Assessing the effectiveness of the policies to boost hydropower consumption

2015 ◽  
Vol 9 (2) ◽  
pp. 136-155 ◽  
Author(s):  
Sakiru Solarin
Keyword(s):  
Developing Countries ◽  
Unit Root ◽  
Unit Root Test ◽  
Unit Roots ◽  
Total Sample ◽  
Policy Implications ◽  
Data Generation ◽  
Hydroelectric Power ◽  
Content Type ◽  
Non Linear

Purpose – This paper aims to investigate, with the view to determine the effectiveness of blueprints that are designed to boost hydroelectricity use, the unit root properties of hydroelectricity consumption in 50 countries for the period from 1965 to 2012. Design/methodology/approach – A newly proposed non-linear unit root test is used for the purpose of estimations. Findings – The results show that 26 countries (which are mostly developing countries) or 52 per cent of the total sample have unit roots in their hydroelectricity consumption series. Practical implications – The policy implication of these results is that policies associated with the enhancement of hydroelectric power use are likely to be effective in several cases, especially in the developing countries. Originality/value – The main contribution of this paper is that we estimate the non-stationarity of hydroelectricity series within a non-linearity framework. Failure to use a non-linearity method in the presence of non-linear data-generation processes will create biased inferences and wrong policy implications.

Self-employment and economic growth in developing countries: is more self-employment better?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sridevi Yerrabati
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Empirical Analysis ◽  
Empirical Relationship ◽  
Dynamic Panel Data ◽  
Policy Implications ◽  
Content Type ◽  
Self Employment ◽  
Non Linear ◽  
The Empirical Analysis

PurposeThe study aims to examine the non-linear relationship between self-employment and economic growth (growth) in the context of developing countries.Design/methodology/approachData from a sample of 83 developing countries covering a period 2002–2015 is used. The empirical analysis is based on the dynamic panel data estimation, and the results are estimated using the two-step system GMM technique. Non-linearity between self-employment and growth is validated using Sasabuchi (1980) and Lind and Mehlum (2010) (SLM) test.FindingsThe empirical analysis suggests a non-linear and a U-shaped relationship between self-employment and growth, confirmed by the SLM test. The threshold levels for total self-employment, female self-employment and male self-employment are 57.49%, 58.86 and 55.81%. The findings are also robust to alternate estimation technique and alternate measure of the dependent variable.Practical implicationsPolicy implications of the findings include the need for policies that foster and channel self-employment properly as the higher level of self-employment is found to benefit growth.Originality/valueThis study is the first attempt to examine the empirical relationship between self-employment and growth. As such, it makes a novel contribution to the extant literature on the relationship between the two variables.

Non-linear approach to Random Walk Test in selected African countries

2018 ◽  
Vol 14 (3) ◽  
pp. 362-376 ◽  
Author(s):  
Emmanuel Joel Aikins Abakah ◽  
Paul Alagidede ◽  
Lord Mensah ◽  
Kwaku Ohene-Asare
Keyword(s):  
South Africa ◽  
Random Walk ◽  
Stock Market ◽  
Market Efficiency ◽  
Unit Root ◽  
Unit Root Test ◽  
Weak Form ◽  
African Countries ◽  
Content Type ◽  
Non Linear

