scholarly journals Inter-state Growth Spillovers in Indian Major States: An Empirical Analysis

2020 ◽  
Vol 9 (1) ◽  
pp. 7-17
Author(s):  
Rittu Susan Varkey ◽  
Prasant Kumar Panda
Keyword(s):  
Service Sector ◽  
Trade Flow ◽  
Panel Cointegration ◽  
Ordinary Least Squares ◽  
Indian States ◽  
Aggregate Output ◽  
Goods And Services ◽  
Long Run ◽  
State Growth ◽  
Inter State

This article verifies the inter-state linkages of economic growth across Indian states in a panel framework. Data have been used for the 15 major states for 1980–1981 to 2013–2014. For studying the long-run association between aggregate output of a state and that of the rest of the states, panel cointegration techniques have been used. Fully modified ordinary least squares estimation technique is used to find long-run coefficients. In addition to it, inter-state growth spillovers of output for three principal sectors of economy have been verified separately. The findings confirm the existence of inter-state association in the long run for the aggregate output as well as the sectoral output. Unidirectional causality runs from rest of the state’s output to a state’s output. There has also been a substantial increase in the extent of linkages after the reforms for the aggregate output. Though coefficient is positive, agricultural output has witnessed a decrease in the extent of linkages after the reforms. But, the linkages among states for industrial and service sector output have been improved as a result of the reforms. With the increasing flow of goods and services, growth spillovers are evident and economic spillovers of states are complementary. Removing barriers on inter-state trade, flow of investment, knowledge, and services will supplement to growth spillover among Indian states.

scholarly journals Panel Econometric Analysis on Mobile Payment Transactions and Traditional Banks Effort toward Financial Accessibility in Sub-Sahara Africa

2020 ◽  
Vol 12 (3) ◽  
pp. 895 ◽  
Author(s):  
Cephas Paa Kwasi Coffie ◽  
Hongjiang Zhao ◽  
Isaac Adjei Mensah
Keyword(s):  
Time Series Data ◽  
Unit Root Test ◽  
Panel Cointegration ◽  
Ordinary Least Squares ◽  
Sustainable Growth ◽  
Series Data ◽  
Mobile Payment ◽  
Cross Sectional ◽  
Mobile Payments ◽  
Long Run

The financial landscape of sub-Sahara Africa is undergoing major changes due to the advent of FinTech, which has seen mobile payments boom in the region. This paper examines the salient role of mobile payments in traditional banks’ drive toward financial accessibility in sub-Sahara Africa by using panel econometric approaches that consider the issues of independencies among cross-sectional residuals. Using data from the World Development Index (WDI) 2011–2017 on 11 countries in the region, empirical results from cross-sectional dependence (CD) tests, panel unit root test, panel cointegration test, and the fully modified ordinary least squares (FMOLS) approach indicates that (i) the panel time series data are cross-sectionally independent, (ii) the variables have the same order of integration and are cointegrated, and (iii) growth in mobile payment transactions had a significant positive relationship with formal account ownership, the number of ATMs, and number of new bank branches in the long-run. The paper therefore confirms that the institutional structure of traditional banks that makes them competitive, irrespective of emerging disruptive technologies, has stimulated overall financial accessibility in the region leading to overall sustainable growth in the financial sector. We conclude the paper with feasible policy suggestions.

The relationship between foreign aid and corruption: a case of selected Asian countries

2019 ◽  
Vol 26 (3) ◽  
pp. 692-704
Author(s):  
Muhammad Ali ◽  
Lubna Khan ◽  
Amna Sohail ◽  
Chin Hong Puah
Keyword(s):  
Least Squares ◽  
Foreign Aid ◽  
Negative Impact ◽  
Panel Cointegration ◽  
Ordinary Least Squares ◽  
Foreign Assistance ◽  
Asian Countries ◽  
Causality Test ◽  
Content Type ◽  
Long Run

