scholarly journals Natural Resource Rent and Financial Development Nexuses in Bangladesh: The Role of Institutional Quality

2020 ◽  
Vol 4 (2) ◽  
pp. 108-114
Author(s):  
Muhammad Atif Khan ◽  
Kishwar Ali
Keyword(s):  
Natural Resources ◽  
Financial Development ◽  
Natural Resource ◽  
Institutional Quality ◽  
Financial Sector ◽  
Resource Rent ◽  
Natural Resource Rent ◽  
The Relationship

This paper examines the relationship between the development of the financial sector of the economy and natural rents. The financial sector of the economy is currently an important driver of economic growth. The study was conducted through the prism of addressing two key issues: determining the nature of the impact of natural rents on the financial development of Bangladesh; study of the role of the quality of institutional mechanisms in the relationship between natural rent and financial development of Bangladesh. The study period includes 35 years, from 1984 to 2019. The calculations were performed using an autoregressive model with a distributed lag, based on the order of integration and stationary properties of the variables of this study. The article presents the results of an empirical analysis, which showed a significant negative impact of the lease of natural resources on the financial development of Bangladesh. It is empirically confirmed that the quality of institutional mechanisms for the functioning of economic entities has a positive effect on the relationship between natural rents and the financial development of Bangladesh. The results of the study empirically confirm the hypothesis of insufficient natural resources in Bangladesh. The article emphasizes that the positive moderating role of the quality of the institutional base indicates that due to the strengthening of the institutional base, insufficient resources can become a benefit for the financial sector. The results of the study can be useful for representatives of the Government of Bangladesh from the standpoint of improving the quality of institutional infrastructure in order to ensure financial development, in which there will be positive effects from the implementation of natural resource lease processes. In the future, a study is planned to expand potential sources for the proper use of natural resource leases in Bangladesh. Keywords: natural resource rent, financial development, institutional quality, Pakistan.

scholarly journals Natural Resource Rent and Finance: The Moderation Role of Institutions

2020 ◽  
Vol 12 (9) ◽  
pp. 3897 ◽  
Author(s):  
Muhammad Atif Khan ◽  
Muhammad Asif Khan ◽  
Kishwar Ali ◽  
József Popp ◽  
Judit Oláh
Keyword(s):  
Financial Development ◽  
Natural Resource ◽  
Resource Curse ◽  
Institutional Quality ◽  
Threshold Level ◽  
Quality Level ◽  
Resource Rent ◽  
Natural Resource Rent ◽  
The Relationship

This study empirically examines the nexuses between the natural resource rent and financial development in the context of the emerging economy of Pakistan, between 1984 and 2018, by subsuming the important role of institutional quality in this context under symmetric, asymmetric, and threshold settings. The literature to date provides no evidence on the asymmetric relationship between natural resource rent and financial development, and the moderation role of institutional quality in this connection. We show that natural resource rent negatively influences financial development, whereas institutional quality boosts financial development and positively moderates the relationship in the context of Pakistan. Also, we find a single significant threshold value of 3.097 above which the relationship of resource rent-finance turns nonlinear—as up to this threshold the coefficient is 3.228, which declines slightly to 2.804 above the threshold level. This implies that regulators should maintain at least an institutional quality level of up to 3.097 to experience the most desired financial benefits of the natural resource rent in Pakistan. Moreover, the results corroborate the existence of asymmetries in the relationship between the natural resource rent and financial development. This empirical evidence provides fresh insight for stakeholders regarding ambiguous natural resource rents and financial sector development nexuses and recommends that planning organs in Pakistan and other countries in a similar development cadre should use institutional quality as a tool to avoid the resource curse and view natural resources as a blessing rather than a curse.

scholarly journals Natural Resources, Institutional Quality and Financial Development in GCC Member Countries: Visiting ‘Resource Curse Hypothesis’ by DCCE Estimation

2021 ◽  
Vol 7 (2) ◽  
pp. 131-145
Author(s):  
Muhammad Faheem ◽  
Imran Sharif Chaudhry ◽  
Sadam Hussain
Keyword(s):  
Financial Development ◽  
Natural Resource ◽  
Structural Breaks ◽  
Turning Point ◽  
Resource Curse ◽  
Institutional Quality ◽  
Resource Rent ◽  
Study Results ◽  
Resource Hypothesis ◽  
Natural Resource Rent