Purpose The purpose of this paper is to re-examine the weak form efficiency of five African stock markets (South Africa, Nigeria, Egypt, Ghana and Mauritius) using various tests to assess the impact of non-linearity effect and thin trading which are prevalent in African markets on market efficiency. Design/methodology/approach The weekly returns of S&P/IFC return indices for five African countries over the period 2000-2013 were obtained from DataStream and analyzed. The study adopted the newly developed Non-Linear Fourier unit root test advanced by Enders and Lee (2004, 2009) which allows for an unknown number of structural breaks with unknown functional forms and non-linearity in data generating process of stock prices series to test the Random Walk Hypothesis (RWH) for the five markets, and an augment regression model. Findings In light of the empirical evidence the author(s) using Non-linear Fourier Unit Root Test only fail to reject the RWH for South Africa, Nigeria and Egypt leading to the conclusion that these markets follow the RWH and weak-form efficient whilst Ghana and Mauritius are weak-form inefficient. Besides, evaluating non-linear models without adjusting for thin trading effect shows that, South Africa and Ghana markets are weak-form efficient while Nigeria, Egypt and Mauritius are not. However, after accounting for thin trading effect, the author(s) find that South Africa and Egypt markets follow the RWH. The findings imply that market efficiency results depend on the methodology used. Originality/value This paper provides further evidence on stock market efficiency in emerging markets. The finding suggests that thin trading and non-linearity effect influences markets efficiency tests in African stock markets. Thus, recent structural adjustment and liberalization policies have not enhanced stock market operations in Africa. This paper therefore has implications for policy makers and international investors.

Financial literacy and its determinants: the case of rural farm households in Ghana

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Martinson Ankrah Twumasi ◽  
Yuansheng Jiang ◽  
Salina Adhikari ◽  
Caven Adu Gyamfi ◽  
Isaac Asare
Keyword(s):  
Developing Countries ◽  
Financial Literacy ◽  
Financial Education ◽  
Policy Implications ◽  
Farm Households ◽  
Community Group ◽  
Data Set ◽  
Content Type ◽  
Wide Range ◽  
Rural Dwellers

PurposeThis paper aims to examine the determinants of rural dwellers financial literacy in Ghana.Design/methodology/approachA cross-sectional primary data set was used to estimate the factors influencing rural farm households' financial literacy using the IV-Tobit model.FindingsThe findings reveal that most rural residents are financially illiterate. The econometrics model results depicted that respondents' socioeconomic and demographic characteristics such as gender, income, age and education significantly affect financial literacy. Again, respondents who are risk seekers and listen or watch education programs are more likely to be financially literate.Research limitations/implicationsThe paper examined the determinants of rural dwellers financial literacy in four regions in Ghana. Future research should consider all or many regions for an informed generalization of findings.Practical implicationsThis paper provides evidence that rural dwellers are financially illiterate and it would require the policymakers or non-governmental organizations (NGOs) to establish a village or community group that comprises a wide range of bankers and government officials to help rural dwellers acquire some financial skills. Also, the positive relationship between media (whether respondent watches or listens to educational programs) and financial literacy implies that policymakers should focus on improving individuals' financial knowledge through training programs and utilize the media as a channel to propagate financial education to the public.Originality/valueAlthough previous studies have examined the determinants of financial literacy, little is known in developing countries and, in particular, rural communities. The authors fill this gap by contributing to the scanty existing literature in developing countries in several ways. First, this is the first study to examine the financial literacy level of rural dwellers in Ghana. Second, to not undermine the credibility of the estimation results, this study addresses the potential endogeneity issue, which other researchers have not adequately recognized. Finally, the study expands the scant literature on the subject and provides critical policy implications that will help policymakers formulate financial market policies that will contribute to rural dwellers financial literacy enhancement.

scholarly journals THE WEAK FORM MARKET EFFICIENCY IN THE MSCI ETF INDICES: CONVENTIONAL AND THE FOURIER UNIT ROOT TEST ON THE DEVELOPED AND DEVELOPING COUNTRIES

2020 ◽  
Vol 8 (4) ◽  
pp. 409-423
Author(s):  
Sümeyra GAZEL
Keyword(s):  
Developing Countries ◽  
Unit Root ◽  
Structural Break ◽  
Unit Root Test ◽  
Weak Form ◽  
Efficient Market Hypothesis ◽  
Developed Countries ◽  
Exchange Traded Funds ◽  
Unit Root Testing ◽  
Daily Data

In this study, weak form efficiency of the Exchange Traded Funds (ETF) in the Morgan Stanley Capital International (MSCI) Index of developed and developing countries is tested. The Fourier Unit Root test, which does not lose its predictive power in terms of structural break date, number and form, is used on daily data. Also, conventional unit root tests are used for comparison between two different tests. Analysis results indicate common findings in some countries for both unit root testing. However, the Fourier unit root test results relatively more support the assumption of efficient market hypothesis that developed countries may be more efficient than developing countries.