Purpose The purpose of this study is to examine the effect of foreign aid (FA) on corruption in selected Asian countries (Pakistan, India, Srilanka and Bangladesh) using the panel data from 2000 to 2014. Design/methodology/approach The author used Levin-Lin-Chu and Im-Pesaran-Shin panel unit root tests to check the stationary properties of the variables. The Pedroni’s and Kao panel cointegration approach was applied to analyze the variable’s long-run relationship. The author used panel dynamic ordinary least squares (PDOLS) and fully modified ordinary least squares (FMOLS) framework to estimate the coefficients of cointegrating vectors. Additionally, the panel granger causality test was performed to check the causal relationship between the variables. Findings The results from PDOLS and FMOLS indicate that FA has a significant negative impact on the level of corruption. This infers that the foreign assistance decrease the level of corruption perception index, hence, more corruption in the country. Originality/value Overall, the study fulfills the need to understand the aid-corruption nexus, particularly in the case of the Asian region.

scholarly journals Trade and economic development: global causality and development- and openness-related heterogeneity

2020 ◽  
Vol 17 (4) ◽  
pp. 923-944
Author(s):  
T. Gries ◽  
M. Redlin
Keyword(s):  
Economic Development ◽  
Trade Openness ◽  
Panel Cointegration ◽  
Ordinary Least Squares ◽  
Development Stage ◽  
Long Run ◽  
Short Run ◽  
Method Of Moments Estimation ◽  
General Method Of Moments ◽  
High Degree

Abstract This paper reconsiders the classic relationship between trade and economic development. We examine the short-term and long-run dynamics between trade and income for 167 countries over the period 1970–2011 and assume that the effect is not homogenous for all countries but rather varies according to the development stage and the degree of trade openness. We apply panel cointegration, Granger causality and panel error correction in combination with Dynamic Ordinary Least Squares and General Method of Moments estimation to explore the causal relationship between these two variables. The results suggest a statistically significant positive short-run and long-run global relationship between trade and income. However, when splitting the panel into different income and trade openness groups, a long-run relationship is observed only for high-income countries and countries with a relatively high degree of trade openness.

Testing for the Marshall–Lerner condition in Egypt: an empirical analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
John Adams ◽  
Ali Metwally
Keyword(s):  
Trade Balance ◽  
Empirical Work ◽  
Ordinary Least Squares ◽  
Real Effective Exchange Rate ◽  
Content Type ◽  
Goods And Services ◽  
Interest Rate Spread ◽  
Long Run ◽  
Relevant Variables ◽  
Effective Exchange

PurposeThe purpose of this paper is to examine to what extent evidence can be found for the presence of the Marshall–Lerner (ML) condition regarding the trade balances of Egypt. The theoretical basis of the ML is presented and then tested using Egyptian trade data from 1965 to 2017.Design/methodology/approachThe data are analysed via standard ordinary least squares models subject to the constraints imposed by economic theory, specifically ML theory, in which the coefficients represent elasticities. A range of tests are undertaken to establish the validity of the models and the model results including multicollinearity, unit root and co-integration in order to avoid spurious regressions.FindingsThe export model strongly suggests that real exports of Egyptian goods and services are elastic with respect to changes in the real effective exchange rate (REER), with a coefficient weight of −1.64 and is significant at 1%. However, for the import model the coefficient weight of the REER −1.17 and is significant at 1%. This result contradicts ML theory, where an increase in the REER makes imports cheaper and thus causes them to increase.Research limitations/implicationsThe limitations of the study are two in particular, the first is that the frequency of the data employed is annual, not monthly or even quarterly, which means that the sample size would have been larger, and the estimated parameters could have been more accurate in forecasting the future behaviour of exports and imports. There could be several other indicators that might have clear impacts on exports and imports. In other words, it is possible that a model with consumer spending and government spending as well as terms of trade, inflation, interest rate spread and taxes is going to capture more of the variation that occurs in Egypt's trade balance components.Practical implicationsThe results suggest that the Egypt-International Monetary Fund plan (depreciation) is likely to have a positive effect on the economy. However, this does not mean that the deficit of the trade balance is going to change into a surplus once the policies of the plan are fully applied, but it does mean the deficit will reduce. Only in the long run is the trade balance likely to record a sustainable surplus. But the latter will heavily depend on the structure of exports and imports and maintaining price stability, both of which are key government policy areas.Originality/valueThe paper builds on previous theoretical and empirical work in this field and in particular is focussed on Egypt. There are extremely few analyses of the ML condition regarding Egypt. This paper provides new information on this and can also be utilized by researchers to further develop the analysis and method through identification of other potentially relevant variables within a single country ML study.

