Natural Resource Rents-Capital Flight Nexus in Selected ECOWAS Countries: Evidence from Non-Linear ARDL Approach

2021 ◽  
Vol 10 (2) ◽  
pp. 81-97
Author(s):  
Abdulfatai A Adedeji ◽  
Sherifat W Kogbodoku
Keyword(s):  
Natural Resources ◽  
Natural Resource ◽  
Capital Flight ◽  
Asymmetric Effect ◽  
Distributed Lag ◽  
Resource Rents ◽  
Long Run ◽  
Short Run ◽  
Natural Resource Rents ◽  
Symmetric Effect

The challenge of capital flight in the ECOWAS sub-region is worrisome. Huge revenue from natural resources also contributes to the relocation of available resources necessary for the development of the region. The study identifies the revenue from natural resources as a key driver of capital flight in the region. Hence, this study analyzed the effect of natural resource rents on capital flight in ECOWAS countries accounting for the role of asymmetry. Also, the study employed the nonlinear autoregressive distributed lag (NARDL) model to account for short-run and long-run asymmetries. The results revealed the presence of asymmetry in five countries, while two countries displayed symmetric effects. It also showed that the symmetric effect of natural resource rents on capital flight is weak for Guinea and Nigeria in the short-run while the long-run effect is not more pronounced for Nigeria. In the case of asymmetric effect, natural resource rents amplified capital flight in Cape Verde and Sierra Leone. Further evidence shows that the non-linearity of natural resource rents does not encourage capital flight in Burkina Faso, Cote d’Ivoire, and Ghana. Hence, the countries should promote transparency and accountability in the management of proceeds from natural resources to enhance development in the region.

Nigerian Governance Challenge: Exploring the Role of Natural Resource Rents

2020 ◽  
Vol 12 (3) ◽  
pp. 335-358
Author(s):  
Fisayo Fagbemi ◽  
Grace Omowumi Adeoye
Keyword(s):  
Natural Resource ◽  
Good Governance ◽  
Political Commitment ◽  
Causality Test ◽  
Resource Rents ◽  
Long Run ◽  
Short Run ◽  
Resource Wealth ◽  
Natural Resource Rents ◽  
Natural Resource Wealth

Nigeria is a glaring example of a country where weak public institutions are pervasive in spite of its huge natural resource wealth. The presence of natural resource abundance has exacerbated the overwhelming development challenge in the economy. While the upshot of most empirical findings of the resource impact covers how the growth path is determined through the channel of institutions, the question as to why resource rents often fail to stimulate improved governance is more critical than ever. Hence, the study examines the effect of natural resource rents on the quality of governance in Nigeria for the period 1984–2017, using ARDL bounds test approach, Dynamic Least Squares (DOLS), and Granger Causality test based on Vector Error Correction Model (VECM). Results reveal that natural resource rents have an insignificant effect on governance indicators in the long-run as well in the short-run, suggesting that natural resource windfalls have a shallow effect on the development of good governance. However, further evidence indicates that pervasive institutional gaps in Nigeria could be stimulated or caused by the overdependence on natural resource rents and entrenched mismanagement tendencies. Thus, the study suggests that maintaining strong political commitment, curtailing overdependence on natural resources, and ensuring sound management of natural resource wealth are central for improved governance.

Dutch Disease phenomenon and demand for international business travels: Panel ARDL/PMG estimation

2021 ◽  
pp. 135481662098313
Author(s):  
Hassan F Gholipour ◽  
Reza Tajaddini ◽  
Usama Al-mulali
Keyword(s):  
International Business ◽  
Natural Resource ◽  
Positive Impact ◽  
Dutch Disease ◽  
Annual Data ◽  
Panel Ardl ◽  
Resource Rents ◽  
Long Run ◽  
Short Run ◽  
Natural Resource Rents

This article explores the long-run and short-run effect of natural resource rents on inbound and outbound business travels in resource-abundant economies. By applying panel ARDL/PMG models for 25 countries with annual data for 2005–2017, our results show that increases in dependency on natural resources lead to lower demand for inbound and outbound business travels in the long run. The short-run analyses indicate that while natural resource rents have a significant and positive impact on outbound business travels, they do not affect inbound business travels.