Are regional house prices stationary in Iran? New evidence using Fourier quantile unit root test

2019 ◽  
Vol 12 (5) ◽  
pp. 849-864
Author(s):  
Arash Hadizadeh
Keyword(s):  
Interest Rates ◽  
Housing Market ◽  
Unit Root ◽  
House Prices ◽  
Housing Prices ◽  
Unit Root Test ◽  
Generalized Least Squares ◽  
Main Concern ◽  
Content Type ◽  
Positive Effects

Purpose In the Iranian economy, investing in the housing market has been very important and beneficial for investors and households, because of inflationary environment, low real interest rates, underdeveloped financial and tax systems and economic sanctions. Hence, prediction of house prices is the main concern of housing market agents in the economy. The purpose of this paper is to test the stationary properties of Iran's provinces to improve the prediction of future housing prices. Design/methodology/approach In this paper, the authors have tested the stationary properties of 20 Iran’s province centers over the period from 1993 to 2017 using a novel Fourier quantile unit root test and conventional ordinary/generalized least squares (O/GLS) linear unit root/stationary tests. Findings According to conventional O/GLS linear unit root/stationary tests, most of the house prices series exhibit random walk behavior, whereas by applying the Fourier quantile unit root test, the null hypothesis of unit root is rejected for 15 out of 20 series. Other results indicated that house prices of cities responded differently to positive and negative shocks. Originality/value Previous studies only addressed conventional OLS or GLS linear unit root or stationary tests, but novel Fourier quantile unit root test was not used. New results were obtained based on this unit root test, that, as a priori knowledge, will help benefiting from the positive effects, or avoiding being victimized by the negative effects.

Testing the stationarity and convergence of CO2 emissions series in MENA countries

2019 ◽  
Vol 13 (4) ◽  
pp. 977-990 ◽  
Author(s):  
Cosimo Magazzino
Keyword(s):  
Time Series ◽  
Unit Root ◽  
Policy Implications ◽  
Real Economy ◽  
Cross Sectional ◽  
Close Link ◽  
Content Type ◽  
Mena Countries ◽  
Energy Environment ◽  
Per Capita

Purpose This study aims to investigate the stationarity and convergence of CO2 emissions series in MENA countries. The stationarity and unit root properties of per capita carbon dioxide (CO2) emissions series are explored by an increasing amount of studies, which use different methodologies. Examining the time series properties of energy and environmental series is crucial for both researchers and the policymakers, given the close link between energy, environment and the real economy. In fact, if energy exhibits the presence of a unit root, this suggests that this series does not revert to its equilibrium level after being hit by a shock. Design/methodology/approach The contribution of this work is twofold. First, to the author’s knowledge, a very little attention has been paid to the topics of stationarity and convergence of CO2 emissions in the case of Middle East and North Africa (MENA) member states, especially in a panel context. Convergence analyses of CO2 emissions for MENA countries can improve the knowledge of energy and environmental scenario of the area, giving some ideas for appropriate future policies. Second, this is the first study that jointly analyzed time series and panel data properties of emissions series for these countries. Findings The author finds that relative per capita CO2 emissions in the 19 MENA countries are a mixture of I(0) and I(1) processes and there is a weak evidence to support the stationarity of CO2 emissions. After having verified the presence of cross-sectional dependence in the series, the panel unit root tests in presence of cross-section dependence show strong evidence in favor of non-stationarity. In addition, after performing tests for ß-convergence, it is also found that per capita CO2 emissions are converging on average in 11 out of 19 sample’s countries, while s-convergence analysis reveals that the variance of per capita CO2 emissions decreased over time, which is an indication of convergence. Originality/value Important policy implications emerge from the empirical results. Sustainable environmental and energy policies rely heavily on the CO2 series’ properties. In this regard, determining whether shocks to CO2 emissions are permanent or transitory is important for setting feasible goals for sustainable environmental policies. Given that per capita CO2 emissions are essentially associated with a quality of life, the issues of their reduction have been the leading agenda in energy and environmental management over the past two decades.

