scholarly journals Investigating the Institutional Determinants of Financial Development: Empirical Evidence From SAARC Countries

SAGE Open ◽  
2021 ◽  
Vol 11 (2) ◽  
pp. 215824402110060
Author(s):  
Nazima Ellahi ◽  
Adiqa Kausar Kiani ◽  
Muhammad Awais ◽  
Hina Affandi ◽  
Rabia Saghir ◽  
...  
Keyword(s):  
Regional Cooperation ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Institutional Factors ◽  
Financial Industry ◽  
Legal Origin ◽  
Current Trends ◽  
Institutional Determinants ◽  
Financial Depth ◽  
The Impact

A more regulated and better working financial sector contributes toward achieving monetary growth based on proficient resource allocation and reducing information asymmetries. Current trends in research highlight the significance of factors determining the financial sector’s development; therefore, this study explores the institutional drivers, which are indispensable for developing the financial industry in the South Asian Association of Regional Cooperation (SAARC) region. Specifically, it examines the impact of institutional factors, trade openness, real output, legal origin, and inflation on the financial sector’s development. By employing the panel data method of generalized method of moments (GMM), the study concluded that trade openness, institutional factors, legal origin, and real gross domestic product (GDP) have a positive and significant impact on financial depth. However, the inflation rate has been found to affect it negatively. Finally, the study presents policy recommendations based on empirical findings.

Macroeconomic determinants of trade openness: empirical investigation of SAARC region

2018 ◽  
Vol 12 (2) ◽  
pp. 151-161 ◽  
Author(s):  
Muhammad Tahir ◽  
SAF Hasnu ◽  
Mario Ruiz Estrada
Keyword(s):  
Regional Cooperation ◽  
Labour Force ◽  
Trade Openness ◽  
Least Square Method ◽  
Least Square ◽  
Content Type ◽  
Currency Exchange ◽  
Long Run ◽  
Macroeconomic Determinants ◽  
The Impact

Purpose Trade openness plays a significant role in the growth process of countries. The purpose of this paper is to examine the impact of macroeconomic determinants on the trade openness of countries. Design/methodology/approach The study focuses on the South Asian Association for Regional Cooperation (SAARC) member countries and the data used were from 1971 to 2011. Panel data econometrics techniques and two stages least square method (TSLS) are used to carry out empirical analysis and robustness testing. Findings The main finding of the paper is that macroeconomic determinants such as investment both in physical and human capital and per capita gross domestic product (GDP) positively affect trade openness. Further, the size of labour force and currency exchange rate has also impacted trade openness negatively and significantly. Practical implications It implies that efficient macroeconomic management matters for higher trade openness. The sampled developing countries are suggested to pay favourable attention to macroeconomic variables if they want to grow in the long run through outward-oriented policies. Originality/value This paper is an original contribution in the context of SAARC countries by focusing on the relationship between macroeconomic determinants and trade openness.

scholarly journals Do Financial and Trade Openness Lead to Financial Sector Development in Nigeria?

2016 ◽  
Vol 19 (2) ◽  
pp. 57-68 ◽  
Author(s):  
Abayomi Toyin Onanuga ◽  
Olaronke Toyin Onanuga
Keyword(s):  
Financial Development ◽  
Method Of Moments ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Estimation Method ◽  
Financial System ◽  
Access To Finance ◽  
Global Capital ◽  
Financial Depth ◽  
The World

Abstract With so many countries of the world now open to global capital and trade, this study identifies whether financial and trade openness contribute to the development of Nigeria’s financial system by considering both financial depth and access to finance indicators. To achieve this objective, we applied the Simultaneous Openness Hypothesis as our theoretical framework and the Generalized Method of Moments (GMM) as our estimation method. Our findings reveal that opening trade while neglecting capital (vice versa) may be detrimental to the development of Nigeria financial system. In view of this evidence, we recommend that the simultaneous opening of trade and finance is a more guaranteed way of ensuring improved financial development in Nigeria.

scholarly journals Foreign direct investment to Africa: trends, dynamics and challenges