scholarly journals Dilemma of Natural Resource Abundance: A Case Study of Kuwait

SAGE Open ◽  
2020 ◽  
Vol 10 (1) ◽  
pp. 215824401989970
Author(s):  
Ruba A. Aljarallah ◽  
Andrew Angus
Keyword(s):  
Human Capital ◽  
Natural Resource ◽  
Institutional Quality ◽  
Resource Abundance ◽  
Distributed Lag ◽  
Resource Rents ◽  
Long Run ◽  
Short Run ◽  
Per Capita ◽  
Using Data

There is a lively debate about the relationship between a nation’s natural resource abundance and economic growth. Some view natural resource abundance as a curse, whereas others view it as a blessing. This study examines the economic, social, and political effects of resource abundance in an oil-rich country, Kuwait, using data from 1984 to 2014. This study analyzes the short- and long-run impacts of resource rents on per capita gross domestic product (GDP), productivity, human capital, and institutional quality. The study reveals through autoregressive distributed lag modeling and error correction modeling that resource rents increase per capita GDP merely in the short-run; however, resource rents deteriorate productivity, human capital, and institutional quality in both the short and the long-run. These results indicate that, for Kuwait, the overreliance on its natural resources has been detrimental over the long-run. The study suggests that there is a need to improve the quality of institutions and enhance the level of human capital to get economic sustainability and development over time.

Foreign Capital, Natural Resource Rents and Financial Development: A New Approach

2020 ◽  
pp. 097215092096136
Author(s):  
Muhammad Shahbaz ◽  
Mohammad Ali Aboutorabi ◽  
Farzaneh Ahmadian Yazdi
Keyword(s):  
Financial Development ◽  
Natural Resource ◽  
Capital Accumulation ◽  
Foreign Capital ◽  
New Approach ◽  
Resource Rents ◽  
Long Run ◽  
Natural Resource Rents ◽  
Rich Countries ◽  
The Impact

This article explores the impact of financial development on the ‘natural resources rents–foreign capital accumulation nexus’ in selected natural resource–rich countries during 1970Q1–2016Q4. In doing so, we propose a new approach by applying the autoregressive distributed lag (ARDL) rolling regression technique for our empirical purpose. The results show that financial development has a positive and significant effect on the way natural resource rents affect foreign capital in the case of Australia, Chile, Ecuador, Egypt and Peru in both the short run and the long run. We achieve the same results in the case of Colombia and Iran too, but just in the long run. Also, short-term and long-term negative effects of financial development on the rents–foreign capital nexus are witnessed just in the case of Algeria. We provide some empirical evidence for further robustness of our findings. Finally, we suggest that there is a necessity for the development of the financial system in natural resource–rich countries to reach higher levels of foreign capital, which has a crucial role in their economic growth.

No taxation, no representation: An investigation of the relationship between natural resources and fiscal decentralization

2018 ◽  
Vol 36 (7) ◽  
pp. 1234-1255
Author(s):  
Mohammad Arzaghi ◽  
Andrew Balthrop
Keyword(s):  
Natural Resources ◽  
Natural Resource ◽  
Local Governments ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Government Expenditures ◽  
Government Control ◽  
Resource Rents ◽  
Natural Resource Rents ◽  
The Relationship

Rents from natural resources can alter the relationship between central and local governments by providing a new source of government financing. We develop a model to explore the relationship between fiscal decentralization and resource abundance. Our model indicates that natural resource rents can detach central government expenditures from the tax base so that the central government can spend more to persuade a fractious periphery to remain under central government control. Thus, other things being equal, higher natural resource rents can result in less decentralized government expenditures. We empirically explore the relationship between fiscal decentralization and natural resource rents using a panel of 60 countries over the past 40 years. Empirical results support our economic model: A 1% increase in natural resource rents as a fraction of gross domestic product results in government expenditures that are 0.53% less decentralized.

scholarly journals Short-term effects of national-level natural resource rents on life expectancy: A cross-country panel data analysis

PLoS ONE ◽  
2021 ◽  
Vol 16 (5) ◽  
pp. e0252336
Author(s):  
Isaac Lyatuu ◽  
Georg Loss ◽  
Andrea Farnham ◽  
Mirko S. Winkler ◽  
Günther Fink
Keyword(s):  
Economic Growth ◽  
Life Expectancy ◽  
Natural Resources ◽  
Population Health ◽  
Natural Resource ◽  
Short Term ◽  
Resource Rents ◽  
Natural Resource Rents ◽  
Cross Country ◽  
The Relationship

