 3779-3798 ◽  
Author(s):  
David N. Aratuo ◽  
Xiaoli L. Etienne ◽  
Tesfa Gebremedhin ◽  
David M. Fryson
Keyword(s):  
Economic Growth ◽  
Exchange Rates ◽  
The United States ◽  
Impulse Response Functions ◽  
Causality Test ◽  
Content Type ◽  
Long Run ◽  
The Usa ◽  
State And Local ◽  
Exchange Rate Shocks

Purpose The purpose of this study is to investigate the causal linkages between tourism and economic growth in the USA and determine how they respond to shocks in the system. Design/methodology/approach The study uses a variety of time series procedures, including the bounds test, Granger causality test, impulse response functions and generalized variance decomposition to analyze the relationship between monthly tourist arrivals (TA) to the USA, real gross domestic product (GDP) and real effective exchange rates. Findings Results suggest that GDP Granger causes TA in the USA in the long run, indicating the economy-driven tourism growth hypothesis. Additionally, a shock to GDP generates a positive and significant effect on TA that persists in the long-run, while exchange rate shocks only have a significant effect in the first six months. Research limitations/implications Different tourism sectors may exert different degrees of influence on the economy. The use of aggregate data on TA in the analysis assumes homogeneity in the industry, thus, only represents the average relationship between tourism and GDP. Practical implications This study provides insight that shapes the investment, marketing, sustainability decisions of the public and private sectors aim at increasing tourist flows to drive economic development at the national, state and local levels. Originality/value Though several studies have examined the factors influencing the international tourist demand of the USA, this is the first to investigate the causal relationships between tourism, GDP and exchange rates for the USA. It is also the first in the US tourism literature to account for the nature of interactions between the three variables because of innovations in the system.

The relationship between financial development and economic growth in Eswatini (formerly Swaziland)

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Siphe-okuhle Fakudze ◽  
Asrat Tsegaye ◽  
Kin Sibanda
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Financial Development ◽  
Granger Causality Test ◽  
Causality Test ◽  
Content Type ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
The Relationship

PurposeThe paper examined the relationship between financial development and economic growth for the period 1996 to 2018 in Eswatini.Design/methodology/approachThe Autoregressive Distributed Lag bounds test (ARDL) was employed to determine the long-run and short-run dynamics of the link between the variables of interest. The Granger causality test was also performed to establish the direction of causality between financial development and economic growth.FindingsThe ARDL results revealed that there is a long-run relationship between financial development and economic growth. The Granger causality test revealed bidirectional causality between money supply and economic growth, and unidirectional causality running from economic growth to financial development. The results highlight that economic growth exerts a positive and significant influence on financial development, validating the demand following hypothesis in Eswatini.Practical implicationsPolicymakers should formulate policies that aims to engineer more economic growth. The policies should strike a balance between deploying funds necessary to stimulate investment and enhancing productivity in order to enliven economic growth in Eswatini.Originality/valueThe study investigates the finance-growth linkage using time series analysis. It determines the long-run and short-run dynamics of this relationship and examines the Granger causality outcomes.

Does transportation infrastructure impact economic growth in India?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sreenu Nenavath
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Positive Impact ◽  
Transport Infrastructure ◽  
Causality Test ◽  
Content Type ◽  
Long Run ◽  
Short Run ◽  
The Government ◽  
Determinants Of Economic Growth

Purpose This paper aims to show a long run and causal association between economic growth and transport infrastructure. Design/methodology/approach In this study, the authors use ARDL models through the period 1990 – 2020 to investigate the relationship between transport infrastructure and economic growth in India. Findings The infrastructure has a positive impact on economic growth in India for the long run. Moreover, Granger causality test demonstrates a unidirectional relationship between transport infrastructure to economic development. Stimulatingly, the paper highlights the effect of air infrastructure statistically insignificant on economic growth in the long and short-run period. Originality/value The original outcome from the study delivers an inclusive depiction of determinants of economic growth from transport infrastructure in India, and these findings will help the policymakers to frame policies to improve the transport infrastructure. Hence, it is proposed that the government of Indian should focus more to upsurge the transport infrastructure for higher economic development.

