scholarly journals Does the Abundance of Natural Resources Crowd-Out the Manufacturing Sector? Evidence from Nigeria

2021 ◽  
Vol 9 (3) ◽  
pp. 108-126
Author(s):  
Nzeh Innocent Chile ◽  
Benedict I Uzoechina ◽  
Millicent Adanne Eze ◽  
Chika P Imoagwu ◽  
Uzoma M. Anyachebelu
Keyword(s):  
Natural Resources ◽  
Inflation Rate ◽  
Manufacturing Sector ◽  
Value Added ◽  
Capital Formation ◽  
Fixed Capital ◽  
Long Run ◽  
Fixed Capital Formation ◽  
Short Run ◽  
Crowd Out

Our objective in this study is to investigate if natural resource abundance can crowed-out the manufacturing sector in Nigeria. Under the framework of an ARDL and over a period of 1990-2019, findings of the results showed that in the short-run, natural resources positively impact on the manufacturing value added in the current period; however, after a one period lag, the contribution of natural resources to the manufacturing value added becomes negative. We also found that in the short-run, real interest rate, inflation rate and trade openness are negatively linked to the manufacturing value added, while employment in industry and gross fixed capital formation are positively related to the manufacturing value added. In the long-run, natural resources contributed positively to the manufacturing value added. The long-run results also show that the gross fixed capital formation and inflation rate negatively impact on the manufacturing valued added. The implication of our finding is that natural resources rent is closely linked to the success of the manufacturing sector and as such can also crowd-out the manufacturing sector. On grounds of these findings, we recommend, among others; that the proceeds from natural resources should be used to build critical infrastructure necessary to improve the performance of the manufacturing sector. This way, the economy can be diversified to create the needed employment.

scholarly journals Assessment of Long and Short Run Relationship Amongst Macroeconomic Variables and Economic Growth of Nepal

2019 ◽  
pp. 48-87
Author(s):  
Shikha Pokhrel ◽  
Chakra Bahadur Khadka
Keyword(s):  
Economic Growth ◽  
Trade Openness ◽  
Government Expenditure ◽  
Capital Formation ◽  
Fixed Capital ◽  
Macroeconomic Variables ◽  
Long Run ◽  
Fixed Capital Formation ◽  
Short Run ◽  
Adf Test

 This paper examines the long and short run relationship among selected macroeconomic variables and economic growth of Nepal. The objective of the research is to examine empirically the long and short run relationship among macroeconomic variables; gross fixed capital formation, human capital, government expenditure, foreign aid, and trade openness on economic growth of Nepal. The study period spanned from 1975 to 2016. The data has the annual frequency. The time series properties of the data were, first, analyzed using the Augmented Dickey-Fuller (ADF) test and then Auto-Regressive Distributive Lag (ARDL) approach to cointegration is employed to assess the direction of impact and long-run relationships between the variables. Besides these, other diagnostic tests are also conducted. The ARDL bound test analysis depicts the presence of cointegration relationship between real GDP and employed macroeconomic determinants. The negative and significant error correction coefficient further provides substantial evidence that there is long-run association among real gross domestic product and selected macroeconomic variables. The ARDL model shows that Gross fixed capital formation and government expenditure have a significant positive relationship on economic growth in the long run while trade openness has a significant negative relationship on economic growth in the long run. Thus, the findings suggest that GFCF and GE are the major macro determinants to robust the economic growth of Nepal. In order to achieve the desired rate of economic growth it is suggested that there should be a continuous investment in gross fixed capital formation including plants, machinery, raw materials, industrial buildings and technology (research and development). It is also suggested that structural changes should be made in school institutions with the provision of providing quality education with cognitive skills and added resources through quality and skilled teachers. Nepal must have more effective trade openness, particularly by productively controlling import of consumption goods, and by introducing import substitution policies, in boosting their economic growth through international trade.

