scholarly journals Verification of the relationship between FDI and GDP in Poland

2016 ◽  
Vol 66 (2) ◽  
pp. 307-332 ◽  
Author(s):  
Aneta Kosztowniak
Keyword(s):  
Decomposition Analysis ◽  
Correction Method ◽  
Gdp Growth ◽  
Domestic Investment ◽  
Fdi Inflows ◽  
Vector Error Correction ◽  
Vector Error ◽  
Variance Decomposition Analysis ◽  
The Impact ◽  
The Relationship

The paper analyses the impact of the factors of production on economic growth in Poland in the years 1992–2012, with particular focus on the impact of foreign direct investment (FDI), and strives to verify whether a causality relationship occurred between GDP and FDI, i.e. whether high GDP dynamics attracted FDI inflows and whether this investment contributed to GDP growth. The Vector Error Correction Method impulse responses and variance decomposition analysis confirmed the bi-directional relationships between FDI and GDP in Poland. However, the impact of GDP on attracting FDI inflows to Poland is stronger than that of FDI on GDP growth. Polish developmental policy should concentrate on three essential determinants (pillars) of growth, namely employment growth, attracting FDI (with emphasis on improvement in the type of inflowing investment), and increasing the value and productivity of domestic investment.

scholarly journals TAX REVENUE AND ECONOMIC GROWTH NEXUS: EMPIRICAL EVIDENCE FROM THE NIGERIAN ECONOMY

2020 ◽  
Vol 4 (2) ◽  
Author(s):  
Olabode Agunbiade ◽  
Alesanmi Abraham Idebi
Keyword(s):  
Economic Growth ◽  
Decomposition Analysis ◽  
Variance Decomposition ◽  
Tax Revenue ◽  
Gdp Growth ◽  
Tax System ◽  
Variance Decomposition Analysis ◽  
The Impact ◽  
The Relationship ◽  
Direct Tax

<p>This paper examined the relationship between tax revenue and economic growth in Nigeria over 1981–2019 period, with special focus on Companies Income Tax, Value Added Tax and Petroleum Profits Tax. The data were sourced from the National Bureau of Statistics (NBS) and the Federal Inland Revenue Service (FIRS). The study employed the Vector Error Correction Model (VECM) to establish the nature and strength of the relationship between taxation and economic growth. The Johansen test of cointegration reveals that there is at least one cointegrating equation in the long-run between the variables. Granger causality test found a causal relationship among Real GDP and the different tax components. The impulse response functions and the variance decomposition analysis uphold the findings that the impact of the shock in the indirect tax (VAT) and direct tax (CIT and PPT) on GDP growth does not die out over the specified period under consideration. Variance decomposition analysis found that the effect of the shock to the direct tax (CIT and PPT) on GDP growth tends to be low, whereas the effect of the shock to the indirect tax (VAT) on GDP growth tends to be significant to increase over the period. Therefore, this study recommended that in order to expand tax revenue, there should be a broad base tax strategy, focusing on all key areas of the tax system with measurable outcomes. Emphasis should be on simplification of the tax system and ease of implementation with priority given to quick wins and low hanging fruits, while more challenging aspects should be deferred until positive results are being recorded. The regulatory authorities charged with the responsibility of collecting tax should further be strengthened to enforce compliance by taxpayers, among other recommendations.</p><p> </p><p><strong>JEL: </strong>C1, H20, H21</p>

Assessing the Impact of Terrorism on African Tourism Demand

2021 ◽  
Author(s):  
Sheereen Fauzel ◽  
Boopen Seetanah
Keyword(s):  
Panel Data Analysis ◽  
Dynamic Panel Data ◽  
Terrorist Attacks ◽  
Tourism Demand ◽  
African Countries ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
The Impact ◽  
The Relationship

Many African states are relying on or have identified tourism to accelerate their growth and the continent has become the world’s second fastest growing tourist industry. However, African states have also not been spared by increasing terrorism attacks during the past decades, probably hindering the growth of this sector to certain extent. This study examines the relationship between terrorism and tourism for a sample of selected African countries over the period 1995 to 2017. Given the dynamic nature of tourism demand and the possibility of endogenous relationships in the terrorism-tourism nexus, dynamic panel data analysis, namely a Panel vector error correction model (PVECM) is employed. The results confirm that terrorism negatively affects tourism demand in Africa and this can be explained by the reactive psychology of tourists to the various aggravated terrorist attacks in the countries. Moreover, the findings show that an increase in tourism may have resulted in an increase in terrorist attacks, hence confirming a bi directional causality between tourism and terrorism.

scholarly journals Does Uncertainty Matter for Trade - Economic Growth Nexus in Indonesia?

