scholarly journals TRADE AND INVESTMENT-LED GROWTH IN SOUTHERN AFRICAN DEVELOPMENT COMMUNITY (SADC)

2021 ◽  
Vol 9 (2) ◽  
pp. 79-88
Author(s):  
Strike Mbulawa ◽  
Keyword(s):  
Trade Openness ◽  
Research Work ◽  
Extended Period ◽  
Growth Potential ◽  
Annual Data ◽  
Explanatory Variables ◽  
Distributed Lag ◽  
Long Run ◽  
Southern Africa Development Community ◽  
Trade And Investment

The growth in the gross domestic product (GDP) has been below zero within the Southern Africa Development Community (SADC) region in recent years. Some member states have consistently experienced negative growth rates for an extended period which has contributed to low growth for the region on average. The lack of consensus on the findings in literature requires further research work to be done to guide policymakers on the potential sources of growth. This study examines the contribution of trade and investment on growth in the context of SADC. It applies the autoregressive distributed lag (ARDL) model to test relationships in both short and long run using annual data for the period 1994 to 2019. Findings confirm the existence of the trade and investment-led growth hypothesis. There is a short run, long run, and joint causality from both explanatory variables to economic growth. Cointegration between growth, trade, and investment is confirmed. Specifically, an increase in investment spurs growth in both the short and long run. Investment expenditure seems to double the growth potential in the long run. Additionally, the study shows that an increase in trade openness retards growth which is consistent with the Prebisch-Singer hypothesis. Results suggest that policies that focus on the development and improvements in fixed investment, locally, help to drive the growth potential. The improvement of capitalization by manufacturing-oriented firms, as opposed to primary product-oriented firms, is ideal.

ECONOMETRIC MODELLING OF THE CONSUMPTION OF ELECTRICITY IN GHANA WHEN STRUCTURAL BREAKS EXIST

2020 ◽  
Vol 7 (3) ◽  
pp. 205-220
Author(s):  
Samuel Asuamah Yeboah
Keyword(s):  
Structural Breaks ◽  
Trade Openness ◽  
Electricity Consumption ◽  
Annual Data ◽  
Explanatory Variables ◽  
Long Run ◽  
Development Indicator ◽  
Short Run ◽  
World Development Indicator ◽  
World Development

The research modelled electricity consumption for Ghana using annual data for the period 1971-2011, obtained from world development indicator. The research adopts the Gregory and Hansen model of cointegration for the estimation in the presence of structural breaks. The results reveal stable short run and long-run relationships among the explanatory variables and electricity consumption. The findings suggest that financial development explain electricity consumption in Ghana both in the short run and in the long run. The other variables (trade openness, price, and income) in the estimated model do not significantly explain electricity consumption. Therefore, they are not reliable policy variables in managing electricity consumption.

scholarly journals Does Trade Liberalization Affect Energy Saving in Nigeria?

2018 ◽  
Vol 6 (4) ◽  
Author(s):  
Aliyu Alhaji Jibrilla
Keyword(s):  
Energy Use ◽  
Energy Intensity ◽  
Trade Openness ◽  
Value Added ◽  
Annual Data ◽  
Distributed Lag ◽  
Long Run ◽  
Dynamic Ols ◽  
Short Run ◽  
Auto Regressive

The study empirically examines the role of trade openness and other determinants in explaining the intensity of energy use in Nigeria using annual data from 1981 to 2015. The paper uses an auto-regressive distributed lag (ARDL) model in interpreting both long-run energy intensity as a co integrating relation, and its short-run dynamics. The robustness of ARDL results is verified using Dynamic OLS (DOLS) estimation technique. The results provide evidence of a Cointegration relation between energy intensity and its determinants. The results provide evidence that trade only significantly reduces energy intensity in the short run. Meanwhile, the results also show that income growth and industry value added have significant reducing effects on energy intensity. The results also raise some important policy issues, particularly on the inflows of foreign aid.

scholarly journals A Cointegration Analysis of Economic Growth and CO_2 Emissions: A Case Study of Malaysia.

2019 ◽  
Vol 9 (1) ◽  
pp. 1 ◽  
Author(s):  
Ejiro U. Osiobe
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Granger Causality ◽  
Cointegration Analysis ◽  
Kuznets Curve ◽  
Annual Data ◽  
Explanatory Variables ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Long Run

The paper aims to establish a long-run and the Granger causal relationship between economic growth,  emissions, international trade, energy consumption, and population density in Malaysia. The study will use annual data from 1970 to 2014. A unique cointegrating relationship between our variables  was identified. The study employed the Auto-Regressive Distributed Lag  model to examine the Environmental Kuznets Curve . Our empirical results analysis showed a long-run relationship between per capita  emissions  and our explanatory variables . To investigate the Granger causal relationship between , the Vector Error Correction Model  was employed and our results, associated the absence of Granger causality between  emissions and economic growth  in the short-run while revealing a uni-directional Granger causality movement  from economic growth to  emissions in the long-run. Hence, an increase in  will lead to a rise in  emissions in Malaysia.

