Energy consumption, human capital investment and economic growth in South Africa: a vector error correction model analysis

Purpose The development in information communication and technology (ICT) has led to many changes such as reorganization of economics, globalization and trade. With more innovation processes being organized and adopted across technologies, trade, etc., these are getting more closely related and needs fresh research perspective. This study aims to empirically investigate the interrelationship between ICT penetration, innovation, trade and economic growth in 20 developed and developing nations from 1995 to 2018. Design/methodology/approach The present paper examines both long-run and short-run relationships between the four variables, namely, innovation, ICT penetration, trade and economic growth, by applying panel estimation techniques of regression and vector error correction model. ICT penetration and innovation indices are constructed using principle component analysis technique. Findings The findings of the study highlight that for developed nations, growth, trade and innovation are significantly interlinked with no significant role of ICT penetration While for developing nations, significant relationship is present between growth and trade, ICT penetration and innovation. With respect to trade, in case of developed nations, significant relationship is present with ICT penetration. While for developing nations there is no significant result for trade promotion. On further employing the vector error correction model, the presence of short run causality between growth, trade and innovation in case of developed nations is established but no such causality between variables for developing nations is seen. Originality/value The present paper adds to the existing strand of literature examining interlinkage between innovation and growth by introducing new variables of ICT penetration and innovation.

Download Full-text

Impact of conventional banking financing and Islamic banking financing on economic growth 2008-2018

Jurnal Ekonomi Syariah Teori dan Terapan ◽

10.20473/vol6iss20196pp1272-1286 ◽

2020 ◽

Vol 6 (6) ◽

pp. 1272

Author(s):

Hasymi Nur Baehaqy ◽

Eko Fajar Cahyono

Keyword(s):

Economic Growth ◽

Error Correction ◽

Significant Relationship ◽

Sampling Technique ◽

Error Correction Model ◽

Islamic Banking ◽

Vector Error Correction Model ◽

Correction Model ◽

Vector Error Correction ◽

Vector Error

This research aims to know Impact of conventional banking financing and Islamic banking financing on economic growth 2008-2018. In this study the authors used a saturated sampling technique found in Non-Probability Sampling. The analysis technique used is VECM (Vector Error Correction Model). Based on the results of the study indicate that there is a one-way relationship on several variables, namely Conventional Banking Financing to GDP and Conventional Banking Financing to Islamic Banking Financing, In the long run, Conventional Banking Financing has a positive and significant relationship to GDP, whereas Islamic Banking Financing has a negative and significant relationship to GDP.Keywords: Banking Financing, Economic Growth, GDP (Gross Domestic Product), VECM (Vector Error Correction Model)

Download Full-text

Financial Development and Energy Consumption in Sub-Saharan Africa: Evidence From Panel Vector Error Correction Model

SAGE Open ◽

10.1177/2158244020935432 ◽

2020 ◽

Vol 10 (3) ◽

pp. 215824402093543

Author(s):

Chigozie Nelson Nkalu ◽

Samuel Chinwero Ugwu ◽

Fredrick O. Asogwa ◽

Mwuese Patricia Kuma ◽

Queen O. Onyeke

Keyword(s):

Energy Consumption ◽

Error Correction ◽

Granger Causality ◽

Financial Development ◽

Sub Saharan Africa ◽

Vector Error Correction Model ◽

Correction Model ◽

Vector Error Correction ◽

Vector Error ◽

Sub Saharan

This study examines the nexus between financial development and energy consumption/use in Sub-Saharan Africa (SSA) using a panel vector error correction model (VECM), cointegration, and Granger causality tests over the period ranging from 1975 to 2017. The annual panel time-series data generated from the World Bank database were tested for unit-roots processing using both the Levin–Lin–Chu and Im–Pesaran–Shin before proceeding to Johanson cointegration technique, the results of which motivated the choice of adopting the panel VECM rather than panel vector autoregression in the methodology. From the estimation result especially on the variables of interest, there exists a positive and statistically significant relationship between financial development and energy consumption in the long run, but not statistically significant in the short run. Further findings from the panel Granger causality test shows a unidirectional causality running from financial development to energy consumption, gross domestic product per capita, population growth to urbanization with no feedback. Among a series of policy recommendations, the monetary authorities in Sub-Saharan African countries should ensure optimal utilization of financial instruments and technologies available in the system to enhance more robust financial development to boost efficiency in energy consumption in the region in line with the sustainable growth theory.

Download Full-text