2021 ◽  
Vol 67 (1) ◽  
pp. 147
Author(s):  
Panky Tri Febiyansah ◽  
Bintang Dwitya Cahyono ◽  
Rio Novandra
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Output Growth ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
The Impact ◽  
The Relationship

This paper aims to test the impact of uncertainty on the causal relationship among exports, imports, and economic growth in Indonesia. The relationship is constructed by examining the presence of FDI-adjusted exports and imports (trade) and the output link using conditional variances-covariances derived from the generalized autoregressive conditional heteroskedastic (GARCH) process in a vector error correction model (VEC-GARCH model). Using evidence in Indonesia, the model exposes the uni-directional nexus from trade performance to trade-adjusted output growth in the absence of uncertainty. The volatility effects are evident in the causal relationship between trade and output. The finding shows that the uncertainty effects hamper the trade-economic growth nexus. Incorporated with the long-run causality, trade still causes output even after containing the contributions of volatility. The significant role of imports highlights the higher demand for intermediate capital products and the inclusion of technology in strengthening economic growth.

scholarly journals Investigating the impact of Covid-19 on stock markets

2021 ◽  
Vol 10 (7) ◽  
pp. 199-219
Author(s):  
Mustapher Faque ◽  
Umit Hacioglu
Keyword(s):  
Stock Markets ◽  
Equity Markets ◽  
Adverse Impact ◽  
Vector Error Correction ◽  
Vector Error ◽  
Clear Sign ◽  
Vector Error Correction Models ◽  
Equity Indices ◽  
The Impact ◽  
The Relationship

This paper aims to examine the impact of Covid-19 pandemic on stock markets. This paper also analyses the stock market cointegration of selected global equity indices that performed better and have a quick speed of recovery during the pandemic. This paper also questions how increasing uncertainty and volatility deters investors’ perception of the diversification of equity investments. The dataset for the selected 12 global equity indices has been used from Thompson Reuters’s EIKON database in a given period of time between 2010 and 2021. This paper employs Vector Error Correction Models to assess the relationship among the selected global equity indices. Findings demonstrate that (i) there is an adverse impact of Covid-19 on the Global Equity markets, (ii) there is a clear sign of cointegration in global equity indices, (ii) investors can benefit from investing in particular equity indices that have exhibited quick speed of recovery from the pandemic records lows. The findings finally provide a strong foundation for constructing a resilient equity portfolio in a highly uncertain market environment.

Unconventional US Monetary Policy: Impact on the Indian Economy

2021 ◽  
pp. 001946622199862
Author(s):  
Anshuman Jaswal ◽  
Bhavna Ranjan Ahuja
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Correction Method ◽  
Jel Classification ◽  
Vector Error Correction ◽  
Indian Economy ◽  
Vector Error ◽  
The Us ◽  
The Usa ◽  
The Impact

This article examines the impact of the US Quantitative Easing (QE) on the Indian economy. Against the backdrop of indications of economic slowdown worldwide and developing countries lowering the interest rates and restarting the treasury purchases, it aims to understand the influence US QE had on Indian economy and how it will impact way forward. Macroeconomic variables pertaining to India and the USA were examined from September 2008 to June 2019 (fortnightly data) using the vector error correction method model. It was found that the influence of the US monetary base on the Indian money supply was far more as compared to the US policy rate. Overall, the impact of QE on the Indian economy has not been as large as on the other economies of the world due to regular RBI intervention in terms of interest rates, exchange rates and other active monetary policy measures. JEL Classification Codes: E44, E52, E58, F32, O16

scholarly journals Determinants of fdi inflows in india

2016 ◽  
Vol 6 (2) ◽  
pp. 186-198
Author(s):  
Siraj-ul-Hassan Reshi
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Direct Investment ◽  
Domestic Investment ◽  
Host Countries ◽  
Fdi Inflows ◽  
Explanatory Variables ◽  
The Impact ◽  
Fdi Determinants ◽  
The Relationship

Foreign direct investment (FDI) is often seen as an important catalyst for economicgrowth in the developing countries. It affects the economic growth by stimulating domestic investment, increasing human capital formation and by facilitating the technology transfer in the host countries. The main purpose of this paper is to investigate the impact of FDI determinants on FDI inflows in India from the period 1991-2009.The relationship between FDI inflow and its determinants have been analyzed by using the regression analysis and other variables that affect FDI inflows in India such as Developmental expenditure ratio, fiscal deficit ratio, exchange rate and other economic determinant such as GDP as the possible explanatory variables of foreign direct investment inflows in India. The expected results of the study are positive and statistically significant. Regarding the impact of various determinants on FDI in flows empirically, it has beenfound that all the variables except exchange rate have positively and significantly affecting FDI inflows i.e. increase in GDP, Developmental expenditure, foreign exchange reserves, increased the FDI inflows.