The main purpose of the study is to check whether natural resource rent affects the financial development or supporting the resource curse hypothesis by employing a recently developed estimation technique by Chudik and Pesaran (2015) from 1985 to 2017 in GCC member countries. The novelty of this methodology is to consider structural breaks and the heterogeneity issues that are common in panel data. The results of DCCE estimates are in support of the resource hypothesis that natural resource rent hurt financial development.  Additionally, this study takes moderation of institutional quality to check the threshold point or turning point where the natural resource rent effect becomes positive. Our results of interaction term postulate that a higher level of institutional quality mitigates the adverse effect of natural resource rent on financial development. The study results recommend the policy of natural resource rent in the presence of high institutional quality should continue because it improves the financial development in GCC member countries.

scholarly journals Testing the Existence of Natural Resource Curse in Indonesia: The Role of Financial Development

2021 ◽  
Vol 22 (2) ◽  
pp. 213-227
Author(s):  
Sedwivia Ridena ◽  
Nurarifin Nurarifin ◽  
Wawan Hermawan ◽  
Ahmad Komarulzaman
Keyword(s):  
Natural Resources ◽  
Financial Development ◽  
Natural Resource ◽  
Generalized Method Of Moments ◽  
Resource Curse ◽  
Natural Resource Curse ◽  
Economic Output ◽  
Negative Effect ◽  
The Relationship

Natural resources may become a blessing that can contribute to societies’ welfare increases. Yet natural resource abundance could also become a curse for countries’ economic development. Numerous studies have investigated the relationship between natural resources and economic performance. However, the results remain ambiguous and have no consensus in the literature. In specific, most literature focused only on testing the curse’s existence, while studies that involve the role of financial development in mediating the nexus remain scarce. To the best of our knowledge, this is a pioneer study in a developing country endowed by natural resources. Using panel data of 33 provinces from 2012 to 2018, this study implements the Generalized Method of Moments (GMM) technique to examine the existence of the natural resource curse and scrutinize the role of financial development in mitigating the curse. Results show that Indonesia potentially experiences a natural resource curse. Nonetheless, the negative effect of natural resources on economic growth could be mitigated by enhancing the role of financial development to reach a certain threshold over economic output. This study recommends policymakers to not only increase financial development across the provinces but also pay more serious attention to other factors causing the natural resource curse in Indonesia.

scholarly journals Central Bank Independence and Inflation: The Matters of Financial Development and Institutional Quality

2020 ◽  
Vol 9 (1) ◽  
pp. 1-14
Author(s):  
Agung Kunaedi ◽  
Darwanto Darwanto
Keyword(s):  
Central Bank ◽  
Financial Development ◽  
Inverse Relationship ◽  
Institutional Quality ◽  
Financial Sector ◽  
Central Bank Independence ◽  
Institutional Diversity ◽  
Dynamic Panel ◽  
The Relationship

The inverse relationship between the independence of the central bank (CBI) and inflation became a consensus that trusted throughout the world. However, there is no conclusive explanation of why and how central bank independence has succeeded in suppressing inflation. The purpose of this study is to examine the influence of financial development and institutional quality on the relationship between central bank independence and inflation. Using 20 Countries of Asia with institutional diversity, this study analyzed through a dynamic panel approach (GMM-Arellano and Bond Estimator). The result indicates that the inverse relationship between central bank independence and inflation depends on the development of the financial sector and also the institutional quality of each country. In other words, to make the central bank's independence work effectively in order to solve bias inflation, the improvement of the financial sector and also the institutional quality is needed.JEL Classification : E580, E310, E020 How to Cite:Kunaedi, A., & Darwanto. (2020). Central Bank Independence and Inflation: The Matters of Financial Development and Institutional Quality. Signifikan: Jurnal Ilmu Ekonomi, Vol. 9(1), 1-14. doi: http://dx.doi.org/10.15408/sjie.v9i1.12899.

scholarly journals Natural Resources, Institutional Quality and Financial Development in GCC Member Countries: Visiting ‘Resource Curse Hypothesis’ by DCCE Estimation

2021 ◽  
Author(s):  
Muhammad Faheem ◽  
Imran Sharif Chaudhry ◽  
Sadam Hussain
Keyword(s):  
Financial Development ◽  
Natural Resource ◽  
Structural Breaks ◽  
Turning Point ◽  
Resource Curse ◽  
Institutional Quality ◽  
Resource Rent ◽  
Study Results ◽  
Resource Hypothesis ◽  
Natural Resource Rent

