Does Financial Development Raise Tourism Demand? A Cross-Country Panel Evidence

2021 ◽  
pp. 109634802110607
Author(s):  
Rupika Khanna ◽  
Chandan Sharma
Keyword(s):  
Financial Development ◽  
Dependence Structure ◽  
Annual Data ◽  
Tourism Demand ◽  
Stock Market Development ◽  
Development Indicators ◽  
Theoretical Contribution ◽  
Tourism Expenditure ◽  
Using Data ◽  
Country Specific

This study examines the effects of bank and stock market development on three tourism demand indicators: number of tourist arrivals, expenditure to gross domestic product ratio, and expenditure per arrival. We analyze annual data spanning the period 1995-2018 for a sample of 207 countries. The theoretical contribution of this study is threefold: first, we assess a variety of financial development indicators; second, we employ cross-sectionally augmented distributed lags estimator that produces estimates robust to the dependence structure in the data; third, using data on a wide assortment of countries, we generalize the findings of several country-specific case studies. We observe that financial development affects both tourist arrivals and tourism expenditure positively. However, the gains in tourist arrivals are more significant relative to those in tourism expenditure. Furthermore, we find the responsiveness of tourism demand to financial development to vary with the income level.

scholarly journals Direction of Causality between Financial Development and Economic Growth in Turkey

2021 ◽  
pp. 22-37
Author(s):  
Cengiz Yılmaz ◽  
Banu Demirhan
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Gross Domestic Product ◽  
Financial Development ◽  
The Other ◽  
Development Indicators ◽  
Short Run ◽  
Causality Relationship ◽  
Using Data

This paper has investigated the causality relationship between financial development and economic growth in Turkey, using data from 2005:04 to 2020:03. We construct a time-series model to explore causality relationships between the variables. In the study, two indicators were used as financial development indicators: banking loans to the private sector and money supply to GDP (Gross Domestic Product). The empirical results have represented a bi-directional relationship between financial development and economic growth in the short run. On the other hand, we have not found a causality relationship in the long term.

scholarly journals Is Tourism and Energy Consumption Linked? Evidence from Australia

2021 ◽  
Vol 13 (19) ◽  
pp. 10800
Author(s):  
Avishek Khanal ◽  
Mohammad Mafizur Rahman ◽  
Rasheda Khanam ◽  
Eswaran Velayutham
Keyword(s):  
Energy Consumption ◽  
Gross Domestic Product ◽  
Financial Development ◽  
Primary Energy ◽  
Domestic Product ◽  
Development Indicators ◽  
Distributed Lag ◽  
Long Run ◽  
Using Data ◽  
Australian Bureau Of Statistics

Tourism contributes to the growth of an economy via earning foreign currencies and employment opportunities. However, tourism also contributes to greater energy consumption because of various tourist activities such as hotel accommodations and transportation. This study investigates the long-term cointegrating relationship between international tourist arrivals and primary energy consumption in Australia. In addition, the roles of gross domestic product, gross fixed capital formation, financial development, and total population on energy consumption are also examined. The study covered the last four decades (1976–2018) using data from the Australian Bureau of Statistics, BP Statistical Review, and the World Development Indicators. Augmented Dickey-Fuller, Phillips-Perron, Autoregressive distributed lag (ARDL) bound tests, Johansen and Juselius, Bayer-Hanck cointegration test, and several key diagnostic tests have been conducted to assess the relationship. The estimated results indicate that tourist arrivals, gross domestic product, and financial development have a significant long-run cointegrating relationship with energy consumption. Policy measures are suggested based on the findings of this study.

scholarly journals Long-Run Relationship Between Economic Development and International Tourism in Pakistan

2020 ◽  
Vol 6 (2) ◽  
pp. 329-344
Author(s):  
Muhammad Asif Khan ◽  
Ghulam Mujtaba Chaudhary ◽  
Khalid Latif ◽  
Naveed Ahmed
Keyword(s):  
Economic Development ◽  
Policy Implications ◽  
International Tourism ◽  
Annual Data ◽  
Short Term ◽  
Stock Market Development ◽  
Development Indicators ◽  
Distributed Lag ◽  
Long Run

This article examines the link between economic development and international tourism in the context of Pakistan. The study uses Autoregressive Distributed Lag tests (ARDL) for the long-term relationship; the short-term relationship is examined with Error Correction model, and the VECM-Granger causality to determine the direction of the causal flow. The study uses annual data from the CEIC and World Bank databases for the period 1990-2017. The novelty stems from the perspective that there is no formal evidence on long-run dynamics between economic development indicators and international tourism from Pakistan. It contributes to the existing literature on this vital phenomenon. The empirical results document the long-term and short-term association between the variables. We also find a two-way causal flow between economic development and tourism. In addition, it offers policy implications for focusing on three economic dimensions, e.g. economic development, financial development, and stock market development, which subsequently attracts international tourism. Intuitively, promulgates National culture and image across borders and strengthens the National Treasury as well.

scholarly journals External debt stock, foreign direct investment and financial development