Macro-Economic Disequilibrium and Educational Development in Nigeria between 1980-2017

2019 ◽  
Vol 10 (08) ◽  
pp. 20592-21600
Author(s):  
Gbadebo Salako ◽  
Adejumo Musibau Ojo ◽  
Jaji Ayobami Francis
Keyword(s):  
Time Series Data ◽  
Educational Development ◽  
Negative Relationship ◽  
Series Data ◽  
Explanatory Variables ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Stationarity Test ◽  
Level I

This study empirically investigates the effects of macroeconomic disequilibrium on educational development in Nigeria. The study employed time series data between 1980 and 2017. Autoregressive Distributed Lag method of estimation was employed. The result revealed that the variables stationarity test were mixed between the first difference I(I) and level I(0). The cointegration result shows that there exist long run relationship between the variables. The result revealed that Balance of payment, Poverty, Debt rate inflation and unemployment exhibited negative relationship with educational development. The estimation result showed that all explanatory variables account for 88% variation of educational development in Nigeria. It is therefore recommended that government should fast track policies that can stabilize inflation and exchange rate in the country. Also, Policies must be formulated to reduce poverty and unemployment.

scholarly journals Causal Links between Trade Openness and Foreign Direct Investment in Romania

2021 ◽  
Vol 14 (3) ◽  
pp. 90
Author(s):  
Malsha Mayoshi Rathnayaka Mudiyanselage ◽  
Gheorghe Epuran ◽  
Bianca Tescașiu
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Trade Openness ◽  
Test Procedure ◽  
Real Effective Exchange Rate ◽  
Foreign Direct Investments ◽  
Causality Test ◽  
Fdi Inflows ◽  
Distributed Lag ◽  
Long Run

In this increasingly globalized era, foreign direct investments are considered to be one of the most important sources of external financing for all countries. This paper investigates the causal relationship between trade openness and foreign direct investment (FDI) inflows in Romania during the period 1997–2019. Throughout this study, Trade Openness is the main independent variable, and Gross Domestic Product (GDP), Real Effective Exchange Rate (EXR), Inflation (INF), and Education (EDU) act as control variables for investigating the relationships between trade openness (TOP) and FDI inflow in Romania. The Auto Regressive Distributed Lag (ARDL) Bounds test procedure was adopted to achieve the above-mentioned objective. Trade openness has negative and statistically significant long-run and short-run relationships with FDI inflows in Romania throughout the period. Trade openness negatively affects the FDI inflow, which suggest that the higher the level of openness is, the less likely it is that FDI will be attracted in the long run. The result of the Granger causality test indicated that Romania has a unidirectional relationship between trade openness and FDI. It also showed that the direction of causality ran from FDI to trade openness.

Determinants of Total Factor Productivity in Mexico, Indonesia, Nigeria, and Turkey (1980–2014)

2018 ◽  
Vol 4 (2) ◽  
pp. 192-217 ◽  
Author(s):  
Phillip Akanni Olomola ◽  
Tolulope Temilola Osinubi
Keyword(s):  
Human Capital ◽  
Total Factor Productivity ◽  
Negative Relationship ◽  
Annual Data ◽  
Factor Productivity ◽  
Distributed Lag ◽  
Long Run ◽  
The World ◽  
Government Stability ◽  
Short Run

This study analyzed the macroeconomic and institutional determinants of total factor productivity (TFP) in the MINT (Mexico, Indonesia, Nigeria, and Turkey) countries during the period 1980–2014. Annual data covering the period between 1980 and 2014 were used. Data on real gross domestic product (real GDP), labor force, gross fixed capital formation, foreign direct investment (FDI), human capital, and inflation were sourced from the World Development Indicators published by the World Bank. Also, data on corruption, government stability, and law and order were obtained from the database of International Country Risk Guide. Panel autoregressive distributed lag (PARDL) regression technique was used to estimate the model. Results showed that TFP growth rate declined on average by 1.4 per cent and 1.8 per cent in Mexico and Turkey, respectively, while Indonesia and Nigeria did not experience productivity growth on the average. Results also showed that in the long run, human capital and government stability had positive and significant effects on TFP, while FDI and corruption had negative but significant effects on TFP. In the short run, there existed a significant negative relationship between TFP and inflation. However, the effects of human capital and corruption on TFP were positive and significant. The study concluded that human capital and corruption were key drivers of TFP in the MINT countries both in the long run and short run.

scholarly journals Consequences of Capital formation, Trade Liberalization on the Economic Growth: Pakistan’s Experience

2015 ◽  
Vol 2 (1) ◽  
pp. 1-4
Author(s):  
Nadia Bukhari ◽  
Anjum Iqbal
Keyword(s):  
Economic Growth ◽  
Time Series Data ◽  
Trade Openness ◽  
Capital Formation ◽  
Vital Role ◽  
Series Data ◽  
Distributed Lag ◽  
Long Run ◽  
Auto Regressive ◽  
Adf Test

