scholarly journals Examining the Causal Relationship between Private Sector Credit Extended and Economic Growth in Namibia

2019 ◽  
Vol 11 (2(J)) ◽  
pp. 23-29
Author(s):  
Andreas . ◽  
J P S Sheefeni
Keyword(s):  
Economic Growth ◽  
Private Sector ◽  
Granger Causality ◽  
Granger Causality Test ◽  
Test Results ◽  
Causality Test ◽  
Long Run ◽  
Integration Test ◽  
Stationarity Test ◽  
Lending Rates

The paper examined causality between Private Sector Credit Extension (PSCE) and Economic growth using quarterly data for the period 2000:Q1-2017:Q4, in Namibia. The variables employed were Gross Domestic Product (GDP), Private Sector Credit Extended, Broad Money Supply (M2) and lending rates. The study tested for stationarity in order to determine the order of integration. Furthermore, a co-integration test was conducted on different sets of variables to establish the long run relationship. Granger causality test was also conducted to establish the direction of the relationships between the variables. The results for the stationarity test showed a combination of different orders of integration. The co-integration test revealed a stable long-run relationship among the variables. The Granger causality test results revealed one-directional causality running from PSCE to GDP. Therefore, one can conclude that that change in private sector credit extended can help predict economic growth.

The relationship between financial development and economic growth in Eswatini (formerly Swaziland)

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Siphe-okuhle Fakudze ◽  
Asrat Tsegaye ◽  
Kin Sibanda
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Financial Development ◽  
Granger Causality Test ◽  
Causality Test ◽  
Content Type ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
The Relationship

PurposeThe paper examined the relationship between financial development and economic growth for the period 1996 to 2018 in Eswatini.Design/methodology/approachThe Autoregressive Distributed Lag bounds test (ARDL) was employed to determine the long-run and short-run dynamics of the link between the variables of interest. The Granger causality test was also performed to establish the direction of causality between financial development and economic growth.FindingsThe ARDL results revealed that there is a long-run relationship between financial development and economic growth. The Granger causality test revealed bidirectional causality between money supply and economic growth, and unidirectional causality running from economic growth to financial development. The results highlight that economic growth exerts a positive and significant influence on financial development, validating the demand following hypothesis in Eswatini.Practical implicationsPolicymakers should formulate policies that aims to engineer more economic growth. The policies should strike a balance between deploying funds necessary to stimulate investment and enhancing productivity in order to enliven economic growth in Eswatini.Originality/valueThe study investigates the finance-growth linkage using time series analysis. It determines the long-run and short-run dynamics of this relationship and examines the Granger causality outcomes.

scholarly journals TRADE OPENNESS AND ECONOMIC GROWTH: EMPIRICAL EVIDENCE FROM INDIA

2014 ◽  
Vol 16 (1) ◽  
pp. 188-205 ◽  
Author(s):  
Qazi Muhammad Adnan Hye ◽  
Wee-Yeap Lau
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Granger Causality ◽  
Trade Openness ◽  
Granger Causality Test ◽  
Causality Test ◽  
Long Run ◽  
Rolling Window ◽  
Short Run ◽  
The Impact

The main objective of this study is to develop first time trade openness index and use this index to examine the link between trade openness and economic growth in case of India. This study employs a new endogenous growth model for theoretical support, auto-regressive distributive lag model and rolling window regression method in order to determine long run and short run association between trade openness and economic growth. Further granger causality test is used to determine the long run and short run causal direction. The results reveal that human capital and physical capital are positively related to economic growth in the long run. On the other hand, trade openness index negatively impacts on economic growth in the long run. The new evidence is provided by the rolling window regression results i.e. the impact of trade openness index on economic growth is not stable throughout the sample. In the short run trade openness index is positively related to economic growth. The result of granger causality test confirms the validity of trade openness-led growth and human capital-led growth hypothesis in the short run and long run.

scholarly journals Granger Causality Between Local Government Expenditure and Economic Growth in Indonesia

2018 ◽  
Vol 3 (4) ◽  
pp. 80-86
Author(s):  
Sri Kurniawati
Keyword(s):  
Economic Growth ◽  
Local Government ◽  
Granger Causality ◽  
Government Expenditure ◽  
Granger Causality Test ◽  
Reciprocal Relationship ◽  
Series Data ◽  
Causality Test ◽  
West Kalimantan ◽  
Integration Test

Objective - This study examines the causal relationship between government expenditure and economic growth in West Kalimantan between 2009 and 2015. This research resulted in the enactment of Wagner's Law and/or Keynes's Theory in West Kalimantan leading the local government to take the right policies as an effort towards improving economic development. Methodology/Technique - By using panel data that combines time series data and cross-site data, it will be estimated by the Granger causality test which begins with a stationary test and co-integration test. Based on the co-integration tests, the results suggest that there is a long-term relationship between government expenditure and economic growth. Meanwhile, based on the Granger causality test, there is no reciprocal relationship between government expenditure and economic growth. Findings - A direct relationship in the form of the influence of government expenditure on economic growth in West Kalimantan. Novelty - These results are in line with the Keynes's Theory through its national income function. Type of Paper: Empirical Keywords: Government Expenditure; Economic Growth; Co-integration; Causality. JEL Classification: F40, F43, F49.

