scholarly journals Migrants’ remittances and economic growth in Egypt: an empirical analysis from 1980 to 2017

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rasha Qutb
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Recipient Country ◽  
Growth Effect ◽  
Annual Data ◽  
Content Type ◽  
Long Run ◽  
Integration Test ◽  
Migrant Remittances ◽  
The Impact

Purpose Migrants’ remittances to Egypt have increased considerably in both size and importance over the past 40 years. This increase has made Egypt one of the top remittance recipients in the world and the leading recipient country in the Middle East. As migrant remittances are one of Egypt's main sources of foreign capital, this study aims to identify the impact of these remittances on economic growth. Design/methodology/approach The study collects annual data on migrant remittances sent to Egypt during the period 1980–2017. The study uses the Augmented Dickey–Fuller test and Johnsen's Co-integration test to establish long-run relationships between variables. Then, a vector error correction model (VECM) is used to combine long-run and short-run dynamics, and a Granger causality test is performed. Finally, diagnostic tests of the VECM are conducted. Findings Results reveal that migrants’ remittances to Egypt are countercyclical in the sense that they have a long-term negative impact on economic growth. These results are determined by the Granger causality between migrants' remittances, inflation rate and imports. Practical implications The study can help policymakers to develop appropriate policies to turn migrants' remittances into a reliable source of capital that could result in a stable economic growth. Originality/value Although various empirical studies have examined the growth effect of remittances, most of them are based on cross-country data. This study contributes to the field by attempting to close a gap in the literature by empirically analyzing the impact of remittances on a single country over a long period.

scholarly journals IMPACT OF EXPORTS AND IMPORTS ON THE ECONOMIC GROWTH IN BURUNDI

2020 ◽  
pp. 17-25
Author(s):  
Wu Jiying ◽  
Niyonsaba Eric ◽  
Blessed Kwasi Adjei
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Annual Data ◽  
Long Run ◽  
Integration Test ◽  
Augmented Dickey Fuller ◽  
Short Run ◽  
Stationarity Test ◽  
Integrating Vector ◽  
The Impact

This paper investigated the impact of exports and imports on the economic growth in Burundi. To achieve this purpose, annual data for the periods between 1989 and 2018 were tested. The study used Granger Causality and Johansen Co-integration approach for long-run relationship Using Augmented Dickey-Fuller (ADF) and Phillip-Perron (PP) stationarity test, the variable proved to be integrated of the order I(1) at first difference. Johansen and Juselius Co-integration test was used to determine the presence or otherwise of a co-integrating vector in the variables. To find out the direction of causality among the variables, at least in the short-run, the Pairwise Granger Causality was carried out. Exports were found to Granger Cause imports. The results show that there is unidirectional causality between exports and imports. These results provide evidence that growth in Burundi was propelled by a growth-led import strategy as well as export-led import. Imports are thus seen as the source of economic growth in Burundi. KEYWORDS: Co-integration, Granger causality; Exports; Imports; Economic growth, Burundi.

The impact of financial development on economic growth

2016 ◽  
Vol 11 (4) ◽  
pp. 569-583 ◽  
Author(s):  
Madhu Sehrawat ◽  
A.K. Giri
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Structural Breaks ◽  
Regional Cooperation ◽  
Ordinary Least Squares ◽  
Annual Data ◽  
Content Type ◽  
Long Run ◽  
Integration Test ◽  
The Impact

Purpose The purpose of this paper is to investigate the possible co-integration and the direction of causality between financial development and economic growth in South-Asian Association for Regional Cooperation (SAARC) countries using annual data from 1994 to 2013. Design/methodology/approach The Carrion-i-Silvestre et al. (2005) stationarity test with structural breaks is used to check the stationarity. The Westerlund (2006) panel co-integration test is employed to examine the long-run relationship among the variables. To carry out tests on the co-integrating vectors, fully modified ordinary least squares (FMOLS) and PDOLS techniques are used and panel Granger causality test is used to examine the direction of the causality. Findings The Westerlund (2006) panel co-integration test confirms the existence of the long-run relationship between financial development and economic growth for SAARC countries. The coefficients of FMOLS and DOLS indicate that index of financial development (IFD) and trade openness supports economic growth in SAARC region. In the short-run, there is unidirectional causality running from IFD to economic growth. Research limitations/implications In the view of these findings it is recommended that countries in the region should adopt policies geared toward financial sector development to attain high economic growth. Originality/value To the best of the author’s knowledge, no studies have looked into SAARC countries to study the relationship between financial development and economic growth, this study is the first of its kind.

scholarly journals The drivers of economic growth in China and India: globalization or financial development?