scholarly journals Breaks, trends and unit roots in commodity prices: a robust investigation

2014 ◽  
Vol 18 (1) ◽  
Author(s):  
Atanu Ghoshray ◽  
Mohitosh Kejriwal ◽  
Mark Wohar
Keyword(s):  
Unit Root ◽  
Structural Breaks ◽  
Commodity Prices ◽  
Unit Roots ◽  
Commodity Price ◽  
Policy Implications ◽  
Price Shocks ◽  
Price Series ◽  
Commodity Price Shocks ◽  
Trend Breaks

AbstractThis paper empirically examines the time series behavior of primary commodity prices relative to manufactures with reference to the nature of their underlying trends and the persistence of shocks driving the price processes. The direction and magnitude of the trends are assessed employing a set of econometric techniques that is robust to the nature of persistence in the commodity price shocks, thereby obviating the need for unit root pretesting. Specifically, the methods allow consistent estimation of the number and location of structural breaks in the trend function as well as facilitate the distinction between trend breaks and pure level shifts. Further, a new set of powerful unit root tests is applied to determine whether the underlying commodity price series can be characterized as difference or trend stationary processes. These tests treat breaks under the unit root null and the trend stationary alternative in a symmetric fashion thereby alleviating the procedures from spurious rejection problems and low power issues that plague most existing procedures. Relative to the extant literature, we find more evidence in favor of trend stationarity suggesting that real commodity price shocks are primarily of a transitory nature. We conclude with a discussion of the policy implications of our results.

Mean reverting leverage policy in China: theory and evidence from industrial and sectorial level unit root analysis

2018 ◽  
Vol 12 (3) ◽  
pp. 290-306 ◽  
Author(s):  
Ajid ur Rehman
Keyword(s):  
Capital Structure ◽  
Unit Root ◽  
Unit Root Test ◽  
Target Level ◽  
Short Term ◽  
Chinese Firms ◽  
Content Type ◽  
Leverage Ratio ◽  
Stationary Behavior

Purpose This study aims to apply unit root test to investigate the behavior of Chinese firms toward their leverage policy. The study is based on two influential and competing theories of capital structure. Design/methodology/approach This study applies unit root test to investigate the behavior of Chinese firms toward their leverage policy. The study is based on two influential and competing theories of capital structure. Trade off theory advocates that firms have a target level of leverage ratio and that firms try to achieve that optimal leverage ratio, whereas pecking order theory argues that firms have no target level of leverage and that they follow a specific pattern of leverage. For this purpose, this study applies a Fisher type unit root test to 12,808 firm level observations. The data are unbalanced and cover a period from 1991 to 2014. Findings The results reveal the presence of a stationary behavior across short-term, long-term and total leverage policies. For short-term leverage policy, 21 per cent firms show stationary behavior, while for long-term, 20 per cent show a targeting behavior; for the total leverage policy 17 per cent of firms are found to follow a tradeoff model. To make the findings more interesting sample was further classified into profit and loss making firms. The study finds that loss making firms do not follow a target level of leverage in China. Furthermore, unit root is applied to all firms before and after crises-2008. It is revealed that stationary behavior is more prevalent before crises-2008. Originality/value This study is highly important from the point of view that it quantifies firms into distinct categories of following specific model of capital structure. To the best of the author’s knowledge, the findings of this study add to current research knowledge about Chinese firms with respect to adjustment behavior toward a target capital structure.

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