scholarly journals Complementarity Between Foreign Aid and Financial Development as a Driver of Economic Growth in Selected Emerging Markets

2018 ◽  
Vol 21 (4) ◽  
pp. 45-61
Author(s):  
Kunofiwa Tsaurai
Keyword(s):  
Economic Growth ◽  
Emerging Markets ◽  
Foreign Aid ◽  
Financial Development ◽  
Positive Impact ◽  
Financial Sector ◽  
Ordinary Least Squares ◽  
Private Debt ◽  
Domestic Credit ◽  
Private Credit

This paper studied whether the complementarity between financial development and foreign aid promotes economic growth in selected emerging markets using the panel Fully Modified Ordinary Least Squares (FMOLS) approach, with data ranging from 1994 to 2014. Although (1) aid‑growth and (2) finance‑growth studies have been conclusively dealt with, the role of financial development in the aid‑growth nexus has been hardly researched. Is financial development a channel through which foreign aid positively influences economic growth? The current study seeks to address these issues using selected emerging markets as a case study. The complementarity between foreign aid and financial development (domestic credit provided by the financial sector, domestic private credit provided by banks, outstanding domestic private debt securities and stock market turnover) resulted in a significant positive impact on economic growth. The study, therefore, urges selected emerging markets to implement policies which deepen the financial sector in order to allow foreign aid to positively contribute towards economic growth.

scholarly journals FDI Inspired Energy Consumption in Selected Emerging Markets: Does Financial Development Matter?

2018 ◽  
Vol 21 (3) ◽  
pp. 5-23
Author(s):  
Kunofiwa Tsaurai
Keyword(s):  
Energy Consumption ◽  
Stock Market ◽  
Emerging Markets ◽  
Financial Development ◽  
Fixed Effects ◽  
Ordinary Least Squares ◽  
Negative Influence ◽  
Positive Influence ◽  
Private Debt ◽  
The Impact

The study investigated the impact of the complementarity between foreign direct investment (FDI) and financial development on energy consumption in emerging markets. Although the relevance of the FDI‑led energy consumption hypothesis is no longer contestable, the combined influence of FDI and financial development on energy consumption is not yet resolved. Random and fixed effects show that the interaction between outstanding domestic private debt securities and FDI had a significant positive influence on energy consumption whereas pooled ordinary least squares (OLS) noted that the interaction between FDI and outstanding domestic public debt securities positively and significantly affected energy consumption. The dynamic generalized methods of moments (GMM) shows that the interaction between (1) FDI and stock market capitalization and (2) FDI and stock market value traded had a significant negative influence on energy consumption. The study urges emerging markets to deepen the bond sector market in order to enhance FDI‑led energy consumption.

scholarly journals Financial Sector Reforms and Economic Growth: Evidence from Nigeria

2018 ◽  
Vol 9 (2) ◽  
pp. 171-176
Author(s):  
Enitan O. Olowofela ◽  
Edward Adedoyin Adebowale ◽  
Ayoola Quadri Adejonwo
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Structural Adjustment ◽  
Positive Impact ◽  
Secondary Data ◽  
Financial Sector ◽  
Ordinary Least Squares ◽  
National Bureau ◽  
Financial Reforms ◽  
The Impact

This research analyzed the impact of financial reforms on economic growth in Nigeria. The scope of this research covered the period between1986– 2016.This period was chosen because liberalization of Nigeria financial sector began in 1986 with the introduction of Structural Adjustment Programme (SAP), which policy thrust included deregulation of interest rates. Secondary data were collected from Central Bank of Nigeria statistical bulletin and National Bureau of Statistics publications. This research used econometrics analysis. Ordinary Least Squares (OLS) technique and Cochrane Orcutt iterative method were used to analyze the data. The results show that implemented financial reforms during the period has positive impact on economic growth. This research recommends that government should enhance financial reforms and macroeconomic stability and be sensitive to the behavior of interest rates especially, lending rates for overall economic growth in the country.