scholarly journals Transmisión de los precios del arroz en Colombia y el mundo

2019 ◽  
pp. 151-179
Author(s):  
Ricardo Troncoso-Sepúlveda
Keyword(s):  
Transition Probability ◽  
Price Transmission ◽  
Trade Policies ◽  
Correction Model ◽  
Vector Error Correction ◽  
Agricultural Prices ◽  
Vector Error ◽  
High Volatility ◽  
The Impact ◽  
The Relationship

The aim of this paper is to analyse the spatial price transmission of rice in Colombia, emphasizing the impact of trade policies. For this purpose, a Markov-switching vector error correction model was used to model regime shifts in the relationship between domestic and international rice prices in Colombia and some control countries, from January 1996 to September 2018. The results reveal three price transmission regimes that coincide with internal trade policies and with the food crisis of 2007-2008. The high volatility regime was the most persistent, with an average duration of 15.4 months, a transition probability of 93 % and an adjustment speed of 0.24. In addition, during this regime, Colombia was less integrated into the international rice market. These results are relevant, since they constitute the application of a threshold methodology to the analysis of the transmission of agricultural prices and can be useful for the design of agrarian policies that contribute to the integration and competitiveness of the Colombian rice sector.

Analysing the impact of tourism foreign direct investment on economic growth

2016 ◽  
Vol 23 (5) ◽  
pp. 1042-1055 ◽  
Author(s):  
Sheereen Fauzel ◽  
Boopen Seetanah ◽  
R.V. Sannassee
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Vector Error Correction Model ◽  
Domestic Investment ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Tourism Sector ◽  
The Impact

The present study attempts to address the important question of whether foreign direct investment (FDI) flowing into the tourism sector has served to enhance economic growth in Mauritius for the period 1984–2014. Using a dynamic vector error correction model, and catering for dynamism, the results show that tourism FDI has indeed contributed to fostering economic growth; albeit the magnitude of the coefficient being relatively smaller than FDI in the non-tourism sector. A plausible explanation for such a finding may reside in the fact that the bulk of FDI flows in the non-tourism sectors while domestic investment predominates in the tourism sector in Mauritius. The findings also demonstrate a positive relationship between tourism development and economic growth, thus supporting the tourism-led growth hypothesis.

scholarly journals Does Government Borrowing Crowd Out Private Sector Investment in Zimbabwe?

2019 ◽  
pp. 1-9
Author(s):  
Smart Manda
Keyword(s):  
Private Sector ◽  
Interest Rates ◽  
Consumer Price Index ◽  
Decomposition Analysis ◽  
Impulse Response Functions ◽  
Domestic Investment ◽  
Private Sector Investment ◽  
Government Sector ◽  
Variance Decomposition Analysis ◽  
The Impact

This paper assesses the impact of government borrowing on the private sector credit in Zimbabwe using monthly data from 2012 to 2018.  The increase in public debt from 2012 raised concerns over the possible crowding-out effect of government borrowing and spending on domestic investment in Zimbabwe. Using a multivariate regression model and an unrestricted Vector Auto-regression (VAR) model, the paper finds a negative but not significant relationship between credit to government and credit to private sector, implying that credit to government may not have crowded-out private credit. The impulse response functions also indicate that the response of credit to private sector to shocks from government sector was not significant. The results from the variance decomposition analysis, however, indicates that in the sixth period, about 31.2 percent of the variation in credit to private sector was explained by changes in the consumer price index. Other control variables, notably the volume of manufacturing index, interest rates and credit to government did not have a significant influence on the changes in credit to private sector.

scholarly journals Outward FDI and its implication on Indonesian domestic investment

2021 ◽  
Vol 26 (1) ◽  
pp. 143-169
Author(s):  
Gondo Tutik Wiryanti ◽  
Masron Tajul Ariffin ◽  
Ibrahim Haslindar ◽  
Nik Azman Nik Hadiyan
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Domestic Investment ◽  
Outward Fdi ◽  
Vector Error Correction ◽  
Revenue Collection ◽  
Digital Era ◽  
Vector Error ◽  
The Impact

Since becoming a democratic country in the late 1990s, Indonesia has been changing into a more promising countries with a remarkable reduction in poverty by more than 50% during the last decade. To achieve a developed or high-income country, Indonesia must grow by 8% to 9% annually with huge investment is needed in every sector, ranging from infrastructure to human development in the digital era. Apart from strengthening tax revenue collection, Indonesian government must also investigate the role of outward foreign direct investment (OFDI) that potentially affects domestic investment in the negative way. Hence, it is the objective of this study to examine the impact of OFDI on Indonesian domestic investment for the period between 1980 and 2018. By applying vector error correction model, we observe that OFDI has significant adverse effect on domestic investment. With current inflows of foreign direct investment (FDI) has also never reached to the level prior to the 1997 economic crisis, discouraging the outflows of FDI could be a desirable strategy.

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