Natural resource abundance and broad-based financial development nexus in ASEAN countries: accounting for globalization and human capital

2021 ◽  
Vol 10 (1) ◽  
pp. 30-45
Author(s):  
Solomon Nathaniel
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Financial Development ◽  
Natural Resource ◽  
Unit Root ◽  
Manufacturing Sector ◽  
Financial System ◽  
Cross Sectional ◽  
Cointegration Tests ◽  
Asean Countries

Sustainable resource consumption is important for the development of the financial system. Besides, an advanced financial system eases the transfer of revenues from production activities and export to productive investments. The influence of natural resource (NR) abundance on financial development (FD) is still an ongoing debate with conflicting results. However, this study applies a novel proxy for FD, which measures the efficiency, accessibility, and depth of the financial market and institutions. Therefore, the current study is a maiden attempt to explore the nexus between FD and NR abundance amidst globalization, human capital, and economic growth in ASEAN economies. Reliable panel econometric techniques, including second-generation unit root tests, Westerlund (2007) cointegration tests, and the Augmented Mean Group (AMG) estimator are employed on the data for the period 1990-2017. The preliminary tests affirm the existence of cross-sectional dependence, unit root, and cointegrating relationship among the variables. The findings from the study reveal that NR abundance reduces FD, while globalization, human capital and economic growth add to FD. A feedback causality exists between NR abundance and FD. Thus, this study argues that more investment in the manufacturing sector will ease the attainment of efficiency in financial sector accessibility and benefits from NR abundance.

Financial development, FDI and economic growth: evidence from Sudan

2018 ◽  
Vol 45 (8) ◽  
pp. 1236-1249 ◽  
Author(s):  
Abdalla Sirag ◽  
Samira SidAhmed ◽  
Hamisu Sadi Ali
Keyword(s):  
Economic Growth ◽  
Least Squares ◽  
Financial Development ◽  
Unit Root ◽  
Structural Break ◽  
Ordinary Least Squares ◽  
Series Data ◽  
Content Type ◽  
Long Run ◽  
Cointegration Tests

Purpose The effect of foreign direct investment (FDI) on economic growth is widely believed to be contingent on the development of the financial sector. Nevertheless, as the possibility that the effect of financial development on growth being contingent on FDI has been neglected in existing literature, the authors have investigated it in this paper. In general, the purpose of this paper is to examine the effect of financial development and FDI on economic growth in Sudan using annual data from 1970 to 2014. Design/methodology/approach Since most of the macroeconomic variables are subject to unit root problem, the time series data are assessed using unit root and cointegration tests with/without structural break. Moreover, the study uses the fully modified ordinary least squares and the dynamic ordinary least squares techniques to estimate the long-run model. Findings The results of the cointegration tests provide evidence that a long-run relationship exists among variables even after accounting for the structural break. The results show that financial development and FDI are positive and significant in explaining economic growth in Sudan. Financial development is found to be more beneficial to economic growth than FDI. Moreover, the findings reveal that FDI leads to better economic performance through financial development. Interestingly, the findings of the study show that the effect of financial development on economic growth is further enhanced by the inflows of FDI. Research limitations/implications The government should focus on promoting FDI in more productive sectors. In addition, further cooperation with multinational enterprises is needed to increase FDI in the country. Originality/value This is the first paper that empirically examines both the interlinked impact of FDI on growth through financial development and the impact of financial development on economic growth through FDI in Sudan using appropriate econometric methods.

DOES REMITTANCE INFLOW PROMOTE HUMAN DEVELOPMENT IN SUB-SAHARAN AFRICA? AN EMPIRICAL INSIGHT

2021 ◽  
pp. 1-23
Author(s):  
MALAYARANJAN SAHOO ◽  
NARAYAN SETHI
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Human Development ◽  
Financial Development ◽  
Sub Saharan Africa ◽  
Positive Effects ◽  
Long Run ◽  
Cointegration Tests ◽  
Sub Saharan ◽  
Ssa Countries

This paper examines the relationship between human development, remittances and other macroeconomic variables like life expectancy, human capital, FDI, inflation, economic growth and financial development by considering 31 Sub-Saharan African (SSA) countries during the period of 1990–2018. Kao and Fisher residual cointegration tests are applied to check the cointegration among the variables in the long-run. We apply fully modified OLS (FMOLS) and DOLS to show the long-run elasticity of explanatory variables on dependent variable. The result indicates that remittances have a positive and statistically significant effects on human development in SSA region. Similarly, government expenditure, human capital, inflation and economic growth have positive effects on human development in the region. Dumitrescu–Hurlin panel granger causality tests were observed such that there is a unidirectional causality between remittance and human development in SSA countries. However, human development and inflation rate show bi-directional relationship with each other. This paper suggests that public policies can be conceived to promote health, education and income, thereby encouraging and enhancing human development. Policymakers should also rely on other macroeconomic factors, such as government spending and financial development, to stimulate human development in SSA region.

scholarly journals The Effect of Energy Consumption and Economic Growth on Environmental Sustainability in the GCC Countries: Does Financial Development Matter?

