Exports, financial development and economic growth in Pakistan

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.

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

African Journal of Economic and Management Studies ◽

10.1108/ajems-06-2021-0291 ◽

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.

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ANALISIS FAKTOR-FAKTOR YANG MEMPENGARUHI UTANG LUAR NEGERI DI INDONESIA

Jurnal Ecogen ◽

10.24036/jmpe.v1i3.4989 ◽

2019 ◽

Vol 1 (3) ◽

pp. 482

Author(s):

Defrizal Saputra ◽

Hasdi Aimon ◽

Melti Roza Adry

Keyword(s):

Economic Growth ◽

Interest Rates ◽

Error Correction ◽

Foreign Debt ◽

Secondary Data ◽

Error Correction Model ◽

Short Term ◽

Correction Model ◽

Descriptive Research ◽

Long Run

This study aims to determine and analyze the factors that influence foreign debt in Indonesia with variables that effect economic growth, inflation, and foreign interest rates. This type of research is associative descriptive research, where the data used is secondary data from 1970 to 2017 obtained from institutions and related institutions, which are analyzed using the Error Correction Model (ECM) method. This study initially used the Ordinary Lest Square (OLS) method to see long-term, and used ECM because it wanted to see short-term at the same time. The findings of this study indicate that economic growth and inflation have a significant effect in the long run, but the interest rates have no significant effect, and in the short term all have a significant effect on foreign debt in Indonesia. Keywords: foreign debt, economic growth, inflation, interest rates and error correction model (ECM)

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The Long-Run and Short-Run Impacts of Investment, Export, Money Supply, and Inflation on Economic Growth In Indonesia

Journal of Economics Business and Accountancy Ventura ◽

10.14414/jebav.v22i1.1589 ◽

2019 ◽

Vol 22 (1) ◽

Author(s):

Erni Panca Kurniasih

Keyword(s):

Economic Growth ◽

Time Series ◽

Error Correction ◽

Money Supply ◽

Time Series Data ◽

Error Correction Model ◽

Series Data ◽

Correction Model ◽

Long Run ◽

Short Term Investment

ABSTRACTThe development of investment and exports in Indonesia shows an increase, as well as money supply, while the inflation rate shows a decline, but this is not always followed by increasing economic growth. This study aims to explain the relationship between investment, export, money supply and inflation with the economic growth in Indonesia. The data used was time series data from the first quarter in 2001 to the fourth quarter in 2014 and was analyzed using multiple regression models with Error Correction Model (ECM) and classical assumptions. The study findings show that in short-term investment, export, money supply and inflation are not significant to economic growth. In long-run, investment has negative and significant effect on the economic growth, while export, money supply and inflation have positive and significant effect on the economic growth in Indonesia. Bank Indonesia must applied a tight money policy consistently to achieve the long-term inflation target ABSTRAKPerkembangan investasi dan ekspor di Indonesia menunjukkan peningkatan, demikian pula jumlah uang beredar, sementara tingkat inflasi menunjukkan penurunan, namun hal tersebut tidak selalu diikuti dengan meningkatnya pertumbuhan ekonomi. Studi ini bertujuan untuk menjelaskan hubungan antara investasi, ekspor neto, jumlah uang beredar dan inflasi terhadap pertumbuhan ekonomi di Indonesia. Data yang digunakan adalah data time series dari kuartal pertama tahun 2001 hingga kuartal keempat tahun 2014 dan dianalisa dengan menggunakan model regresi berganda dengan Error Correction Model (ECM). Hasil studi menunjukkan bahwa investasi, ekspor, jumlah uang beredar dan inflasi tidak signifikan terhadap pertumbuhan ekonomi di Indonesia dalam jangka pendek. Investasi berpengaruh negatif dan signifikan terhadap pertumbuhan ekonomi di Indonesia dalam jangka panjang, sedangkan ekspor , jumlah uang beredar dan inflasi berpengaruh positif dan signifikan terhadap pertumbuhan ekonomi di Indonesia. Bank Indonesia harus menerapkan kebijakan moneter yang ketat secara konsisten pada pencapaian sasaran inflasi jangka menenngah

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Causality between VAT and economic growth in Nigeria: An ARDL bounds testing approach