2012 ◽  
Vol 15 (2) ◽  
pp. 128-141 ◽  
Author(s):  
Elsabe Loots ◽  
Alain Kabundi
Keyword(s):  
Descriptive Analysis ◽  
Trade Openness ◽  
Substantial Contribution ◽  
Fdi Inflows ◽  
Explanatory Variables ◽  
Global Context ◽  
The Past ◽  
Current Trends ◽  
The Impact ◽  
Petroleum Oil

The FDI debate is often characterised by generalities about the importance of these flows within the global context.  This article aims to unpack the African-specific FDI issues in order to get a clearer and more substantiated understanding of the current trends, dynamics and challenges, with emphasis on the period since 2000.  The research concludes that nominal flows to the continent are on the increase, with exponential increases over the past decade.  The descriptive analysis indicates that flows to the continent are unevenly spread and are concentrated in the largest economies and/or in petroleum-/oil-exporting countries.  The impact of FDI on growth and investment in particularly smaller economies indicates that FDI inflows are making a substantial contribution to these economies and illustrates the importance of this source of investment.  The econometric analysis reveals that oil exporters and the size of the economy are powerful explanatory variables in explaining FDI flows to Africa, with trade openness a positive, but less powerful variable.

scholarly journals Trade Openness and Economic Growth in Indonesia

2020 ◽  
Vol 10 (2) ◽  
pp. 163-170
Author(s):  
Khoirul Ifa ◽  
Moh. Yahdi
Keyword(s):  
Economic Growth ◽  
International Trade ◽  
Time Series Data ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Series Data ◽  
Test Results ◽  
Rapid Economic Growth ◽  
The Impact

Economic growth and international trade are related to one another. International trade stimulates long-term economic growth. The more trade activities in a country, the more rapid economic growth; this trade is a key component of development in a country, its contribution is felt with the increasing economic growth in several countries. The purpose of this study looks at the impact of trade openness on economic growth in Indonesia in 1986-2017. This research is a quantitative study using time series data from 1986-2017, research data obtained from the world bank, data analysis techniques using the GMM method to see the impact of trade openness on economic growth. The test results using the Generalized Method of Moments analysis method show that all variables significantly influence the dynamics of economic growth in Indonesia. This result is proven by the t-statistic probability value, which shows a smaller value compared to the t-table value. Then the value also has a probability of less than α. It can be concluded that the variables of trade, FDI, inflation, and the number of workers have a significant effect on economic growth in Indonesia.

Financial integration and macroeconomic volatility: evidence from Asia

2019 ◽  
Vol 35 (2) ◽  
pp. 94-112
Author(s):  
Inder Sekhar Yadav ◽  
Phanindra Goyari ◽  
Ram Kumar Mishra
Keyword(s):  
Financial Integration ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Cross Sectional ◽  
Content Type ◽  
Macroeconomic Volatility ◽  
Advanced Economies ◽  
Asian Economies ◽  
The Impact ◽  
Over Time

Purpose The purpose of this paper is to empirically examine the impact of financial integration on macroeconomic volatility for developing and emerging economies of Asia. Design/methodology/approach The effects of financial integration and dynamics of macroeconomic volatility over time and across different groups of Asian economies vis-à-vis advanced economies are investigated using four different variables such as consumption, output, income and the ratio of consumption to income. Further, an empirical link between the degree of international financial integration and macroeconomic volatility for Asian economies is econometrically investigated using generalized method of moments (GMM) system one-step estimator. Findings Macroeconomic volatilities of per capita output and consumption growth tend to be lower for advanced economies compared to Asian economies. The computed cross-sectional median of the volatility of consumption, output, income and the ratio of consumption volatility to income suggested that the volatility of advanced economies is lower compared to all the regions of Asia. GMM results suggested that the financial openness, trade openness and broad money are negatively and significantly associated with macroeconomic volatility whereas inflation is positively and significantly associated with macroeconomic volatility but the magnitude of trade openness is found to be negligible. Research limitations/implications The present study has not included the effects of other country-specific variables (such as fiscal policy volatility) and other external factors to understand macroeconomic volatility. Practical implications High integration of economies promote economic growth, reduce macroeconomic volatility and reduce vulnerability to external shocks. This implies that policy makers should thrive to reform and create institutional infrastructure to deepen the integration. Originality/value The paper is an important empirical contribution toward examining the effects of financial integration on dynamics of macroeconomic volatility for a large number of Asian developing and emerging economics over time and across different groups using recent data and latest analytical framework and techniques.