Exports, financial development and economic growth in Pakistan

2014 ◽  
Vol 13 (2) ◽  
pp. 155-170 ◽  
Author(s):  
Muhammad Shahbaz ◽  
Mohammad Mafizur Rahman
Keyword(s):  
Economic Growth ◽  
Error Correction ◽  
Financial Development ◽  
Error Correction Model ◽  
Causality Analysis ◽  
Bounds Testing ◽  
Causality Test ◽  
Correction Model ◽  
Content Type ◽  
Long Run

Purpose – This paper aims to explore the relationship between exports, financial development and economic growth in case of Pakistan. Design/methodology/approach – The autoregressive distributed lag bounds testing approach to cointegration and error correction model are applied to test the long-run and short-run relationships, respectively. The direction of causality between the variables is investigated by the vector error correction model Granger causality test and robustness of causality analysis is tested by applying innovative accounting approach. Findings – The analysis confirms cointegration for the long-run relation between exports, economic growth and financial development in case of Pakistan. The results indicate that economic growth and financial development spur exports growth in Pakistan. The causality analysis reveals feedback hypothesis that exists between financial development and economic growth, financial development and exports, and, exports and economic growth. Originality/value – This study provides new insights for policy makers to sustain exports growth by stimulating economic growth and developing financial sector in Pakistan.

Effect of economic growth, trade openness, urbanization, and technology on environment of Asian emerging economies

2018 ◽  
Vol 29 (6) ◽  
pp. 1123-1134 ◽  
Author(s):  
Kashif Munir ◽  
Ayesha Ameer
Keyword(s):  
Economic Growth ◽  
Emerging Economies ◽  
New Technologies ◽  
Trade Openness ◽  
Kuznets Curve ◽  
Stirpat Model ◽  
Causality Test ◽  
Content Type ◽  
Long Run ◽  
Short Run

Purpose The purpose of this paper is to analyze the long-run as well as short-run effect of economic growth, trade openness, urbanization and technology on environmental degradation (sulfur dioxide (SO2) emissions) in Asian emerging economies. Design/methodology/approach The study utilizes the augmented STIRPAT model and uses the panel cointegration and causality test to analyze the long-run and short-run relationships. Due to the unavailability of data for all Asian emerging economies, the study focuses on 11 countries, i.e. Bangladesh, Hong Kong, India, Indonesia, Iran, Malaysia, Pakistan, Philippines, Singapore, Sri Lanka and Thailand, and uses balance panel from 1980 to 2014 at annual frequency. Findings Results showed that the inverted U-shape hypothesis of the environmental Kuznets curve holds between economic growth and SO2 emissions. While technology and trade openness increases SO2 emissions, urbanization reduces SO2 emissions in Asian emerging economies in the long run. Unidirectional causality flows from urbanization to SO2 emissions and from SO2 emissions to economic growth in the short run. Practical implications Research and development centers and programs are required at the government and private levels to control pollution through new technologies as well as to encourage the use of disposed-off waste as a source of energy which results in lower dependency on fossil fuels and leads to reduce emissions. Originality/value This study contributes to the existing literature by analyzing the effects of urbanization, economic growth, technology and trade openness on environmental pollution (measured by SO2 emissions) in Asian emerging economies. This study provides the essential evidence, information and better understanding to key stakeholders of environment. The findings of this study are useful for individuals, corporate bodies, environmentalist, researchers and government agencies at large.

Renewable and non-renewable energy consumption and economic growth in the US: A Markov-Switching VAR analysis

2020 ◽  
pp. 0958305X2094403
Author(s):  
Emrah Ismail Cevik ◽  
Durmuş Çağrı Yıldırım ◽  
Sel Dibooglu
Keyword(s):  
Economic Growth ◽  
Renewable Energy ◽  
Energy Consumption ◽  
Energy Demand ◽  
Fossil Fuels ◽  
The United States ◽  
Renewable Energy Consumption ◽  
Causality Test ◽  
Long Run ◽  
The Us

We examine the relationship between renewable and non-renewable energy consumption and economic growth in the United States. While the regime-dependent Granger causality test results for the non-renewable energy consumption and economic growth suggest bi-directional causality in both regimes, we cannot validate any causality between renewable energy consumption and economic growth. The US meets its energy demand from non-renewable sources; as such, renewable energy consumption does not seem to affect economic growth. Given the efficiency and productivity of renewable energy investments, we conclude that it is worthwhile to consider renewable energy inputs to replace fossil fuels given potential benefits in terms of global warming and climate change concerns. In this regard, increasing the R&D investments in the renewable energy sectors, increases in productivity and profitability of renewable energy investments are likely to accrue benefits in the long run.