Journal of Emerging Economies and Islamic Research ◽

10.24191/jeeir.v6i1.8774 ◽

2018 ◽

Vol 6 (1) ◽

pp. 55

Author(s):

Hammed Agboola Yusuf ◽

Irwan Shah Zainal Abidin ◽

Normiza Bakar ◽

Oluwaseyi Hammed Musibau

Keyword(s):

Economic Growth ◽

Time Series ◽

Error Correction ◽

Trade Openness ◽

Value Added ◽

Error Correction Model ◽

Domestic Investment ◽

Correction Model ◽

Long Run ◽

Short Run

Value Added Tax(VAT) is a consumption tax imposed at every stage of consumption level whose burden is burned by final consumer of goods and services. In most developing economies in the world, VAT as a source of revenue to the government that has been notable for its significant role in ensuring economic efficiency. However, VAT revenue has been underutilised in Nigeria due to a high level of corruption in the process of administering the tax. This study examines the impact of VAT, domestic investment and trade openness on economic growth in Nigeria from 1980 to 2016 using ARDL techniques. The research design is time series, and the data were analysed using time series unit root test, error correction model regression, short run and long run ARDL. The result found that VAT, domestic investment and trade openness had a positive and significant impact on real GDP. Also, corruption index is negative also significant in the long run. In the same vein, past value added tax had a negative and weak significant impact on real gross domestic product indicating convergence to long-run causality between economic growths and VAT and economic growth. The Error Correction Model (ECM (-1)) coefficient had a negative and statistically significant sign. This shows that 39 percent can quickly correct short-run deviation. The study, therefore, recommends that tax administrative loopholes should be plugged for tax revenue to contribute immensely to the development of the economy since past VAT had a significant impact on economic growth.

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Does financial development matter for domestic investment? Empirical evidence from India

South Asian Journal of Business Studies ◽

10.1108/sajbs-09-2020-0332 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Niharika Sinha ◽

Swati Shastri

Keyword(s):

Financial Development ◽

Principal Component ◽

Domestic Investment ◽

Bounds Testing ◽

Causality Test ◽

Content Type ◽

Development Indicators ◽

Indian Economy ◽

Long Run ◽

The Impact

PurposeThis paper empirically examines the impact of financial development on domestic investment in India for the period 1989–2017.Design/methodology/approachThis study employs the autoregressive distributed lag (ARDL) bounds testing approach to co-integration to test the long-run relationship between financial development and domestic investment. To test the direction of causality, Toda–Yamamoto causality test and vector error correction model (VECM) Granger causality/Block Exogeneity Wald test have been employed. Investment has been measured by Gross Capital Formation. To capture various aspects of financial development in India, eight alternative indicators (both bank based and market based) have been used. With the help selected indicators, a composite index (FINDEX) of financial development has been constructed using principal component analysis (PCA).FindingsThe estimated result finds evidence in favour of positive, short-run and long-run impact of financial development on investment in the Indian economy. Both bank-based and market-based indicators are found to significantly affect the level of investment. The significant effect of efficiency-based financial development indicators (both bank based and market based) upon domestic investment implies that there is a need to implement policies that ensure the efficiency of financial intermediation.Originality/valueTo the best of authors' knowledge, not much research has been done to explore the relationship between financial development and domestic investment, especially in the case of Indian economy. This study also tries to find the impact of bank-based and market-based financial development indicators upon domestic investment to explore banks vs market issue.

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Oil Consumption in Transport and Economic Growth Nexus: Empirical Evidence from Cameroon

European Scientific Journal ESJ ◽

10.19044/esj.2018.v14n10p409 ◽

2018 ◽

Vol 14 (10) ◽

pp. 409

Author(s):

Youssouf Nvuh Njoya ◽

Mouhamed Mbouandi Njikam

Keyword(s):

Economic Growth ◽

Error Correction ◽

Impulse Response ◽

Response Function ◽

Impulse Response Function ◽

Error Correction Model ◽

Annual Data ◽

Oil Consumption ◽

Correction Model ◽

Long Run

This paper focuses on casting light on the causal relationship between oil consumption in transport and economic growth in Cameroon. This paper uses an annual data covering the period 1975-2014, which is a five-step modern time series techniques. They include the Unit root tests, co-integration analysis, and Granger-causality based on error correction model. As a robustness test, we made use of the impulse response function and variance decomposition to portray the correlations between variables. The main result highlighted in the present paper point out the presence of a long-run equilibrium relationship between oil consumption in transport and economic growth. The error correction model shows that an estimated 1% increase in economic growth causes a rise in oil consumption in transport by 1.29 % in the long run. Another results show that there exists bidirectional causality in the long-run relationship and there was no causality in the short-run relationship at the 5% level of significance. The decomposition of the variance and impulse response function indicates a dissymmetric of the variance of the prediction error and the dynamic properties of the system. This study provides a basis for the discussion of energy consumption in transport policies in order to maintain a sustainable economic growth in Cameroon.