Energies ◽  
2021 ◽  
Vol 14 (18) ◽  
pp. 5897
Author(s):  
Hala Baydoun ◽  
Mehmet Aga
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Co2 Emissions ◽  
Financial Development ◽  
Environmental Sustainability ◽  
Unit Root ◽  
Kuznets Curve ◽  
Causality Test ◽  
Cross Sectional ◽  
Gcc Countries

Achieving environmental sustainability whilst minimizing the climate change effect has become a global endeavor. Hence, this study examined the effect of energy consumption, economic growth, financial development, and globalization on CO2 emissions in the Gulf Cooperation Council (GCC) countries. The research utilized a dataset stretching from 1995 to 2018. In a bid to investigate these associations, the study applied cross-sectional dependence (CSD), slope heterogeneity (SH), Pesaran unit root, Westerlund cointegration, cross-sectionally augmented autoregressive distributed lag (CS-ARDL), and Dumitrescu and Hurlin (DH) causality approaches. The outcomes of the CSD and SH tests indicated that using the first-generation techniques produces misleading results. The panel unit root analysis unveiled that the series are I (1). Furthermore, the outcomes of the cointegration test revealed a long-run association between CO2 emissions and the regressors, suggesting evidence of cointegration. The findings of the CS-ARDL showed that economic growth and energy consumption decrease environmental sustainability, while globalization improves it. The study also validated the environmental Kuznets curve (EKC) hypothesis for GCC economies. In addition, the results of the DH causality test demonstrated a feedback causality association between economic growth and CO2 emissions and between financial development and CO2 emissions. Moreover, there is a one-way causality from energy consumption and globalization to CO2 emissions in GCC economies. According to the findings, environmental pollution in GCC countries is output-driven, which means that it is determined by the amount of energy generated and consumed.

Fertility, education, and female labour participation

2019 ◽  
Vol 46 (1) ◽  
pp. 66-82 ◽  
Author(s):  
Waliu Olawale Shittu ◽  
Norehan Abdullah
Keyword(s):  
Human Capital ◽  
Unit Root ◽  
Labour Force ◽  
Labour Force Participation ◽  
Cross Sectional ◽  
Female Labour ◽  
Content Type ◽  
Labour Participation ◽  
Cross Sectional Dependence ◽  
Asean Countries

Purpose The purpose of this paper is to examine the relationship among fertility, female education and female labour participation in ASEAN-7 countries: Malaysia, Indonesia, Brunei, Myanmar, the Philippines, Vietnam and Thailand, between 1990 and 2015. The choice of these countries is informed by their economic, social and political importance in the ASEAN Bloc; while Indonesia boasts of the largest population in ASEAN, Brunei and Malaysia boast of relatively advanced economies, in GDP terms. Design/methodology/approach Pesaran’s test of panel unit root in the presence of cross-sectional dependence was employed to test for the stationarity properties of the series. The dynamic long-run coefficients of the variables were examined using the pooled mean group, common correlated effect and dynamic OLS techniques, while the Granger causality test was used to estimate the direction of causality among the variables. Findings The findings indicate that there is both negative and positive relationship between fertility and labour force participation, with causality running from labour force participation through fertility – on the one hand, and between education and labour force participation, with no causality between the two – on the other hand. Research limitations/implications The study, therefore, upholds the role incompatibility and societal response hypothesis, as well as human capital and opportunity cost theories. Practical implications The appropriate policies are those that gear the countries’ fertility decisions towards the societal response hypothesis in order to enhance human capital development and increase productivity. This implies that the governments of ASEAN-7 countries should ease hindrances on a balanced combination of family-care and workforce participation on married women in view of the gender-wage gap created by female work apathy, which largely reduces domestic productivities. Appropriate policies in this direction include rising availability and affordability of childcare facilities, incentives for women higher education, attitudinal changes towards job-participating mothers, as well as legislated paid parental leaves which have balanced the, hitherto, incompatibility between work and childbearing. Originality/value Except for Abdullah et al. (2013), the authors have no knowledge of other authors who have worked on this relationship in the chosen ASEAN countries. This study is, however, an improvement upon that of Abdullah et al. (2013) in different ways, one of which is that it considers seven ASEAN countries, thus making the results more valid representation of the ASEAN Bloc. Furthermore, the Pesaran (2007) technique of unit root testing has not been found in any recent literature on the subject-matter. This technique, being a second-generation test, tests variable unit root in the presence of cross-sectional dependence.

scholarly journals The Nexus between Financial Development and Economic Growth: Panel Data Evidence from Developing Countries

2021 ◽  
Vol 14 (10) ◽  
pp. 489
Author(s):  
E. M. Ekanayake ◽  
Ranjini Thaver
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Panel Data ◽  
Least Squares ◽  
Financial Development ◽  
Panel Cointegration ◽  
Sub Saharan Africa ◽  
Explanatory Variables ◽  
Cointegration Tests ◽  
Sub Saharan