2019 ◽  
Vol 27 (1) ◽  
pp. 81-98
Author(s):  
Daniel Agyapong ◽  
Kojo Asare Bedjabeng
Keyword(s):  
Foreign Direct Investment ◽  
Financial Development ◽  
Direct Investment ◽  
External Debt ◽  
Financial Sector ◽  
Annual Data ◽  
Method Of Moment ◽  
Content Type ◽  
Development Indicators ◽  
High Level

Purpose The purpose of this paper is to examine the role external debt and foreign direct investment play in influencing financial development in Africa. Design/methodology/approach Annual data on external debt, foreign direct investment and financial development were extracted from the World Bank World Development Indicators from 2002 to 2015. The data employed were analysed within causal research design and the dynamic panel using generalized method of moment estimation approach. Findings The findings revealed that external debt and foreign direct investment have a significant positive relationship with financial development in African economies. Governments of the sampled economies should enact policies that would help attract high level of foreign direct investment as it contributes positively to financial development. Finally, governments of the sampled African economies should ensure foreign direct investment and external funds borrowed are channelled to productive sectors. Originality/value The paper analysed the relationship between external debt, FDI inflows and financial sector development. The paper is the first in terms of such analysis within the framework of the dual-gap framework, which is the first time in these kinds of studies. Previous studies have concentrated on the effect of financial sector on FDI and not the other way around.

scholarly journals Financial development and economic growth: panel evidence from BRICS

2019 ◽  
Vol 24 (47) ◽  
pp. 113-126 ◽  
Author(s):  
Biplab Kumar Guru ◽  
Inder Sekhar Yadav
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Financial Development ◽  
Banking Sector ◽  
Market Development ◽  
Content Type ◽  
Stock Market Development ◽  
Development Indicators ◽  
Banking Sector Development ◽  
The Relationship

Purpose The purpose of this paper is to examine the relationship between financial development and economic growth for five major emerging economies: Brazil, Russia, India, China and South (BRICS) during 1993 to 2014 using banking sector and stock market development indicators. Design/methodology/approach To begin with, the study first examined some of the principal indicators of financial development and macroeconomic variables of the selected economies. Next, using generalized method of moment system estimation (SYS-GMM), the relationship between financial development and growth is investigated. The banking sector development indicators used in the study include size of the financial intermediaries, credit to deposit ratio (CDR) and domestic credit to private sector (CPS), whereas the stock market development indicators are value of shares traded and turnover ratio. Also, some macroeconomic control variables such as inflation, exports and the enrolment in secondary education were used. Findings The examination of the principal indicators of financial development and macroeconomic variables have shown considerable differences between the selected economies. Results from the dynamic one-step SYS-GMM estimates confirm that in presence of turnover ratio, all the selected banking development indicators such as size of financial intermediaries, CDR and CPS are positively significantly determining economic growth. Similarly, in presence of all the selected banking sector development indicators, value of shares traded is found to be positively significantly associated with economic growth. However, the same is not true when turnover ratio is regressed in presence of banking sector variables. Overall, the evidence suggests that banking sector development and stock market development indicators are complementary to each other in stimulating economic growth. Practical implications A positive association between financial development and growth indicates that the policymakers should take necessary measures toward simultaneous development of both banking sector as well as stock market for inducing growth. Originality/value The present paper attempts to examine the relationship between financial development and growth using both banking sector and stock market development indicators which has not been attempted before for BRICS. Also, most of the existing studies are found in case of developed economies. This paper tries to fill this void by studying five major emerging economies.

Financial Development, Institutions, Gender and Entrepreneurship in the United Arab Emirates

2021 ◽  
Vol 11 (2) ◽  
pp. 11-22
Author(s):  
Afra Hameli ◽  
Ilias Kampouris ◽  
Amal Kamal Machaal ◽  
Charilaos Mertzanis
Keyword(s):  
Financial Development ◽  
United Arab Emirates ◽  
Macroeconomic Conditions ◽  
Development Indicators ◽  
Business Startup ◽  
Financial Depth ◽  
Development Institutions ◽  
New Business ◽  
Using Data ◽  
The Impact

The paper explores the role of financial development on entrepreneurship in the United Arab Emirates by using data on new business registration and new business density over the period 2006-2018. The country is undergoing a rapid transformation phase characterizzed by substantial efforts to boost private sector entepreneurship. The data is drawn from the World Bank’s World Development Indicators. We use the International Monetary Fund’s composite financial development index to capture financial development in the country. The index comprises information on financial depth, access and efficiency by both financial institutions and markets. The paper controls for the impact on the macroeconomic conditions, institutional factors, such as gender equality and the fear of failure, the innovation environment and the business startup environment. The results show that financial development is a robust predictor of entepreneurial activity in the UAE. Macroeconomic, institutional and innovation conditions further mediate the link in more or less significant ways.