The long-run relationships between energy efficiency and environmental performance: Global evidence

2017 ◽  
Vol 28 (7) ◽  
pp. 706-724 ◽  
Author(s):  
Jing Niu ◽  
Chun-Ping Chang ◽  
Xiu-Yun Yang ◽  
Jun-Sheng Wang
Keyword(s):  
Energy Efficiency ◽  
Error Correction ◽  
Causal Relationship ◽  
Environmental Performance ◽  
Panel Cointegration ◽  
Developed Countries ◽  
Ordinary Least Squares ◽  
Long Run ◽  
Recent Climate

Owing to recent climate change concerns, the interaction between energy and environmental governance has received greater attention. Therefore, this study investigates the causal relationship between energy efficiency and environmental performance for 129 countries, using the panel cointegration and panel-based error correction models for the period 2002–2012. Our results corroborate that there exists a long-term equilibrium cointegrating relationship between energy efficiency and environmental performance, and that the panel fully modified ordinary least squares estimations present a positive relationship between variables. In accordance with the panel vector error correction model estimation, evidence confirms a bi-directional causal relationship among variables for the long term in the given sample of 129 countries. In addition, the sub-samples’ analyses present causalities running from energy efficiency to environmental performance in the long run, no matter for Organisation for Economic Co-operation and Development (OECD) or non-OECD countries, but a short-run relationship is seen only in OECD members. Evidence also shows an absence of causal direction from environmental performance to energy efficiency in both groups of countries. The policy implication is that an improvement in environmental quality should be based on promoting energy efficiency. However, given that energy efficiency still has not achieved improvement under strong environmental performance, this is a big challenge that cannot be avoided for both developing and developed countries. We also offer several constructive suggestions for how to promote energy efficiency.

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.

Inter-sectoral Growth Linkages and Their Implications for Agriculture: Evidence from Indian States

2018 ◽  
Vol 9 (3) ◽  
pp. 262-277 ◽  
Author(s):  
Rittu Susan Varkey ◽  
Prasant Kumar Panda
Keyword(s):  
Service Sector ◽  
The State ◽  
Indian States ◽  
Data Set ◽  
Agricultural Output ◽  
Long Run ◽  
Equilibrium Relationship ◽  
Sectoral Growth ◽  
The Impact ◽  
Long Run Equilibrium

This article empirically examines the existence of inter-sectoral growth linkages among the key sectors of the Indian economy at the state level. The examination evaluates the impact of the non-agricultural sectors of the states and that of the rest of the states on agricultural output of a particular state. An annual panel data set for 15 general category states have been taken for the period 1980–1981 to 2012–2013. Panel cointegration and fully modified ordinary least square methods have been used to study the existence of a long-run equilibrium relationship between sectors. The results suggest that there is a long-run equilibrium relationship among three sectors of the economy in the Indian states. The evaluation indicates that the industrial sector contributes positively in complementing the growth of agriculture, but the service sector advancement affects agricultural growth negatively. However, services having some direct reference to agriculture such as transport, storage and communication (TSC), trade, hotel and restaurant (THR) and banking and insurance (BI) have positive linkage with agriculture. The state specific econometric evaluation of the agricultural output varies relatively across different states, for example, in Kerala, the impact of rest of the industries and services leaves a positive significance; whereas, the study foresees the negative impact of industry and services in the states such as Bihar, Madhya Pradesh, Orissa and Rajasthan. In order to neutralize the negative linkages of service sector on agriculture, policies for promoting pro-agricultural services such as crop and agricultural insurance, agricultural loans, facilities for agricultural warehouse, marketing services, weather communication, transport services and provision of technical support to farm activities are important. Such initiatives can help agricultural sector grow along in the simultaneous development of sectors propelling growth of the economy at a faster rate.

scholarly journals The Role of Energy Consumption, Economic Growth and Globalization in Environmental Degradation: Empirical Evidence from the BRICS Region