The objective of this study is to investigate the nexus between financial development (FD) in economic growth (GROWTH) in developing countries. The study uses panel data from 138 developing countries during the period 1980–2018. The relationship between financial development and economic growth is investigated using four explanatory variables that are commonly used to measure the level of financial development and several other control variables, including a dummy variable representing the financial and banking crises. The sample of 138 developing countries is also classified into six geographic regions. We have carried out panel unit-root tests and panel cointegration tests before estimating the specified models using both Panel Least Squares (Panel LS) and Panel Fully Modified Least Squares (FMOLS) methods. In addition, panel Granger causality tests have been conducted to identify the direction of causality between FD and GROWTH for each of the regions. The results of the study provide evidence of a direct relationship between FD and GROWTH in developing countries. Furthermore, there is evidence of bi-directional causality running from FD to GROWTH and from GROWTH to FD in samples of Europe and Central Asia, South Asia, and all countries, but not in East Asia and Pacific, Latin America and the Caribbean, Middle East and North Africa, and Sub-Saharan Africa.

scholarly journals The Dynamics of Foreign Direct Investment in BRICS Countries

2017 ◽  
Vol 9 (3(J)) ◽  
pp. 101-112
Author(s):  
Kunofiwa Tsaurai
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Foreign Direct Investment ◽  
Financial Development ◽  
Direct Investment ◽  
Fixed Effects ◽  
Trade Openness ◽  
Human Capital Development ◽  
Brics Countries ◽  
Capital Development

Recent studies which investigated the determinants of foreign direct investment (FDI) in BRICS include Hsin-Hong and Shou-Ronne (2012), Nandi (2012), Jadhav (2012), Darzini and Amirmojahedi (2013), Nischith (2013), Ho et al. (2013), Kaur et al. (2013) and Priya and Archana (2014). The findings from these studies shows lack of consensus and confirm that a list of agreeable determinants of FDI in BRICS countries is still an unsettled matter. This paper was therefore initiated in order to contribute to the debate on the discourse on FDI determinants in BRICS countries.This paper deviates from earlier similar studies in five ways: (1) uses most recent data, (2) is the first to investigate whether a combination of financial development, trade openness, human capital, economic growth and inflation influence FDI in BRICS countries, (3) uses different proxies of the variables that affect FDI, (4) employed both fixed effects and pooled ordinary least squares (OLS) approaches and (5) used a stacked data approach.The results of the study showed that economic growth, trade openness and exchange rate stability positively impacted on FDI, financial development positively influenced FDI under fixed effects, FDI was positively influenced by human capital development using the pooled OLS and inflation negatively affected FDI in line with literature. Taking into account these findings, this study urges BRICS to implement policies that increase financial sector efficiency and economic growth, maintain stable exchange rates, keep inflation rates at lower levels, enhance trade openness and human capital development in order to increase FDI inflows.

Investigating the Roles of Physical Infrastructure, Financial Development and Human Capital on Economic Growth in Bangladesh

2020 ◽  
Vol 12 (2) ◽  
pp. 154-175
Author(s):  
Faroque Ahmed ◽  
Md. Jamal Hossain ◽  
Mohammad Tareque
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Financial Development ◽  
Causality Test ◽  
Distributed Lag ◽  
Dynamic Relationship ◽  
Autoregressive Distributed Lag ◽  
Physical Infrastructure ◽  
Long Term Impact

This article investigates the dynamic relationship among physical infrastructure, financial development, human capital and economic growth in Bangladesh, employing Autoregressive Distributed Lag (ARDL) bound co-integration and Granger causality test for the period 1985–2019. The study finds a significantly positive long-term impact of physical infrastructure and human capital on economic growth. However, the effect of financial development on growth is found to be negative, and the result suggests that financial development will take place with economic growth. From the policy perspective, this study emphasises increasing investment in physical infrastructure and human capital for Bangladesh to foster long-term economic growth.

Financial development, human capital and its impact on economic growth of emerging countries

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aaqib Sarwar ◽  
Muhammad Asif Khan ◽  
Zahid Sarwar ◽  
Wajid Khan
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Financial Development ◽  
Emerging Economies ◽  
Generalized Method Of Moments ◽  
Emerging Countries ◽  
Data Set ◽  
Content Type ◽  
The World ◽  
The Impact

Purpose This paper aims to investigate the critical aspect of financial development, human capital and their interactive term on economic growth from the perspective of emerging economies. Design/methodology/approach Data set ranged from 2002 to 2017 of 83 emerging countries used in this research and collected from world development indicators of the World Bank. The two-step system generalized method of moments is used to conduct this research within the endogenous growth model while controlling time and country-specific effects. Findings The findings of the study indicate that financial development has a positive and significant effect on economic growth. In emerging countries, human capital also has a positive impact on economic growth. Financial development and human capital interactively affect economic growth for emerging economies positively and significantly. Research limitations/implications The data set is limited to 83 emerging countries of the world. The time period for the study is 2002 to 2017. Originality/value This research contributes to the existing literature on human capital, financial development and economic growth. Limited research has been conducted on the impact of financial development and human capital on economic growth.

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