Tourism-induced financial development in Malaysia: New evidence from the tourism development index

2018 ◽  
Vol 25 (5) ◽  
pp. 757-778 ◽  
Author(s):  
Muhammad Shahbaz ◽  
Ramzi Benkraiem ◽  
Anthony Miloudi ◽  
Aviral Kumar Tiwari
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Granger Causality ◽  
Financial Development ◽  
Structural Breaks ◽  
Tourism Development ◽  
Real Effective Exchange Rate ◽  
Development Economic ◽  
Causality Analysis ◽  
Bounds Testing

This article explores the relationship between tourism development and financial development by incorporating economic growth and the real effective exchange rate as additional determinants in the finance demand function of the Malaysian economy. Thus, the analysis relies on the bounds testing approach by accommodating structural breaks to examine the cointegration among the variables and investigates the causal direction between the variables by applying the Toda–Yamamoto Granger causality approach. The results show that all the variables are cointegrated over the period from 1975 to 2016; tourism development is positively related to financial development; economic growth is positively linked with financial development; and real exchange rate is negatively associated with financial development. The Granger causality analysis demonstrates the presence of bidirectional causality between tourism development and financial development as well as a unidirectional causal relationship running from financial development and tourism development to economic growth.

Exports, financial development and economic growth in Pakistan

2014 ◽  
Vol 13 (2) ◽  
pp. 155-170 ◽  
Author(s):  
Muhammad Shahbaz ◽  
Mohammad Mafizur Rahman
Keyword(s):  
Economic Growth ◽  
Error Correction ◽  
Financial Development ◽  
Error Correction Model ◽  
Causality Analysis ◽  
Bounds Testing ◽  
Causality Test ◽  
Correction Model ◽  
Content Type ◽  
Long Run

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.

scholarly journals Bank-Based Financial Development and Economic Growth: Time-Varying Causality Analysis for Egypt

2018 ◽  
Vol 10 (4) ◽  
pp. 123
Author(s):  
Amira Akl Ahmed
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Structural Breaks ◽  
Growth Time ◽  
Time Varying ◽  
Causality Analysis ◽  
Causality Test ◽  
Full Sample ◽  
Rolling Window ◽  
The Government

The bootstrap approach to Toda-Yamamoto (1995) modified causality test is applied in a rolling window of fixed size onto Egyptian data during 1960-2016 to examine time-varying links between economic growth (EG) and bank-based financial development (BBFD). Full sample results indicated the existence of unidirectional causality running from BBFD to EG, however; instability tests revealed the presence of structural breaks. Given the misleading inferences made using the full sample, the rolling window procedure is applied. Bidirectional time-varying causality between EG and BBFD was detected. Reasons behind declining the fraction of credit provided to private business sector to GDP in recent years include, mainly, credit crunch and expansion of credit to the government and partially to economic slowdown. Adoption of fiscal reforms and promotion of innovative financial tools suitable for the needs of small and medium-sized enterprises is highly recommended to enhance the role of banking system in promoting economic growth.

scholarly journals Financial Development and Economic Growth: The Case of Greek Economy

2018 ◽  
Vol 1 (2) ◽  
pp. 173
Author(s):  
Pavlos Stamatiou ◽  
Nikolaos Dritsakis
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Financial Development ◽  
Trade Openness ◽  
Cointegration Analysis ◽  
Development Economic ◽  
Causality Tests ◽  
Greek Economy ◽  
Causal Impact ◽  
Using Data

<p><em>This paper examines the relationship among financial development and economic growth, within a framework which also accounts trade openness, for the case of Greece using data covering the period 2001-2017. </em><em>We investigate this relationship using the Johansen and Juselius (1990) cointegration approach and the </em><em>V</em><em>ector </em><em>E</em><em>rror </em><em>C</em><em>orrection </em><em>M</em><em>odels (VECM), employing Granger causality technique, in order to explore the presence of causality among the variables. </em><em>The results of cointegration analysis suggested that there is one cointegrated vector among the functions of financial development, economic growth and trade openness. Granger causality tests have shown that there are unidirectional causalities running from economic growth to financial development as well as from financial development to trade openness. </em><em>The results support that financial development and trade openness do not have causal impact on economic growth in Greece, for the aforementioned period. On the other hand, economic growth has a causal impact on trade both directly and indirectly through financial development.</em><em></em></p>

scholarly journals Exchange Rate Misalignment and Economic Growth in Pakistan: The Role of Financial Development

2020 ◽  
Vol 59 (1) ◽  
pp. 81-99
Author(s):  
Zainab Jehan ◽  
Iffat Irshad
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Financial Development ◽  
Adverse Impact ◽  
Series Data ◽  
Development Economic ◽  
Exchange Rate Misalignment ◽  
The Impact

This study endeavours to examine empirically how real exchange rate (RER) misalignment affects economic growth in Pakistan. In this regard, we have not only estimated the direct impact but also the indirect impact of misalignment on economic growth by using the financial development channel. We have used time series data ranging from 1980 to 2016 to carry out the empirical analysis. After testing the time series properties of the selected variables, we computed long run equilibrium RER later used to calculate RER misalignment. Finally, we estimated the impact of misalignment on per capita economic growth, both direct and indirect. Our results reveal an adverse impact of RER misalignment on economic growth. However, we report that financial development helps in minimising the adverse impact of RER misalignment, though not fully eliminating it. Based on the empirical findings, the study suggests that exchange rate policies need to be managed more cautiously. Moreover, the financial sector development needs to be strengthened which may help in fully alleviating the adverse impact of RER misalignment on economic growth. JEL Classification: F31, GOO, O47 Keywords: Real Exchange Rate Misalignment, Financial Development, Economic Growth, FMOLS

scholarly journals Exploring the effects of hotel development, economic growth and exchange rate on tourism industry