Estimating the direct contribution of tourism to Rwanda’s economy: Tourism satellite account methodology

2019 ◽  
Vol 20 (3) ◽  
pp. 259-271
Author(s):  
Pius O Odunga ◽  
Geoffrey Manyara ◽  
Mark Yobesia
Keyword(s):  
Gross Domestic Product ◽  
Informal Sector ◽  
Value Added ◽  
Capital Formation ◽  
Tourism Industry ◽  
Fixed Capital ◽  
Domestic Product ◽  
Gross Value Added ◽  
Fixed Capital Formation ◽  
Economic Contribution

The tourism industry is poised to command a significant role in the economy of Rwanda, a low-income developing country that is rapidly transforming into a service-oriented economy. However, the industry does not exist as a distinct entity in a country’s national accounts leading to difficulties in estimating its role. Besides, the existence of a significant informal sector aggravates the situation. This study used tourism satellite accounts approach to estimate the economic contribution of tourism. Using primary data from various tourism surveys, six core tables of the tourism satellite accounts framework are presented to estimate the direct economic contribution of tourism to Rwanda’s economy in 2014. In this year, a total of 1,219,529 international tourists visited the country while 560,000 residents took part in domestic tourism trips resulting in internal tourism expenditure/consumption amounting to RWF 261.2bn. This generated an estimated RWF 197.5bn as gross value added by the tourism characteristic industries. Direct tourism gross value added was estimated at RWF 120.0bn while direct tourism gross domestic product, a measure of the direct effects of internal tourism consumption on gross domestic product of the economy was computed at RWF 128.3bn (or 2.5% of Rwanda’s gross domestic product) in the year. In addition to the core six tourism satellite accounts tables, the levels of tourism employment (about 89,000 jobs) tourism gross fixed capital formation (slightly over RWF 200bn) and tourism collective consumption (over RWF 7bn) were estimated. Under this study, the international methodological recommendations on tourism satellite accounts were implemented for Rwanda. The contribution of tourism to gross domestic product, employment, investment, and collective consumption was quantified and estimated. Informal sector tourism activities were included in these estimates. Gross fixed capital formation and collective consumption estimates are tentative due to conceptual considerations documented by the methodological framework.

scholarly journals Money Demand Function for Nepal: An Empirical View from Expenditure Component

2019 ◽  
pp. 12-25
Author(s):  
Pujan Adhikari
Keyword(s):  
Interest Rate ◽  
Money Demand ◽  
Capital Formation ◽  
Consumption Expenditure ◽  
Demand For Money ◽  
Final Consumption ◽  
On Demand ◽  
Long Run ◽  
Fixed Capital Formation ◽  
Short Run

This paper examines the long run and short-run dynamics relationship between broad money, consumption expenditure, capital stock and interest rate in Nepal over the period of 1975-2017. This paper employs ARDL bound testing approach for co-integration between the broad money demand and its determinants. Result reveals the evidence of cointegration among the variables. The empirical results show that the demand for money is affected by the interest rate and final consumption expenditure both in the long run and short-run. However, the gross fixed capital formation has no impact on demand for money in the long-run and short-run as well. On contrast, interest rate is positively associated with Broad money demand, which is not consistent with theoretically. Positive association of money demand with interest rate shows that demand for money function is instability in Nepal. Thus, this study suggests that policy maker to correct price fluctuation through the control of various expenditure components, particularly, real final consumption expenditure might be an important strategy in the long run. However, the gross fixed capital formation has no impact on demand for money in the long-run.

scholarly journals The Influences of FDI, GFCF, OPEN on Vietnamese Economic Growth

2021 ◽  
Vol 12 (3) ◽  
pp. 1-13
Author(s):  
Toan Duc Le ◽  
Phu Huu Nguyen ◽  
Yen Thi Phi Ho ◽  
Thuyen Ngoc Nguyen
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
World Bank ◽  
Direct Investment ◽  
Trade Openness ◽  
Capital Formation ◽  
Fixed Capital ◽  
Annual Data ◽  
Fixed Capital Formation ◽  
Short Run

The aim of study is to research the influences of Foreign Direct Investment (FDI), Gross Fixed Capital Formation (GFCF), Trade Openness of the Economy (OPEN) on Vietnam economic growth. This study uses the annual data for the period 1986 to 2019, obtained from World Bank and Vietnam General Statistics Office. The study shows that FDI, GFCF and OPEN together influence to Vietnam economic growth in the period 1986 – 2019 at significant level of 5%; in which the FDI and GFCF determinants have influenced greatly. In the short–run, the results indicate that there are bidirectional causality relationships running between FDI and GDP, OPEN and GDP, OPEN and GFCF, and there are undirectional causality relationships running from GDP to GFCF, from GFCF to FDI, from FDI to OPEN. The study’s results confirm that FDI as more reliable and less violate source of capital and can extend the Vietnam economic growth. According to the study’s results, the authors suggest some recommendations to increase the Vietnam economic growth.