2021 ◽  
Vol 13 (4) ◽  
pp. 1924
Author(s):  
Habib Ur Rahman ◽  
Umer Zaman ◽  
Jarosław Górecki
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Least Squares ◽  
Environmental Degradation ◽  
Carbon Emission ◽  
Panel Cointegration ◽  
Ordinary Least Squares ◽  
Kuznets Curve ◽  
Annual Data ◽  
Long Run

This paper examines the effect of energy consumption, globalization, and economic growth on the CO2 emission of the BRICS (Brazil, Russian Federation, India, China and South Africa) region. Using annual data from 1989 to 2019, this research applies a panel cointegration approach. In this framework, we use Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) methods to examine the long-run relationship between the selected variables. This empirical investigation reveals that there is a long-run association between these variables, and energy consumption positively and significantly affects the carbon emission in these countries. These results indicate that energy consumption is the primary source of environmental degradation in the region. In contrast, the globalization (KOF Index of Globalization) negatively and significantly affects the carbon emission, implying the improvement of environmental quality. Further, this research could not find the presence of environmental Kuznets curve in the region. Policy guidelines are suggested in the line of findings.

Economic growth, public expenditure on health and IMR in India

2017 ◽  
Vol 44 (12) ◽  
pp. 2002-2018 ◽  
Author(s):  
Subhalaxmi Mohapatra
Keyword(s):  
Economic Growth ◽  
Health Outcomes ◽  
Health Expenditure ◽  
Public Expenditure ◽  
Panel Cointegration ◽  
Time Frame ◽  
Infant Mortality Rate ◽  
Indian States ◽  
Content Type ◽  
Long Run

Purpose The purpose of this paper is to employ a two-step approach to investigate the bi-directional causal linkage between: economic growth (measured by GDP) and public expenditure on health; public expenditure on health and infant mortality rate (IMR); and economic growth and IMR in the Indian context. Design/methodology/approach The present study uses econometric analysis, namely, panel cointegration and Granger causality on 20-year panel data on 16 major Indian states to investigate the causality. Findings The results suggest GDP to Granger cause public expenditure on health both in the short run and in the long run, but public expenditure on health to Granger cause GDP only in the long run. Further, public expenditure on health and economic growth were found to Granger cause IMR in the long run. However, the reverse linkage from IMR to public expenditure on health and/or economic growth was not significant. Research limitations/implications The present study provides support to the existing literature on the effects of economic growth on health expenditure and health outcomes but also raises a question on the time required to realize the same. Practical implications The findings have implications for policy makers on the time frame and application of health expenditure to achieve better results. Originality/value The present study is one of the first to test the tripartite linkage between economic growth, public health expenditure and health outcomes at a state-level analysis.

scholarly journals Determinants Of Savings In The SADC Region: The Role Of Foreign Capital And Financial Development

2015 ◽  
Vol 31 (6) ◽  
pp. 2107 ◽  
Author(s):  
Forget Mingiri Kapingura ◽  
Sylvanus Ikhide ◽  
Asrat Tsegaye
Keyword(s):  
Financial Development ◽  
Foreign Capital ◽  
Panel Cointegration ◽  
Financial Sector ◽  
Ordinary Least Squares ◽  
Financial Deepening ◽  
Financial Flows ◽  
Financial Sector Development ◽  
Long Run ◽  
Domestic Savings

The study examines the determinants of savings in the SADC region, mainly focusing on the roles played by external financial flows and financial development in mobilising domestic savings utilising panel cointegration method and the Dynamic ordinary Least Squares (DOLS) approach from 1980 to 2009. Following the review of literature, the empirical model adopted established that there is a long-run relationship between the variables of interest. The results indicate that income, proxied with GDP, financial sector development and foreign capital have a positive relationship with savings. The results also suggest that financial sector development has played a very important role in influencing savings in the region. However on the other hand the results indicate that interest rate and dependency ratio have influenced savings negatively. The empirical results support the hypothesis that foreign savings bridges the gap between domestic demand and supply of finance in the SADC countries. There is need to attract more foreign capital given that it compliments domestic savings. At the same time policies aimed at financial deepening should still be pursued to further deepen the financial system in the SADC countries to further enhance savings. 

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