Abstract The main purpose of the study is to check whether natural resource rent affects the financial development or supporting resource curse hypothesis by employing a recently developed estimation technique by Chudik and Pesaran (2015) over 1985 to 2017 in GCC member countries. The novelty of this methodology is to consider structural breaks and the heterogeneity issues that are common in panel data. The results of DCCE estimates are in support of resource hypothesis that natural resource rent hurt financial development. Additionally, this study takes moderation of institutional quality to check the threshold point or turning point where natural resource rent effect becomes positive. Our results of interaction term postulate that a higher level of institutional quality mitigates the adverse effect of natural resource rent on financial development. The study results recommend the policy of natural resource rent in the presence of high institutional quality should continue because it improves the financial development in GCC member countries.

scholarly journals Financial Development and Natural Resources Dynamics in Saudi Arabia: Visiting ‘Resource Curse Hypothesis’ by NARDL and Wavelet-Based Quantile-on-Quantile Approach

2021 ◽  
Vol 7 (1) ◽  
pp. 101-117
Author(s):  
Imran Sharif Chaudhry ◽  
Muhammad Faheem ◽  
Fatima Farooq
Keyword(s):  
Saudi Arabia ◽  
Financial Development ◽  
Natural Resource ◽  
Estimation Method ◽  
Resource Curse ◽  
Quantile Estimation ◽  
Nonlinear Behaviour ◽  
Resource Rent ◽  
Natural Resource Rent ◽  
The Impact

This study analyses the impact of natural resource rent on financial development to test the resource curse hypothesis in Saudi Arabia on quarterly data span from 1985Q1 to 2017Q4. We employ two novel methodologies at same time such as nonlinear autoregressive model (NARDL) and Wavelet-based quantile-on-quantile estimation to check the asymmetric behaviour of natural resource rent on financial development. The findings of NARDL confirm the nonlinear behaviour of natural resource rent with financial development. The results also show real GDP, gross capital formation and institutional quality affect financial development positively. The empirical results of Wavelet-based quantile-on-quantile estimation method also reveal the heterogeneous response of natural resource rent effect when decomposes into different quantiles that become positive to negative. The results further explain that the natural resource rent has a positive effect in short-run, but it exerts an adverse effect on financial development after attaining stability.

FINANCIAL INCLUSION, INSTITUTIONAL QUALITY AND FINANCIAL DEVELOPMENT: EMPIRICAL EVIDENCE FROM OIC COUNTRIES

2021 ◽  
pp. 1-28
Author(s):  
MINHAJ ALI ◽  
MUHAMMAD IMRAN NAZIR ◽  
SHUJAHAT HAIDER HASHMI ◽  
WAJEEH ULLAH
Keyword(s):  
Financial Development ◽  
Method Of Moments ◽  
Positive Impact ◽  
Generalized Method Of Moments ◽  
Institutional Quality ◽  
Financial Inclusion ◽  
Moderation Effect ◽  
The Relationship ◽  
Unique Study

This unique study examines the moderation effect of institutional quality (IQ) on the relationship between financial inclusion (FI) and financial development (FD) of 45 Organization of Islamic Cooperation (OIC) countries. For empirical analysis, panel data are used for the period 2000–2016. We use the Arellano–Bond generalized method of moments (GMM) and two-stage least-squares (2SLS) method in our estimations to draw multidimensional results. The empirical results confirm the significant positive relationship between FI, IQ and FD. Interestingly, we find that IQ moderates FI and has a significant positive impact on FD. Our findings are robust to alternative econometric specifications of FI, IQ and FD. Therefore, policymakers must sensibly understand the pivotal role of FI and IQ in establishing sustainable future development of OIC countries.

Natural resources and financial development: The role of institutional quality

2020 ◽  
Vol 56 ◽  
pp. 100641 ◽  
Author(s):  
Muhammad Atif Khan ◽  
Lulu Gu ◽  
Muhammad Asif Khan ◽  
Judit Oláh
Keyword(s):  
Natural Resources ◽  
Financial Development ◽  
Institutional Quality

scholarly journals Financial development and economic growth: Role of institutional quality

2009 ◽  
Vol 56 (3) ◽  
pp. 327-357 ◽  
Author(s):  
Abdelkarim Yahyaoui ◽  
Atef Rahmani
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Human Capital ◽  
Panel Data ◽  
Financial Development ◽  
Institutional Quality ◽  
The Real ◽  
Development Institutions

The objective of our work is to show the importance of a healthy institutional framework in the finance-growth relation. In this context, we start by presenting, a theoretical lighting on this subject while trying to define the concept of the governorship and to determine its various measurements. Then, we empirically test a model of growth of Solow increased by the human capital, treating relation between financial development, institutions and economic growth. The various estimates were made by Panel data Methods over the period of 1990 to 2006 for 22 developing countries. Following these estimates, it seems that the quality of the institutions is regarded as an important factor which must not be neglected in the study of the relation between the financial sphere and the real sphere.

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