2017 ◽  
Vol 16 (1) ◽  
pp. 54-84 ◽  
Author(s):  
Magda Kandil ◽  
Muhammad Shahbaz ◽  
Mantu Kumar Mahalik ◽  
Duc Khuong Nguyen
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Emerging Market ◽  
Annual Data ◽  
Test Results ◽  
Causality Test ◽  
Content Type ◽  
China And India ◽  
Integration Test ◽  
The Impact

Purpose Using annual data from 1970 to 2013 for China and India, this paper aims to examine the impact of globalization and financial development on economic growth by endogenizing capital and inflation and drawing comparisons between the two fastest growing emerging market economies. Design/methodology/approach In the long run, co-integration test results indicate that financial development increases economic growth in China and India. Findings The results also reveal that globalization accelerates economic growth in India but, surprisingly, impairs economic growth in China, as it increases competition for exports. The results furthermore disclose that acceleration in capitalization and inflation, as a proxy for aggregate demand, are positively linked to economic growth in China and India. Originality/value Causality test results indicate that both financial development and economic growth are interdependent. In contrast, causality runs from higher economic growth to increased globalization in India, while the results do not support long-term causality between globalization and economic growth in China.

scholarly journals Impact of Domestic Public Debt on Economic Growth - An Empirical Study in the Indian Context

2016 ◽  
Vol 6 (4) ◽  
pp. 101-116
Author(s):  
Srinivasa Rao Gangadharan ◽  
Lakshmi Padmakumari
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Positive Impact ◽  
Least Square ◽  
Distributed Lag ◽  
Long Run ◽  
Domestic Debt ◽  
Integration Test ◽  
Ordinary Least Square Regression ◽  
The Impact

This study is an empirical investigation to assess the impact of domestic debt on India’s Economic growth during the period 1980 – 2014. We use data on Domestic Debt, Net Fiscal Deficit, Exports, Savings, Real Gross Domestic Product, Population and Terms of Trade. This study adopts the ARDL Co-Integration and Granger Causality techniques to investigate the relation between the key variables. The study also employs various post estimation tests to validate the fitness and stability of the models based on Gauss Markov assumptions, after employing the ordinary least square regression on various models. We find that debt negatively impacts economic growth while savings has a positive impact. The Auto Regressive Distributed Lag (ARDL) technique used to test the robustness suggests existence of co-integration among the variables. However, none of the long run co-efficient is significant. The granger causality and co-integration test results support the traditional view that debt negatively impacts economic growth.

Remittances, electricity consumption and electric power losses in Jamaica

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anupam Das ◽  
Adian McFarlane
Keyword(s):  
Electric Power ◽  
Granger Causality ◽  
Negative Relationship ◽  
Electricity Consumption ◽  
Response Analysis ◽  
Annual Data ◽  
Power Losses ◽  
Content Type ◽  
Long Run ◽  
The Impact

PurposeThe purpose of this paper is to examine the impact of remittance inflows (remittances) on electricity consumption and electric power losses in Jamaica.Design/methodology/approachThe authors use annual data from 1976 to 2014 and apply vector error correction modelling, Granger causality testing and impulse response analysis.FindingsFirst, the authors find that there is co-integration between remittances and the energy variables, namely electricity consumption and electric power losses. Second, short-run Granger causality exists between the energy variables and remittances. This causality is bidirectional between the energy variables and positive changes in remittances, but it is unidirectional running from the energy variables to negative movements in remittances. Third, the authors find that in the long-run remittances have a negative relationship with electric power losses and a positive relationship with the consumption of electricity.Practical implicationsFindings from this paper will help to elucidate the relationship between electricity consumption, and electric power losses, and remittances.Social implicationsThe problem of electric power losses is acute in Jamaica and it is mostly due to theft. At the same time, Jamaica receives significant remittances. Social policy could have a role to encourage the use of remittances to help stem the theft of electricity.Originality/valueThis is the first study that examines the relationships between remittances, electricity consumption and electric power losses.

Financial development and economic growth: empirical evidence from India

2015 ◽  
Vol 32 (3) ◽  
pp. 340-356 ◽  
Author(s):  
Madhu Sehrawat ◽  
A K Giri
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Positive Impact ◽  
Annual Data ◽  
Content Type ◽  
Distributed Lag ◽  
Long Run ◽  
Integration Test ◽  
Short Run ◽  
Sustainable Economic Growth

Purpose – The purpose of this paper is to examine the relationship between financial development and economic growth in India using annual data from 1982 to 2012. Design/methodology/approach – The stationarity properties are checked by ADF, DF-GLS, KPSS and Ng–Perron unit root tests. The long- and short-run dynamics are examined by using the autoregressive distributed lag (ARDL) approach to co-integration. Findings – The co-integration test confirms a long-run relationship in financial development and economic growth for India. The analysis of ARDL test results reveals that both bank-based and market-based indicators of financial development have a positive impact on economic growth in India. Hence, the results support the supply-leading hypothesis and highlight the importance of financial development in economic growth. The findings also indicate that the Indian bank-centric financial sector has the potential for economic growth through credit transmission. Research limitations/implications – The present study recommends appropriate reforms in financial markets to attain sustainable economic growth. The findings are useful for policy-makers who want to maintain a parallel expansion of financial development and growth. Originality/value – To date, there are hardly any studies that use both market-based and bank-based indicators as proxies of financial development and analyze their role in economic growth in India. So, the contribution of the paper is to fill this gap in literature.