scholarly journals Relationship between Trade Openness, Financial Development and Economic Growth of Nepal: Evidence from a Developing Country

2020 ◽  
Vol 2 (2) ◽  
pp. 206-224
Author(s):  
Shreezal G.C.
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Developing Country ◽  
Financial Development ◽  
Capital Formation ◽  
Fixed Capital ◽  
Technological Factors ◽  
Long Run ◽  
Fixed Capital Formation ◽  
The Impact

Background: Capital investment, financial and technological developments are essential drivers for the economic growth of developing countries like Nepal. These factors, directly and indirectly, contribute to the growth of the country. Technological factors such as FDI and trade allow technology and knowledge transfers to Nepal along with foreign investments, goods and services. The financial sector encourages investors by providing loans that further generates investment in the country. Similarly, the development of human capital further increases labor productivity. Nepal, being a developing country, lacks advanced infrastructure and technology, that are vital for pushing the economic growth in the country. Objective: This paper examined the effect of capital, labor, foreign direct investment, financial development and trade on the economic growth of Nepal using the endogenous growth model. Methods: The study employedthe ARDLboundstesting approach to test the long-run relationships introducing an error correction model to estimate both short and long-term relationships among the variables.The TY non-granger causality test was used to ensure robustness and check the direction of causality. Results: The results showed that gross fixed capital formation, population and financial development were significant and inducedpositive economic growth in the long run at a 1% level of significance whereas, the impact of FDI on economic growth was negative and significant at 1%. Conclusions: The study concludes that an increase in gross fixed capital formation, population and broad money supply positively impacts the economic growth of Nepal. However, technological factors such as FDI and trade do not adequately explain the economic growth due to low FDI inflows, political instability, poor infrastructure and import dependency. Implications: The study emphasized domestic investment and financial development of the country as they were found to be highly significant in the long run. Also, the human capital of the country should be developed by providing education and training as the population was found to be highly significant. The study also indicated that Nepal should push export as its share in the trade is very less. Moreover, policies such as legal reforms, incentives to foreign investors and infrastructural development to attract FDIs in Nepal should be formulated.

An Empirical Investigation of Global Production Networks in Indian Manufacturing Sector

2021 ◽  
pp. 001946622110624
Author(s):  
Vaibhav Sinha ◽  
Balaga Mohana Rao
Keyword(s):  
Supply Chain ◽  
Industrial Production ◽  
Manufacturing Sector ◽  
Value Added ◽  
Production Networks ◽  
Global Production Networks ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Long Run ◽  
Short Run

This article attempts to dive into the operation of global production networks in India with manufacturing sector in the primary scope of focus. It aims to analyse the long-run and short-run relationship among the factors which form a global supply chain and their effects on a supply chain, using yearly data from 1984 to 2017. Our primary results from the estimations show that all the factors incorporated into the study are important for initiation and effective execution of a supply chain. The autoregressive distributed lag model shows that Index of Industrial Production (IIP), export–import ratio, KOF index and electricity index affect a supply chain positively whereas USD–INR exchange rate and unemployment rate affect gross value added negatively. The error correction model shows long-run relationship between IIP and export–import ratio. The study also highlights the importance of trade balance and industrial production in the long run.

scholarly journals FAKTOR YANG MEMPENGARUHI PERTUMBUHAN EKONOMI SUMATERA UTARA

2020 ◽  
Vol 3 (3) ◽  
Author(s):  
Elly Suharyadi
Keyword(s):  
Economic Growth ◽  
Natural Resources ◽  
Fixed Effects ◽  
Capital Formation ◽  
Model Analysis ◽  
Fixed Capital ◽  
Fixed Effects Model ◽  
Fixed Capital Formation ◽  
North Sumatra ◽  
Nonsignificant Effect

The results from the fixed effects model analysis show that the natural resources,gross fixed capital formation, and technology have a significant and positive effectsimultaneously on economic growth in North Sumatra. While labor has a nonsignificant effect on economic growth in North Sumatra. Effect of natural resources, gross fixed capital formation, and technology on economic growth is inelastic and shows a diminishing return for the all the sources of growth. The largest source of economic growth that affects economic growth in North Sumatra is gross fixed capital formation by 0.497 and the largest increase in economic growth due to changes in the sources of economic growth is Pematangsiantar by 5,235 percent, while the smallest is Tanjungbalai City by 2,234 percent.

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