2019 ◽  
Vol 5 (1) ◽  
pp. 81-96
Author(s):  
Bahman Khanalizadeh ◽  
Neda Ranjandish
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Tourism Industry ◽  
Real Effective Exchange Rate ◽  
Development Economic ◽  
International Tourism ◽  
Factors Affecting ◽  
Distributed Lag

The Purpose. This study is to investigate factors affecting the attraction of international tourists to Iran for the years 1983 to 2015. Design/Methodology/Approach. In this article, we examine using Autoregressive Distributed Lag (ARDL) method to explore the estimating the impacts of economic growth, hotel development, real exchange rate on tourism industry. Findings/Implications. The results of this study showed that the effect of all variables hotel development, merchandise trade, real exchange rate and real gross domestic product on international tourism In Iran, in the long-term and short-term positive and also bilateral relationship is between them. Also, the greatest impact on the increase in the number of tourists entering Iran is the real effective exchange rate and real GDP and a very important point that the results of this research show is that the development of hotels can increase both the short and long term of the number of international tourism to Iran, so in this regard, the development of the necessary technologies to increase this industry should be It will be on the agenda of the private and public sector of Iran. Originality. Given the increasing number of international tourists and the growing role of the tourism industry in the economies of the country, identification of effective factors in attracting international tourists is more than necessary. Governments and the private sector need to identify the factors affecting the tourism industry in order to develop, compete and survive in the tourism industry.

scholarly journals MULTIVARIATE GRANGER CAUSALITY BETWEEN CO2 EMISSIONS, ENERGY INTENSITY AND ECONOMIC GROWTH IN PORTUGAL: EVIDENCE FROM COINTEGRATION AND CAUSALITY ANALYSIS

2015 ◽  
Vol 22 (1) ◽  
pp. 47-74 ◽  
Author(s):  
Muhammad SHAHBAZ ◽  
Farooq Ahmed JAM ◽  
Sadia BIBI ◽  
Nanthakumar LOGANATHAN
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Co2 Emissions ◽  
Financial Development ◽  
Unit Root ◽  
Energy Efficient ◽  
Energy Intensity ◽  
Causality Analysis ◽  
Long Run ◽  
Vecm Granger Causality

The present study aims to investigate the relationship between economic growth, energy intensity and CO2 emissions by incorporating financial development in CO2 emissions function using Portuguese annual data over the period of 1971–2011. The unit root problem of variables is examined by applying Zivot-Andrews unit root test and the ARDL bounds testing approach is for long run relationship. The direction of causal relationship between the series is examined by the VECM Granger causality approach and robustness of causality analysis is tested by innovative accounting approach (IAA). Our empirical evidence confirmed that the variables are cointegrated for long run relationship. The results exposed that economic growth and energy intensity increase CO2 emissions, while financial development condenses it. The VECM Granger causality analysis showed the feedback effect between energy intensity and CO2 emissions, while economic growth and financial development Granger cause CO2 emissions. The study suggests that environment degradation can be controlled by using energy efficient technologies. Financial development can also play its role in improving the environmental quality by encouraging investment in energy efficient technology to enhance domestic production and save the environment from degradation.

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

2017 ◽  
Vol 3 (2) ◽  
pp. 50-58 ◽  
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.

The tourism led growth hypothesis: the Lebanese case

2015 ◽  
Vol 70 (1) ◽  
pp. 43-55 ◽  
Author(s):  
Charbel Bassil ◽  
Mohamad Hamadeh ◽  
Nisrine Samara
Keyword(s):  
Economic Growth ◽  
Structural Breaks ◽  
Tourism Development ◽  
Tourism Industry ◽  
Development Economic ◽  
Impulse Response Functions ◽  
Causality Test ◽  
Content Type ◽  
Positive Shock ◽  
Growth Hypothesis

Purpose – The purpose of this paper is to study the direction of the causality between tourism development and economic growth in Lebanon between 1995 and 2013, after taking into consideration terrorist incidents and their intensities. These are considered as exogenous shocks that affect tourism development and economic growth instantaneously and with a lag. Design/methodology/approach – To reach the objectives, the authors estimate a vector auto regressive model with exogenous variables, applying a series of unit root tests with and without structural breaks and the Granger causality test. Findings – The findings suggest a positive unidirectional causality running from tourism development to economic growth in the short run. Thus, the authors find evidence for the tourism-led growth hypothesis (TLGH) in Lebanon despite the exposure of the country to frequent terrorist incidents. The impulse response functions reveal that tourism development (economic growth) responds positively to a positive shock to economic growth (tourism development). Practical implications – The findings call for Lebanese policy makers aiming at promoting growth to design policies that encourage tourism, such as implementing tourism marketing policies and building the needed tourism infrastructure. Such policies will have positive but transitory effects on economic growth. The findings may also be useful for regional representatives of intergovernmental organizations and the offices of statistics of United Nations World Tourism Organization and the World Bank to better understand the tourism industry in Lebanon and similar countries suffering from instabilities. Originality/value – This paper contributes to the existing literature in three points: despite the importance of the tourism industry to the Lebanese economy, this topic did not receive careful attention in the literature; it takes into consideration the presence of structural breaks and possible nonlinearities in the number of tourist arrivals; and it investigates the TLGH after accounting for instability in the country.

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