scholarly journals Do financial systems spur economic growth in the USA? An empirical investigation

2019 ◽  
Vol 66 (2) ◽  
pp. 165-185
Author(s):  
Sheilla Nyasha ◽  
N.M. Odhiambo
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Positive Impact ◽  
The United States ◽  
Bounds Testing ◽  
Financial Systems ◽  
Development Indicators ◽  
Distributed Lag ◽  
Long Run ◽  
The Usa

In this paper, we use the autoregressive distributed lag (ARDL) bounds testing approach to examine the dynamic impact of both bank-based financial development and market-based financial development on economic growth in the United States of America (USA) during the period 1980 to 2012. In order to adequately capture the depth and width of the USA?s financial system, we used both bank-based and marketbased financial development indices as proxies for bank-based and market-based financial systems. These indices were constructed from a number of bank- and market-based financial development indicators, using the method of means-removed average. Our empirical results reveal that both bank-based and market-based financial development have a positive impact on economic growth in the USA. These results apply irrespective of whether the regression analysis is conducted in the long run or in the short run. We, therefore, recommend that both pro-bank-based and pro-market-based financial sector development policies should be pursued in the USA - in order to bolster real sector growth and economic development.

Does any nexus between electricity consumption and economic growth exist? Evidence from Haryana using VAR model

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kamaljit Singh
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Renewable Energy Sources ◽  
Electricity Consumption ◽  
Granger Causality Test ◽  
Economic Downturn ◽  
Causality Test ◽  
Content Type ◽  
Long Run ◽  
Per Capita

Purpose In the fast-changing technological environment, electricity is the essence of the world economy and a significant means for all the modern world’s possessions. The ongoing economic downturn focuses on energy’s role in the economy. This study aims to explore the nexuses between per capita electricity usage and per capita state gross domestic product (SGDP) in Haryana, India. Design/methodology/approach The statistics from 1989 to 2015 have been analyzed using Johansen cointegration, vector autoregression and paired Granger-causality test. Findings The Granger causality test results show that a long-run association is absent. A short-run unidirectional relationship runs from per capita SGDP to per capita electricity usage. Practical implications As a policy suggestion, the policymakers may encourage energy conservation measures and renewable energy sources to lead the country’s sustainable energy supply. Moreover, Haryana can increase its influence in this sector and enter rapidly in the growing markets worldwide by stimulating the production and adoption of digital solutions for energy efficiency. Originality/value To the best of the author’s awareness, this research is one of its nature regarding systematically analyzing electricity usage and economic growth relationship in Haryana.

Economic growth, renewable and nonrenewable energy consumption nexus in India

2020 ◽  
Vol 14 (4) ◽  
pp. 777-792 ◽  
Author(s):  
Shruti Shastri ◽  
Geetilaxmi Mohapatra ◽  
A.K. Giri
Keyword(s):  
Economic Growth ◽  
Renewable Energy ◽  
Energy Consumption ◽  
Renewable Energy Consumption ◽  
Causality Test ◽  
Content Type ◽  
Long Run ◽  
The Impact ◽  
Asymmetric Causality ◽  
Nonrenewable Energy

Purpose The purpose of this paper is to examine the nexus among economic growth, nonrenewable energy consumption and renewable energy consumption in India over the period 1971-2017. Design/methodology/approach This study uses nonlinear autoregressive distributed lags model and asymmetric causality test to explore nonlinearities in the dynamic interaction among the variables. Findings The findings indicate that the impact of nonrenewable energy consumption and renewable energy consumption on the economic growth is asymmetric in both long run and short run. In long run, a positive shock in nonrenewable energy consumption and renewable energy consumption exerts a positive impact on growth. However, the negative shocks in nonrenewable energy consumption produce larger negative effects on the growth. The results of nonlinear causality test indicate a unidirectional causality from nonrenewable energy consumption and renewable energy consumption to economic growth and thus support “growth hypothesis” in context of India. Practical implications The findings imply that policy measures to discourage nonrenewable energy consumption may produce deflationary effects on economic growth in India. Further, the findings demonstrate the potential role of renewable energy consumption in promoting economic growth. Originality/value To the best of the authors’ knowledge, this study is the first attempt to explore nonlinearities in the relationship between economic growth and the components of energy consumption in terms of renewable and nonrenewable energy consumption.