scholarly journals Re-examining the impact of financial intermediation on economic growth: evidence from Turkey

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ibrahim Nandom Yakubu ◽  
Aziza Hashi Abokor ◽  
Iklim Gedik Balay
Keyword(s):  
Economic Growth ◽  
Financial Intermediation ◽  
Composite Index ◽  
Principal Component ◽  
Annual Data ◽  
Bounds Testing ◽  
Content Type ◽  
Long Run ◽  
Short Run ◽  
The Impact

PurposeThis study seeks to investigate the impact of financial intermediation on economic growth in Turkey using annual data spanning 1970–2017.Design/methodology/approachBased on the results of the augmented Dickey–Fuller and Phillips–Perron unit root tests for stationarity, the authors employ the Autoregressive Distributed Lag (ARDL) bounds testing to cointegration to establish the long-run impact of financial intermediation alongside other control factors on economic growth. The study also examines the short-run relationship between financial intermediation and economic growth by estimating the Error Correction Model (ECM).FindingsThe authors’ findings indicate that financial intermediation significantly influences economic growth in both short and long run. However, the effect is positive only in the short run, lending support to the supply-leading hypothesis. Regarding the control variables, the authors observe that while financial openness shows a positive significant impact on economic growth in the long run, gross fixed capital formation matters only in the short run. The results further infer that regardless of the time period, inflation impedes economic growth.Originality/valueIn the empirical analysis of the relationship between financial intermediation and economic growth, financial intermediation is always measured using a single variable. The authors argue that such studies could produce bias and misleading results given that a single proxy does not adequately reflect financial intermediation activities. Likewise, such findings may delude policy implementation. To provide a more vivid and robust analysis, the authors employ the Principal Component Analysis (PCA) to construct a composite index for financial intermediation based on three broad measures. The researchers’ are unaware of any study on the financial intermediation–economic growth nexus using a composite index of financial intermediation. Thus, this paper fills this lacuna in the literature.

The role of financial development in economic growth: empirical evidence from Indian states

2015 ◽  
Vol 10 (4) ◽  
pp. 765-780 ◽  
Author(s):  
Madhu Sehrawat ◽  
A K Giri
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Ordinary Least Squares ◽  
Annual Data ◽  
Indian States ◽  
Content Type ◽  
Long Run ◽  
Panel Granger Causality ◽  
Integration Test

Purpose – The purpose of this paper is to examine the relationship between financial development and economic growth in Indian states using annual data from 1993 to 2012. Design/methodology/approach – The stationarity properties are checked by Levin-Lin-Chu and Im-Pesaran-Shin panel unit root tests. The study employed the Pedroni’s panel co-integration test to examine the existence of long-run relationship and the coefficients of co-integration are examined by fully modified ordinary least squares. The short term and long-run causality is checked by panel granger causality. Findings – The co-integration test confirms a long-run relationship between financial development and economic growth for Indian states. The results support the supply leading hypothesis and highlight the importance of financial development in economic growth in Indian states. The findings also indicate that bank-centric financial sector of India has the potential of economic growth through credit transmission. Research limitations/implications – The present study recommends for appropriate reforms in financial market to attain economic growth in India. The findings will be useful for India’s policymakers in order to maintain the parallel expansion of financial development and economic growth. Originality/value – Till date, there is no study that includes all 28 states in analyzing the role of financial development in economic growth for Indian economy by applying latest econometric techniques. Further, the study uses gross domestic state product instead of net domestic state product as proxy for economic growth because of the presence of different depreciation rates.

The impact of remittances on Sudan’s economic growth: does the exchange rate matter?

2018 ◽  
Vol 45 (6) ◽  
pp. 925-939
Author(s):  
Atif Awad ◽  
Abdalla Sirag
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Dutch Disease ◽  
Annual Data ◽  
Content Type ◽  
Long Run ◽  
Show Evidence ◽  
Official Rate ◽  
The Exchange Rate ◽  
The Impact

PurposeThe purpose of this paper is to investigate the presence of the Dutch disease hypothesis through examining the remittance-growth nexus using annual data for Sudan covering the period 1977-2015. The paper seeks to answer the following critical questions: what is the impact of remittance on Sudanese economy? How exchange rate influences the impact of remittance on growth? To what extent the impact of remittance on growth differs between the short and long run.Design/methodology/approachThe paper employs the autoregressive distributive lag (ARDL) technique because of its several advantages.FindingsThe ARDL results show evidence against the existence of such a hypothesis. More specifically, the results show that over time, due to the structured nature of the economy, remittances may affect economic growth negatively through several mechanisms including the depreciation rather than the appreciation of the exchange rate.Originality/valueAfter 2011 and the secession of South Sudan, Sudan lost more than 80 per cent of foreign exchange revenues which reflected in the sharp gap between the official rate and the parallel exchange rate equal to 150 per cent. To lessening this gap, the attention was given to expatriates to encourage them to transfer their remittances through official channels. Since remittance and exchange rate mechanism may affect growth positively or negatively, no study addressed this possibility. This is the first empirical study in this matter that considers both the temporary and the permanent impacts.

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.

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