While a substantial amount of literature addresses the relationship between natural resources and economic growth, relatively little is known regarding the relationship between natural resource endowment and health at the population level. We construct a 5-year cross-country panel to assess the impact of natural resource rents on changes in life expectancy at birth as a proxy indicator for population health during the period 1970–2015. To estimate the causal effects of interest, we use global commodity prices as instrumental variables for natural resource rent incomes in two-stage-least squares regressions. Controlling for country and year fixed effects, we show that each standard deviation increase in resource rents results in life expectancy increase of 6.72% (CI: 2.01%, 11.44%). This corresponds to approximately one additional year of life expectancy gained over five years. We find a larger positive effect of rents on life expectancy in sub-Saharan Africa (SSA) compared to other world regions. We do not find short-term effects of rents on economic growth, but show that increases in resource rents result in sizeable increases in government revenues in the short run, which likely translate into increased spending across government sectors. This suggests that natural resources can help governments finance health and other development-oriented programs needed to improve population health.

Exchange Rate Volatility and Tourism Demand in India: Unraveling the Asymmetric Relationship

2019 ◽  
Vol 59 (7) ◽  
pp. 1282-1297 ◽  
Author(s):  
Chandan Sharma ◽  
Debdatta Pal
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Volatility ◽  
Point Of View ◽  
Tourism Demand ◽  
Asymmetric Effect ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Long Run ◽  
Short Run ◽  
Lag Model

This study explores the asymmetric effect of exchange rate volatility on tourism demand in India from January 2006 to April 2018. Tourism demand is captured from a twin perspective—quantity and value. While quantity is represented by foreign tourist arrival in India, earnings from foreign tourists are used to represent value. The study is unique from a methodological point of view as it makes the first ever application of the nonlinear autoregressive distributed lag model of Shin, Yu, and Greenwood-Nimmo (2014), in the tourism demand literature to capture nonlinearity simultaneously in the short- as well as long-run. Results of our analysis show that tourism demand in India responds asymmetrically to both nominal and real exchange rate volatility. Also, the long-run effects of exchange rate uncertainty are shown to be more damaging than the short-run effects. Our findings are fairly robust to alternative specifications.

scholarly journals The Potency of Eco-Innovation, Natural Resource and Financial Development on Ecological Footprint: A Quantile-ARDL Based Evidence from China

2021 ◽  
Author(s):  
Sahar Afshan ◽  
Tanzeela Yaqoob
Keyword(s):  
Natural Resources ◽  
Financial Development ◽  
Environmental Degradation ◽  
Natural Resource ◽  
Ecological Footprint ◽  
The Novel ◽  
Resource Rents ◽  
Long Run ◽  
Novel Method

Abstract Given the alarming deterioration of the environment, the present analysis investigates the role of eco-innovation, natural resources and financial development in influencing the environmental degradation of China. Applying the novel method of Quantile-ARDL, the current research is beneficial in portraying the dependence patterns of the variables with special emphasis on the nexus of eco-innovation and ecological footprint across numerous quantiles of the distribution which has not been examined so far in the literature. The empirical findings reveal that in the long run, eco-innovation reduces the level of ecological deterioration in China across all quantiles. On the other hand, the results suggest that the increase in credit to the private sector and natural resource rents augment environmental degradation. The outcomes imply that the over-dependence on natural resources and financial development can worsen the goals of sustainable development in China if the strategies of conservation and management are ignored. Moreover, witnessing the favourable role of eco-innovation, competent policies and regulations can be made towards sustainable efficient technologies and eco-friendly energy sources to halt global warming.

scholarly journals Do gross domestic product changes have asymmetric effects on India’s energy use?

2017 ◽  
Vol 1 (1) ◽  
pp. 1-10
Author(s):  
Manzoor Ahmad ◽  
Zia Ullah Khan ◽  
Shehzad Khan
Keyword(s):  
Gross Domestic Product ◽  
Energy Use ◽  
Time Series Data ◽  
Developing Economies ◽  
Domestic Product ◽  
Series Data ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Symmetric Effect

The existing literature on the linkage between Gross Domestic Product (GDP) and energy use in both industrialized and developing economies usually assumes that the impacts of gross domestic product changes are symmetric. In this study, we utilized nonlinear autoregressive distributed lag (NARDL) model and test whether or not the effect of variations in the gross domestic product on energy use is symmetric or asymmetric from the context of India. Using time series data over 1971-2014, the findings depict that the change in the gross domestic product has a symmetric effect on energy use both in short-run and the long-run. Our conclusions infer that there is no asymmetrical association between GDP and energy use, leading to support the symmetric impact of GDP on energy use.

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