Do ‘Shariah’ indices surpass conventional indices? A study on Dhaka Stock Exchange

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Md. Bokhtiar Hasan Aarif ◽  
Muhammad Rafiqul Islam Rafiq ◽  
Abu N.M. Wahid
Keyword(s):  
Stock Exchange ◽  
Forecast Error ◽  
Error Variance ◽  
Impulse Response Functions ◽  
Causality Test ◽  
Content Type ◽  
Long Run ◽  
Significant Difference ◽  
Short Run ◽  
Two Indices

Purpose This paper aims to examine whether the Sharīʿah indices outperform the conventional indices as evident from Dhaka Stock Exchange (DSE). To achieve the objective, the study, first, assesses the risk adjusted returns of the Sharīʿah and conventional indices and compares the same between the two indices. Second, it examines the short-run and long-run associations between the two indices. Design/methodology/approach The DSEX Sharīʿah index and DSE broad index of the DSE are used as representatives of the Sharīʿah and conventional indices, respectively. The study uses monthly data for the period 2014–2018 and applies a number of techniques such as risk adjusted returns, Johansen’s cointegration test, vector error correction model, Granger causality test, forecast error variance decomposition and impulse response functions techniques. Findings The study reveals that albeit there is no significant difference in simple mean between the two indices, the Sharīʿah index outperforms its conventional counterpart based on the risk adjusted returns. The two indices are associated only in the long-run, while no causal relationship is spotted between them. The overall results show that the Sharīʿah index has dominance over the conventional index in Bangladesh. Research limitations/implications The study could use more pairs of indices, including additional variables such as financial crisis and macroeconomic variables. Practical implications The study has important implications to investors, especially the religious Muslims and ethical ones, who are suggested to invest their funds in the Sharīʿah index without sacrificing returns, rather be monetarily more benefited. Moreover, the other investors can generate diversification benefits by adding both Sharīʿah and conventional indices in their portfolios in the short-run. Originality/value Unlike previous studies, this study endeavors to use a comprehensive methodology to conduct its analysis. Moreover, this is supposedly the first ever effort to conduct such a study in the context of Bangladesh.

Pattern of public debt and debt overhang among BRICS nations: an empirical analysis

2019 ◽  
Vol 12 (3) ◽  
pp. 345-363
Author(s):  
Justin Joy ◽  
Prasant Kumar Panda
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Granger Causality Test ◽  
Capital Formation ◽  
Debt Service ◽  
Causality Test ◽  
Content Type ◽  
Debt Overhang ◽  
Long Run ◽  
Domestic Savings

Purpose This paper aims to analyze the pattern of public debt in Brazil, Russian Federation, India, China and South Africa (BRICS) in a comparative perspective. Besides, an attempt is made to verify the existence of debt overhang as suggested by Krugman (1988) among BRICS nations. Design/methodology/approach Annual panel data for BRICS for the period 1980-2016 has been used for the analysis. Percentage ratio method has been used to analyze the pattern of debt. Panel covariate augmented Dickey–Fuller (pCADF) test has been used to verify the time series properties of the variable, while panel cointegration test of Pedroni (1999) is used to check the existence of any co-integrating vector among the variables. Panel Granger causality test is used to check the causality between the variables. Findings Co-integration result suggests that there exists a strong long-run equilibrium relationship between debt service, domestic savings, capital formation and economic growth of BRICS nations. From Granger causality test, it is observed that domestic savings and capital formation are Granger caused by debt servicing. The coefficients from fully modified ordinary least squares measure a negative impact of debt service on gross capital formation and gross domestic saving. This suggests that the payment for debt service affects capital formation and gross domestic savings adversely. Thus, it gives primary signals for debt overhang effect in BRICS nations. Practical implications Allowing debt service to negatively affect the investment and potential investment will result in slowdown or stagnation in economic growth in the long run, so strategies need to be taken in BRICS nations to check the adverse effects of rising level of debt-service-payment-to-gross national income ratio on domestic savings and capital formation. BRICS nations need to reduce their debt service payment by undertaking appropriate strategy of debt overhaul and fiscal management so that domestic savings and capital formation in the country will not be adversely affected. Besides, BRICS nations need to take measures to augment its domestic savings and capital formations. Originality/value To the best of the authors’ knowledge, no published works have analyzed the pattern of public debt for BRICS (major developing nations). Debt servicing is also not checked for BRICS in recent papers, considering overhang approach.

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