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Government Spending and Economic Growth in Ghana: Evidence from Granger Causality Analysis

THE INTERNATIONAL JOURNAL OF MANAGEMENT SCIENCE AND BUSINESS ADMINISTRATION ◽

10.18775/ijmsba.1849-5664-5419.2014.32.1005 ◽

2017 ◽

Vol 3 (2) ◽

pp. 50-58 ◽

Cited By ~ 1

Author(s):

Lucy Anning ◽

Wang Haisu ◽

Joshua Sunday Riti

Keyword(s):

Economic Growth ◽

Granger Causality ◽

Government Spending ◽

Causality Analysis ◽

Economic Activities ◽

Bounds Testing ◽

Causality Test ◽

Distributed Lag ◽

Long Run ◽

Short Run

In spite of the diverse major issues affecting the economy of Ghana over the years, the economy continues to experience a downward spiral in its economic growth. Taking into account three opining views regarding government spending and economic growth, this study sets to investigate the causal nexus fractious and economic growth in Ghana. We apply the autoregressive distributed lag (ARDL) bounds testing approach to co-integration and the vector error correction model (VECM)-Granger causality test to evaluate both long- and short-run parameters including the direction of causation with data spanning from 1980 and 2015.The empirical results show evidence of co-integration for the existence of a long-run relationship between the dependent and independent variables. The Granger causality tests, in addition, indicated causal independence between government spending and economic growth within the time framework of the study in the economy of Ghana. Government spending has a cause effect on economic growth in Ghana. However, government spending channeled into a more fractious use with the building of resilience and infrastructural development that are self-liquidating if encouraged will enhance economic activities in the short run and also propel growth in the long run in the Ghana.

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Natural gas consumption and economic growth nexus: an investigation for France

International Journal of Energy Sector Management ◽

10.1108/ijesm-07-2019-0005 ◽

2019 ◽

Vol 14 (2) ◽

pp. 261-284

Author(s):

Sahbi Farhani ◽

Mohammad Mafizur Rahman

Keyword(s):

Economic Growth ◽

Natural Gas ◽

Causal Relation ◽

Causality Analysis ◽

Bounds Testing ◽

Content Type ◽

Long Run ◽

Gas Consumption ◽

Natural Gas Consumption ◽

The Relationship

Purpose The purpose of this study is to investigate the relationship between natural gas consumption and economic growth of France. Design/methodology/approach To analyze the relationship, an extended Cobb–Douglas production function is used. The auto-regressive distributive lag bounds testing approach is applied to test the existence of the long-run relationship between the series. The vector error correction model Granger causality approach is implemented to detect the direction of causal relation between the variables. Findings The results show that variables are cointegrated for the long-run relationship. They also indicate that natural gas consumption, exports, capital and labor are the contributing factors to economic growth in France. The causality analysis indicates that feedback hypothesis is validated between gas consumption and economic growth. The bidirectional causality is also found between exports and economic growth, gas consumption and exports and capital and gas consumption. Research limitations/implications The feedback hypothesis between gas consumption and economic growth implies that adoption of energy conservation policies should be discouraged; rather, gas consumption and economic growth policies should be jointly implemented. Originality/value This study is an original work for France and shows the results of the relationship between natural gas consumption and economic growth. In line with the results of this study, new direction for policy makers is opened up to formulate a comprehensive energy policy to sustain long-term economic growth in France.