This study considers the long run relationship between the liberalization of trade, capital formation and the economic growth of Pakistan by using the time series data from 1975-2013. The main aim of this study is to examine that how much liberalization of trade and capital formation affects the economic growth of Pakistan in long run. The approach that has been used for empirical analysis is Auto Regressive Distributed Lag (ARDL) model. Under the ADF test capital formation (CF) is stationary at its first level but the trade openness (TO) and GDP is stationary at its first difference. Moreover, the granger casualty test is evident that there become a casual relationship between the trade openness and GDP. The result of this study shows that both the trade openness and the capital formation determined the economic growth in long run and they both have statistically significant effect on the GDP. Furthermore it has has been depicted from the study that the trade has a vital role to influence the economic growth.

scholarly journals The Impact of Industrialization, Trade Openness, Financial Development, and Energy Consumption on Economic Growth in Indonesia

Economies ◽  
2021 ◽  
Vol 9 (4) ◽  
pp. 174
Author(s):  
Khalid Eltayeb Elfaki ◽  
Rossanto Dwi Handoyo ◽  
Kabiru Hannafi Ibrahim
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Least Squares ◽  
Financial Development ◽  
Correction Term ◽  
Trade Openness ◽  
Ordinary Least Squares ◽  
Distributed Lag ◽  
Long Run ◽  
The Impact

This study aimed to scrutinize the impact of financial development, energy consumption, industrialization, and trade openness on economic growth in Indonesia over the period 1984–2018. To do so, the study employed the autoregressive distributed lag (ARDL) model to estimate the long-run and short-run nexus among the variables. Furthermore, fully modified ordinary least squares (FMOLS), dynamic least squares (DOLS), and canonical cointegrating regression (CCR) were used for a more robust examination of the empirical findings. The result of cointegration confirms the presence of cointegration among the variables. Findings from the ARDL indicate that industrialization, energy consumption, and financial development (measured by domestic credit) positively influence economic growth in the long run. However, financial development (measured by money supply) and trade openness demonstrate a negative effect on economic growth. The positive nexus among industrialization, financial development, energy consumption, and economic growth explains that these variables were stimulating growth in Indonesia. The error correction term indicates a 68% annual adjustment from any deviation in the previous period’s long-run equilibrium economic growth. These findings provide a strong testimony that industrialization and financial development are key to sustained long-run economic growth in Indonesia.

scholarly journals The Determinants of Pakistan’s Trade Balance: An ARDL Cointegration Approach

2010 ◽  
Vol 15 (1) ◽  
pp. 1-26 ◽  
Author(s):  
Waliullah Waliullah ◽  
Mehmood Khan Kakar ◽  
Rehmatullah Kakar ◽  
Wakeel Khan
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Money Supply ◽  
Trade Balance ◽  
Exchange Rate Regime ◽  
Annual Data ◽  
Impulse Response Functions ◽  
Bounds Testing ◽  
Distributed Lag ◽  
Long Run

This article is an attempt to examine the short and long-run relationship between the trade balance, income, money supply, and real exchange rate in the case of Pakistan’s economy. Income and money variables are included in the model in order to examine the monetary and absorption approaches to the balance of payments, while the real exchange rate is used to evaluate the conventional approach of elasticities (Marshall Lerner condition). The bounds testing approach to cointegration and error correction models, developed within an autoregressive distributed lag (ARDL) framework is applied to annual data for the period 1970 to 2005 in order to investigate whether a long-run equilibrium relationship exists between the trade balance and its determinants. Additionally, variance decompositions (VDCs) and impulse response functions (IRFs) are used to draw further inferences. The result of the bounds test indicates that there is a stable long-run relationship between the trade balance and income, money supply, and exchange rate variables. The estimated results show that exchange rate depreciation is positively related to the trade balance in the long and short run, consistent with the Marshall Lerner condition. The results provide strong evidence that money supply and income play a strong role in determining the behavior of the trade balance. The exchange rate regime can help improve the trade balance but will have a weaker influence than growth and monetary policy.

INDIA–CHINA: CHANGING BILATERAL TRADE AND ITS EFFECT ON ECONOMIC GROWTH

2019 ◽  
pp. 1-20 ◽  
Author(s):  
RAKESH KUMAR
Keyword(s):  
Economic Growth ◽  
Bilateral Trade ◽  
Significant Rise ◽  
Trade Patterns ◽  
Explanatory Variables ◽  
Distributed Lag ◽  
Long Run ◽  
Trade Share ◽  
The Impact ◽  
India And China

This paper highlights the policy aspects of India and China, in the context of consensus building on bilateral trade, which is the cornerstone of diplomatic and political ties between the two countries. India and China have witnessed uninterrupted economic development with a significant rise in bilateral trade because of protrade policies in the last few decades. In this backdrop, this paper examines the dynamic spillovers of India–China’s bilateral trade on the economic growth of the two countries. For the purpose, Autoregressive distributed lag (ARDL) model in multivariate framework is utilized with gross capital formation (GCF) and foreign direct investment (FDI) as two additional explanatory variables. The results highlight that the India–China bilateral trade share has significant long-run impact on the growth of GDP per capita (GDPP) of the two countries, while the impact is more pronounced for China. The growth rates of the two countries are found significantly cointegrated with the variables in question. The results provide important insights in foreign trade patterns, with policy implication for trade and economic co-operations between the two countries.

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