scholarly journals Impact of Economic Reforms, FDI and Imports on GDP: Trends and Regression Analysis

2018 ◽  
Vol 7 (3) ◽  
pp. 20-25
Author(s):  
Preeti Sharma ◽  
Priyanka Sahni
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Time Series Data ◽  
Economic Reforms ◽  
Chinese Economy ◽  
Series Data ◽  
Causality Analysis ◽  
Causality Test ◽  
Long Run ◽  
Integration Test

The aim of this study is to explore the causal relationship between the exports, imports and economic growth of Chinese economy using time series data running from 1978 to 2016.Co integration, Granger Causality analysis and Vector Error Correction Mechanism (VECM) has been used in order to test the hypotheses about the presence of causality and co integration among the variables. The co integration test confirmed that exports, imports and GDP are co integrated, indicating an existence of long run equilibrium relationship among the variables and also confirmed by the Johansen co integration test results. The Granger causality test finally confirmed the presence of bi-directional causality between exports, imports and GDP. The study further shows that relative share of china’s exports in world exports has increased significantly after the introduction of economic reforms. Further, the rising exports have also made a significant contribution to the economic growth of Chinese economy due to forward and backward linkages.

scholarly journals Financial System Stability and Economic Growth in Nigeria

2020 ◽  
Author(s):  
Isaac Ikeafe NJANG ◽  
Eko Eko OMINI ◽  
Festus Victor BEKUN ◽  
Festus Fatai Adedoyin
Keyword(s):  
Economic Growth ◽  
Financial Crisis ◽  
Financial Stability ◽  
Financial System ◽  
Granger Causality Test ◽  
System Stability ◽  
Causality Test ◽  
Long Run ◽  
Integration Test ◽  
Sustainable Economic Growth

Abstract This study primarily seeks to evaluate the influence of financial system stability on economic growth in Nigeria from 1986 to 2016. Employing the use of Principal Component Analysis (PCA), this study constructs a Financial System Stability Index (FSSI) as measurement for financial stability. The indicators used in building the index capture three sectors of the Nigerian Financial System (NFS). The three sectors cover the banking sector, the capital market, the external sector and include a fourth component representing financial depth. The resulting index serves as a single qualitative measure for evaluating the level of stability in a nation’s financial system and proves capable of warning of an eminent financial crisis. Employing the use of four macroeconomic indicators, the index is then regressed against the Nigerian economic growth rate with an aim of discovering the short-run and long-run dynamics existing between both variables. The granger causality test, Johansson Co-integration test and Vector Error Correction Model (VECM) are the estimation techniques employed in achieving the objectives of this research. The granger causality test revealed a uni-directional causality between financial stability and economic growth in Nigeria. The Johansson Co-integration test showed that long-run co-integration relationship exists between financial stability and economic growth. Finally, the VECM results find that financial stability displays a negative relationship with economic growth and bears no significant effect on economic growth in Nigeria. The findings disclose that financial stability in Nigeria may be high and has resulted in the underutilization of financial assets thus hampering sustainable economic growth in Nigeria. In conclusion, the outcome of the findings shows that while financial stability may be necessary for initiating economic growth, it is not sufficient for sustaining economic growth in Nigeria. This research work recommends that the FSSI be employed as an additional tool for measuring the condition/state of financial stability in Nigeria and in predicting the onset of a potential financial crisis. The study further recommends that financial authorities must give attention to other aspects of financial development to facilitate sustainable economic growth in Nigeria.

The Relevance of the Tourism-Led Growth Hypothesis to Malaysia

2017 ◽  
pp. 188-202 ◽  
Author(s):  
Chor Foon Tang ◽  
Eu Chye Tan
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Granger Causality Test ◽  
Developed Countries ◽  
Causality Test ◽  
Full Sample ◽  
Aggregated Data ◽  
Long Run ◽  
Short Run ◽  
Disaggregated Data

This paper explored whether the tourism-led growth (TLG) hypothesis is empirically relevant to Malaysia based upon both full sample and rolling sample analyses. Data from January 1995 to December 2010 have been utilised for the purpose. Instead of relying upon aggregated data of tourist arrivals, disaggregated data of arrivals from 12 major tourism markets are relied upon for more insightful and accurate findings. The empirical results suggest that there was cointegration between Malaysia's economic growth and tourist arrivals from these tourism markets. However, the results of the full sample Granger causality test indicate that only 2 out of 12 tourism markets contributed to economic growth in the short-run. The TLG hypothesis is only supported in the long run by tourist arrivals from 10 out of the 12 tourism markets. The rolling-based Granger causality test shows that it is also these 10 markets situated mostly in developed countries that could provide a stable support for the TLG hypothesis.