scholarly journals Impact of Trade Openness on Food Security: Evidence from Panel Data for Central Asian Countries

Foods ◽  
2021 ◽  
Vol 10 (12) ◽  
pp. 3012
Author(s):  
Zhilu Sun ◽  
Defeng Zhang
Keyword(s):  
Food Security ◽  
Panel Data ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Dynamic Panel Data ◽  
Asian Countries ◽  
Central Asian ◽  
The World ◽  
Central Asian Countries ◽  
The Impact

The problem of food insecurity has become increasingly critical across the world since 2015, which threatens the lives and livelihoods of people around the world and has historically been a challenge confined primarily to developing countries, to which the countries of Central Asia, as typical transition countries, cannot be immune either. Under this context, many countries including Central Asian countries have recognized the importance of trade openness to ensure adequate levels of food security and are increasingly reliant on international trade for food security. Using the 2001–2018 panel data of Central Asian countries, based on food security’s four pillars (including availability, access, stability, and utilization), this study empirically estimates the impact of trade openness and other factors on food security and traces a U-shaped (or inverted U-shaped) relationship between trade openness and food security by adopting a panel data fixed effect model as the baseline model, and then conducts the robustness test by using the least-squares (LS) procedure for the pooled data and a dynamic panel data (DPD) analysis with the generalized method of moments (GMM) approach, simultaneously. The results show that: (1) a U-shaped relationship between trade openness and the four pillars of food security was found, which means that beyond a certain threshold of trade openness, food security status tends to improve in Central Asian countries; (2) gross domestic product (GDP) per capita, GDP growth, and agricultural productivity have contributed to the improvement of food security. Employment in agriculture, arable land, freshwater withdrawals in agriculture, population growth, natural disasters, and inflation rate have negative impacts on food security; and (3) this study confirms that trade policy reforms can finally be conducive to improving food security in Central Asian countries. However, considering the effects of other factors, potential negative effects of trade openness, and vulnerability of global food trade network, ensuring reasonable levels of food self-sufficiency is still very important for Central Asian countries to achieve food security. Our research findings can provide scientific support for sustainable food system strategies in Central Asian countries.

scholarly journals On the determinants of trade openness in low- and lower–middle-income countries in Africa: how important is economic growth?

2019 ◽  
Vol 5 (1) ◽  
Author(s):  
Dennis Boahene Osei ◽  
Yakubu Awudu Sare ◽  
Muazu Ibrahim
Keyword(s):  
Economic Growth ◽  
Low Income ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Low Income Countries ◽  
Special Focus ◽  
Middle Income ◽  
Middle Income Countries ◽  
Real Gdp Per Capita ◽  
The Impact

AbstractThe existing literature highlights the determinants of trade openness with disregard to the income classifications of countries in examining whether the determinants differ given their income levels. This study, therefore, re-examines the drivers of trade openness in Africa relying on panel data with special focus on the role of economic growth. More specifically, we perform a comparative analysis of the factors influencing trade openness for low-income and lower–middle-income countries using the system generalized method of moments. Our findings suggest that, while economic growth robustly enhances openness in low-income countries, in the case of lower–middle-income countries, the impact is not robust and largely negative suggesting that higher growth is associated with less openness. We also find that, economic growth–openness nexus for the lower-income countries exhibits non-linearities and inverted U-shaped relationship in particular. Thus, while increases in real GDP per capita enhance openness, beyond an estimated threshold point, any increases in economic growth dampen openness. We discuss key implications for policy.

scholarly journals Global FDI Inflow and Its Implication across Economic Income Groups

2020 ◽  
Vol 13 (11) ◽  
pp. 291
Author(s):  
Udi Joshua ◽  
Mathew Ekundayo Rotimi ◽  
Samuel Asumadu Sarkodie
Keyword(s):  
Economic Growth ◽  
Fixed Effects ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Income Group ◽  
Ordinary Least Squares ◽  
Business Environment ◽  
Positive Influence ◽  
Panel Estimation ◽  
The Impact