The relationship between financial development indicators and human development in India

2014 ◽  
Vol 41 (12) ◽  
pp. 1194-1208 ◽  
Author(s):  
Madhu Sehrawat ◽  
A.K. Giri
Keyword(s):  
Human Development ◽  
Financial Development ◽  
Decomposition Analysis ◽  
Variance Decomposition ◽  
Annual Data ◽  
Content Type ◽  
Development Indicators ◽  
Long Run ◽  
The Impact ◽  
The Relationship

Purpose – The purpose of this paper is to examine the relationship between financial development indicators and human development in India using annual data from 1980-2012. Design/methodology/approach – The Ng-Perron unit root test is used to check for the order of integration of the variables. The long run relationship and short run dynamics are examined by implementing the ARDL bounds testing approach to co-integration. Granger’s non-causality test and variance decomposition techniques are also used to examine the impact of financial development indicators on human development. Findings – The results confirm a long run relationship among the variables. The results of granger non causality indicate that unidirectional causality runs from financial development indicators to human development index (HDI). The variance decomposition analysis shows that among all the financial indicators, broad money supply (M3) has the largest contribution to changes in human development in India. Research limitations/implications – The present study recommends for appropriate reforms in financial market to attain sustainable human development in India. The findings will be useful for India’s policy makers, in order to maintain the parallel expansion of financial development and human development. Originality/value – This paper is first of its kind to empirically examine the casual relationship between financial development indicators and human capital development proxied by HDI in India by using modern econometric techniques.

Tribalism and Finance

2021 ◽  
pp. 026010792110334
Author(s):  
Oasis Kodila-Tedika ◽  
Simplice A. Asongu
Keyword(s):  
Stock Market ◽  
Financial Development ◽  
Middle Eastern ◽  
Financial Intermediary ◽  
Stock Market Development ◽  
Domestic Credit ◽  
Short Run ◽  
Using Data ◽  
Market Capitalisation

We assess the correlations between tribalism and financial development in 60 countries using data averages from 2000 to 2010. The tribalism index is used to measure tribalism whereas financial development is measured from perspectives of financial intermediary and stock market developments. The long-term finance variable is stock market capitalisation while short-run variable is private and domestic credit. We find that tribalism is negatively correlated with financial development and the magnitude of negativity is higher for financial intermediary development relative to stock market development. The findings are particularly relevant to African and Middle Eastern countries where the scourge of tribalism is most pronounced. JEL: E62, H11, H20, G20, O43

scholarly journals Impact of institutional environment on financial development: a literary review

2021 ◽  
Vol 2021 (3) ◽  
pp. 57-71
Author(s):  
Kerimov Pavlo ◽  
◽  
Keyword(s):  
Financial Development ◽  
Institutional Environment ◽  
Financial System ◽  
Institutional Development ◽  
Developed Countries ◽  
Operational Effectiveness ◽  
Development Indicators ◽  
Research Perspectives ◽  
To Come ◽  
Using Data

This literary review is focused on outlining approaches to institutional environment and financial development nexus, described in modern Western literature. Its existence is necessitated by the insufficient use of such sources in domestic studies on the subject, which results in inconsistencies in categorical apparatus, methodic approaches and of acquired results. The review is limited to practical Western studies with sufficient statistical apparatus and is concentrated on their choice of representative variables, expected and factual interrelations between said variables and on plausibility of their results. Based on the reviewed literature, it was possible to come up with a number of conclusions, such as: lack of general theoretical model of institutional-financial development nexus behind reviewed regression models; insufficiency of narrowly defined financial depth index to represent financial development as a whole, and need to compliment it with financial institutions’ operational effectiveness indicators, as well as other financial system components’ resource potential indicators, and recipients’ access to financial resources indicators; limitation of currently available institutional development indicators to two sets, both of which are expert-defined aggregated indicators; existence of substantial difference in factors of institutional development influencing financial system in developed and underdeveloped countries. Also, some of the further research perspectives are outlined, such as examining institutional-financial development nexus using PCA-aggregated extended financial development indicators, and researching institutional-financial development nexus using data envelopment analysis based on the statistical data on developed countries.

The Nexus between Financial Development and Human Development: The Case of Developing Countries

2020 ◽  
Vol 8 (2) ◽  
pp. 68
Author(s):  
Bilgehan Tekin
Keyword(s):  
Developing Countries ◽  
Private Sector ◽  
Human Development ◽  
Financial Development ◽  
Cointegration Analysis ◽  
Annual Data ◽  
Causality Analysis ◽  
Development Index ◽  
Development Levels ◽  
The Relationship

The purpose of this study to examine the relationship between financial development and human development in the health and welfare dimensions of developing countries. This study aims to determine whether the financial developments of the countries have an effect on the basic human development of the individuals and whether human development indicators have an impact on financial development. In this study, the relationship between financial development and human development has been tried to be revealed by using data obtained from developing countries. Financial development levels of the countries were measured with the developed financial development index. The index is calculated by using M3 / GDP, private sector loans / GDP and loans to banks from private sector / GDP ratios. The human development index is calculated by considering various health indicators and GNP per capita. The data includes annual data for the period 1970-2016. Pedroni and Kao cointegration analysis and Dumitrescu & Hurlin panel causality analysis were performed in the study. According to the results of the study, the cointegration relationship was determined between the two variables. There is also a two-way causality between the variables.

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