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PARIWISATA PENGARUHNYA TERHADAP EKONOMI : ANALISIS KAJIAN ASAL KUNJUNGAN WISATAWAN MANCANEGARA

Jurnal Ilmu Ekonomi Terapan ◽

10.20473/jiet.v4i1.10663 ◽

2019 ◽

Vol 4 (1) ◽

Author(s):

Kdwi wahyu Ksamawan ◽

Ghozali Maskie ◽

David Kaluge

Keyword(s):

Economic Growth ◽

Exchange Rate ◽

Middle East ◽

Error Correction ◽

Error Correction Model ◽

American Continent ◽

Correction Model ◽

Long Run ◽

Tourism Sector ◽

Positive Effect

The influence of foreign tourist arrivals based on the region of origin on economic growth was analyzed in this study, using GDP data as a proxy for economic growth, the number of tourist visits, the Consumer Price Index, and the monthly period of exchange for 2007-2016. This study uses secondary data with the Error Correction Model (ECM) regression method with short and long-term calculations. The results showed that the variable number of tourist visits had an effect on GDP in the continents of Asia, Europe, Middle-East, and Oceania while in the long run in all continents except America. The exchange rate variable in the short term has a negative effect on GDP in the American Continent and the Middle East, while in the long run, the exchange rate variable has a positive effect on GDP in the Asean continent and Europe. The CPI variable only has a positive effect on GDP in the long run for all continents except America. So that it can be concluded that not all continents have a positive impact on GDP, one of which is the American continent, so in order to optimize and increase economic growth, it should be stressed that the cost of developing the tourism sector in America should be allocated more proportionally or diverted to continents of Asia, ASEAN, Oceania, Europe and the Middle East.of developing the tourism sector in America should be allocated more proportionally or diverted to continents of Asia, ASEAN, Oceania, Europe and the Middle East. Keywords: Error Correction Model,GDP, Tourism

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INTERAKSI ASPEK PERMODALAN, RISIKO PEMBIAYAAN, DAN INDIKATOR MAKROEKONOMI DALAM MEMPENGARUHI PROFITABILITAS BPRS DI INDONESIA PERIODE 2014-2018

Jurnal Benefita ◽

10.22216/jbe.v5i3.5623 ◽

2020 ◽

Vol 5 (3) ◽

pp. 401

Author(s):

Feri Irawan

Keyword(s):

Economic Growth ◽

Time Series ◽

Error Correction ◽

Error Correction Model ◽

Series Data ◽

Short Term ◽

Correction Model ◽

Long Run ◽

Short And Long Term

ABSTRACTThis study aims to analyze the effect of capital aspects (CAR), financing risk (NPF) and macroeconomic variables including economic growth, inflation and the BI Rate on profitability (ROE) in the short and long term. By using time series data for the monthly period from 2013-2018 and the Error-Correction Model (ECM) and cointegration approach, it is found that CAR and NPF do not have a significant effect on ROE in the short and long term. Economic growth, inflation and the BI Rate in the short term do not have a significant effect on ROE, in the long run economic growth, inflation and the BI Rate have a significant effect on ROE. In the short term, economic growth, inflation and the BI Rate disturb the balance of profitability, but in the long run it returns to its equilibrium level. It is necessary to integrate the BPRS policy strategy in managing capital and risk with government policies related to economic growth and inflation. ABSTRACTPenelitian bertujuan menganalisis pengaruh aspek permodalan (CAR), risiko pembiayaan (NPF) dan variabel makroekonomi yang meliputi pertumbuhan ekonomi, inflasi dam BI Rate terhadap profitabilitas (ROE) dalam jangka pendek dan jangka panjang. Dengan menggunakan data time series periode bulanan dari tahun 2013-2018 dan pendekatan Error-Correction Model (ECM) dan kointegrasi, ditemukan bahwa CAR dan NPF tidak berpengaruh secara signifikan terhadap ROE dalam jangka pendek dan jangka panjang. Pertumbuhan ekonomi, inflasi dan BI Rate dalam jangka pendek tidak berpengaruh signifikan terhadap ROE, dalam jangka panjang pertumbuhan ekonomi, inflasi dan BI Rate berpengaruh signfikan terhadap ROE. Pada jangka pendek, pertumbuhan ekonomi, inflasi dan BI Rate menggangu keseimbangan profitabilitas namun dalam jangka panjang kembali pada tingkat keseimbangannya. Diperlukan pengintegrasi strategi kebijakan BPRS dalam mengelola permodalan dan risiko dengan kebijakan pemerintah terkait dengan pertumbuhan ekonomi dan inflasi.

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