Foreign direct investment (FDI) as a driver of growth is important in today’s globalized economy. It is extremely difficult for economies to grow sustainably without economic interactions outside their borders. However, there has been a debate on the impact of FDI inflow on economic expansion. Hence, this study investigated the influence of FDI on economic growth for a selection of 200 economies around the world for the period 1990–2018. We subdivided the sample into World Bank income group clusters to aid comparison across income blocs. The study employed panel estimation techniques including pooled ordinary least squares (POLS), dynamic panel estimation with fixed-effects and random-effects and generalized method of moments (GMM). The study found that FDI, debt stock and official development assistance are promoters of growth in the selected countries—although debt stock weakly impacts economic growth. In contrast, trade openness and exchange rates had a mixed (negative and positive) influence on economic growth. The study suggests that the creation of a conducive business environment and economic policies will attract FDI inflows. Additionally, borrowing from external sources could be minimized despite its perceived positive influence on growth to achieve financial independence.

scholarly journals Institutional Factors Affecting Women’s Political Engagement

2020 ◽  
Author(s):  
Vera Heuer ◽  
Gabriela Rangel
Keyword(s):  
Gender Gap ◽  
Political Engagement ◽  
Political Activity ◽  
Institutional Factors ◽  
Policy Outcomes ◽  
The Political ◽  
Extensive Literature ◽  
Political Arena ◽  
Institutional Determinants ◽  
The Impact

For decades, women were actively excluded from the political arena. As suffrage expanded around the world, women’s rights activists celebrated a major step toward gender equality in the political arena. Yet the gender gap in political engagement still persists to this day. Although in some countries, women are now found to turn out to vote at rates similar to men (and in industrialized countries, women may even vote at higher rates), they are still less likely to participate in many other types of political activities. Scholars have long investigated the factors influencing women’s political engagement. Early research focused heavily on individual level factors—most often lack of access to resources or informal networks—as determinants of the gender gap. A burgeoning body of literature, however, has identified institutions as an important factor influencing women’s political engagement. Thus this bibliography focuses on those institutional determinants of women’s political engagement defined as any type of political activity that nonelite women take part in. This includes voting, participating in campaigns, and engaging in demonstrations or protests, but also more cognitive aspects of engagement, such as political interest and political knowledge. This bibliography does not focus on the impact of institutions on women’s access or election into political office, as there is extensive literature on institutional determinants and women’s representation, which falls outside of the scope of women’s engagement as nonstate actors. The research outlined here, however, does consider a variety of institutional factors that influence women’s engagement. The bibliography begins by reviewing the literature on how the structures of the political system—including Regime Type, electoral rules, and quotas—impact women’s engagement. It then discusses how institutions can indirectly influence women’s political attitudes and behavior, by reviewing the impact of the composition of institutions on women’s engagement. That section is followed by a set of research that shows how institutional outcomes—namely Policy Outcomes and Institutional Support—influence various forms of political participation, and concludes with examples of nonstate institutions and their impact on women’s engagement.

scholarly journals The impact of taxes effects on the economic growth of developing countries in ASIA

2020 ◽  
Author(s):  
Văn Thuận Nguyễn ◽  
Xuân Hằng Trần ◽  
Minh Hằng Nguyễn ◽  
Thị Kim Chi Ng
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Method Of Moments ◽  
Positive Impact ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Negative Relationship ◽  
Estimation Methods ◽  
Policy Suggestions ◽  
The Impact

The objective of the study is to examine the impact of taxes on economic growth in developing countries in Asia during 18-year period (2000-2017). Using the estimation methods of OLS, FEM, REM, GLS and two-step system generalized method of moments (S-GMM) for panel data. Empirical results show that taxation has a positive impact on economic growth at level of 1%, while the most studies consider this to be a negative relationship. Besides, factors such as government spending, trade openness, inflation also have a significant impact on economic growth. On that basis, the study provides some policy suggestions for tax policies in these countries.

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