Dynamic linkages among international crude oil, exchange rate and Norwegian stock market: evidence from ARDL bound testing approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shelly Singhal ◽  
Sangita Choudhary ◽  
Pratap Chandra Biswal
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Crude Oil ◽  
Granger Causality ◽  
Granger Causality Test ◽  
Oil Price ◽  
Causality Test ◽  
Content Type ◽  
Long Run ◽  
Integration Test

Purpose The purpose of this paper is to examine the long-run association and short-run causality among oil price, exchange rate and stock market in Norwegian context. Design/methodology/approach This work uses auto regressive distributed lag (ARDL) bound co-integration test to examine the long-run association among international crude oil, exchange rate and Norwegian stock market. Further to test the causality, Toda–Yamamoto Granger causality test is used. Daily data ranging from 1 January, 2011 to 31 December, 2018 is used in this study. Findings Findings of this study suggest the existence of long-run equilibrium relationship among oil price, exchange rate and Norwegian stock market when oil price is taken as dependent variable. Further, this study observes the bi-directional causality between Norwegian stock market and exchange rate and unidirectional causality between oil and Norwegian stock market (from oil to stock market). Originality/value To the best of the authors’ knowledge, this the first study in context of Norway to explore the long-run association and causal relationships among international crude oil price, exchange rate and stock market index. Particularly, association of exchange rate and stock market largely remains unexplored for Norwegian economy. Further, majority of studies conducted in Norwegian setup have considered the period up to year 2010 and association of these variables is found to be time varying. Finally, this study uses ARDL bound co-integration test and Toda–Yamamoto Granger causality test. These methodologies have been used in literature in context of other countries like India and Mexico but not yet applied to study the Norwegian case.

Does any nexus between electricity consumption and economic growth exist? Evidence from Haryana using VAR model

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kamaljit Singh
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Renewable Energy Sources ◽  
Electricity Consumption ◽  
Granger Causality Test ◽  
Economic Downturn ◽  
Causality Test ◽  
Content Type ◽  
Long Run ◽  
Per Capita

Purpose In the fast-changing technological environment, electricity is the essence of the world economy and a significant means for all the modern world’s possessions. The ongoing economic downturn focuses on energy’s role in the economy. This study aims to explore the nexuses between per capita electricity usage and per capita state gross domestic product (SGDP) in Haryana, India. Design/methodology/approach The statistics from 1989 to 2015 have been analyzed using Johansen cointegration, vector autoregression and paired Granger-causality test. Findings The Granger causality test results show that a long-run association is absent. A short-run unidirectional relationship runs from per capita SGDP to per capita electricity usage. Practical implications As a policy suggestion, the policymakers may encourage energy conservation measures and renewable energy sources to lead the country’s sustainable energy supply. Moreover, Haryana can increase its influence in this sector and enter rapidly in the growing markets worldwide by stimulating the production and adoption of digital solutions for energy efficiency. Originality/value To the best of the author’s awareness, this research is one of its nature regarding systematically analyzing electricity usage and economic growth relationship in Haryana.

scholarly journals Interactions between Economic Growth, FDI and Islamic Banking Development in Turkey

2016 ◽  
Vol 11 (8) ◽  
pp. 230 ◽  
Author(s):  
Salih Kalayci ◽  
Behic Efe Tekin
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Linear Regression Analysis ◽  
Granger Causality Test ◽  
Islamic Banking ◽  
Causality Test ◽  
Bank Deposits ◽  
Integration Test ◽  
Considerable Impact ◽  
Banking Development

<span lang="EN-US">In this research paper, the quarter data has been collected from Turkish Central Bank in order to determine the relationship between economic growth, FDI and participation banks of Turkey over the periods of 2002 - 2014. Several econometrical models have been implemented to reveal this relation among variables. In this context, it has been found that there is a long-term linkage between economic growth, FDI and breakdown of participation funds in Islamic banking by implementing Johansen co-integration test. On the other hand, according to Granger causality test (GCT), when the lag number is 3, there is a bidirectional relationship between GDP and participation funds in Islamic banking. According to results of both Johansen co-integration and Granger causality test, the contribution of Islamic banking to*the economic growth of Turkey is so vital. The linear regression analysis has to be used to reply the research questions. The results indicated that there is the considerable impact of GDP on Islamic bank deposits in Turkey which is founded 0.0006.</span>

Testing the Tourism-Led Growth hypothesis: The case of Malta

2009 ◽  
Vol 59 (3) ◽  
pp. 331-343 ◽  
Author(s):  
S. Katircioglu
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Relevant Literature ◽  
International Tourism ◽  
Test Results ◽  
Causality Test ◽  
Mediterranean Countries ◽  
Long Run ◽  
Equilibrium Relationship ◽  
Causality Tests

Tourism-Led Growth (TLG) hypothesis results are inconclusive for Mediterranean countries in the relevant literature. This study contributes to the literature by employing the bounds test for co-integration and Granger causality tests to investigate level relationship and the direction of causality between international tourism and economic growth in the case of Malta. Results reveal that a long-run equilibrium relationship exists between international tourism and economic growth in the case of Malta. On the other hand, Granger causality test results suggest that both the Tourism-Led Growth and output-driven tourism hypotheses can be inferred for Malta since there is bidirectional causation between international tourism and economic growth.

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