The nexus between financial development and energy consumption: Estimating the role of foreign direct investment, economic growth and urbanization

2021 ◽  
pp. 0958305X2110453
Author(s):  
Jaleel Ahmed ◽  
Shuja ur Rehman ◽  
Zaid Zuhaira ◽  
Shoaib Nisar
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Energy Consumption ◽  
Financial Development ◽  
Latin American ◽  
Direct Investment ◽  
Negative Impact ◽  
Positive Impact ◽  
Supply And Demand ◽  
The Impact

This study examines the impact of financial development on energy consumption for a wide array of countries. The estimators used for financial development are foreign direct investment, economic growth and urbanization. The study employed a panel data regression on 136 countries with time frame of years 1990 to 2019. The model in this study deploys system GMM technique to estimate the model. The results show that financial development has a significant negative impact on energy consumption overall. Foreign direct investment and urbanization has significant impact on energy consumption. Also, economic growth positive impact on energy consumption its mean that economic growth promotes energy consumption. When dividing further the sample into different groups of regions such as Asian, European, African, North/Latin American and Caribbean countries then mixed results related to the nexus between financial development and energy consumption with respect to economic growth, urbanization and foreign direct investment. The policymakers in these different groups of countries must balance the relationship between energy supply and demand to achieving the sustainable economic development.

scholarly journals What Determines the Financial and Insurance Services Exports: The Case of the United Kingdom

2021 ◽  
Vol 3 (6) ◽  
pp. 1071-1081
Author(s):  
Emmanouil Karakostas
Keyword(s):  
United Kingdom ◽  
Financial Services ◽  
Positive Impact ◽  
Essential Element ◽  
Political Stability ◽  
Financial Sector ◽  
State Intervention ◽  
Ordinary Least Squares ◽  
The United Kingdom ◽  
Almost All

The financial sector is a very basic pillar of the international financial system. Almost all countries of the present international economic system participate in international financial services. Today's era, due to intense globalization, constant capital movements, continuous commercial integration and the ever-increasing financial interconnection, have made financial and insurance services an essential element of the present reality. The financial sector is an industry that is very 'sensitive' to the macroeconomic and political stability of countries. This means that countries that are considered unstable cannot have a positive impact on their financial activities. One country that has a strong position in the financial sector is the United Kingdom (UK). The question that can be asked is this: what are the factors that determine the optimal functioning of financial and insurance activities. One answer could be the strong financial institutions of a country. Another answer is the corruption indicator. Or even the existence of intervention by the state apparatus in the financial functions. Of course, these factors must have tangible proof of the functioning of the economy. State intervention, for example, does not entirely mean that it is dysfunctional. This study will seek to create a framework for the analysis of financial services factors. The methodology applied is The Multiple Linear Regression - Ordinary Least Squares (OLS).

scholarly journals PENGARUH FINANCIAL DEVELOPMENT TERHADAP PERTUMBUHAN EKONOMI DI INDO

2020 ◽  
Vol 2 (1) ◽  
pp. 75
Author(s):  
Nia Putri Kunanti ◽  
Melti Roza Adry
Keyword(s):  
Economic Growth ◽  
Money Supply ◽  
Financial Development ◽  
Linear Regression Analysis ◽  
Trade Openness ◽  
Control Variable ◽  
Secondary Data ◽  
Negative Effect ◽  
Private Credit ◽  
Positive Effect

This study aims to determine how the influence of financial development on economic growth in Indonesia. Financial development indicators are M2 money supply, bank assets, private credit and trade openness. Where inflation and trade openness as a control variable and economic growth as the dependent variable. The data used in this study are secondary data from 2005 quarter 1 to 2018 quarter 4 which were collected through documentation and related agencies. This study uses multiple linear regression analysis and error correction models. The results of this study indicate that: (1) the money supply M2 has a negative effect on economic growth in Indonesia; (2) Bank assets have a negative effect on economic growth in Indonesia; (3) Private credit has a positive effect on economic growth in Indonesia; (4)) trade openness has a positive effect on economic growth in Indonesia.

scholarly journals The Impact of Industrialization, Trade Openness, Financial Development, and Energy Consumption on Economic Growth in Indonesia

Economies ◽  
2021 ◽  
Vol 9 (4) ◽  
pp. 174
Author(s):  
Khalid Eltayeb Elfaki ◽  
Rossanto Dwi Handoyo ◽  
Kabiru Hannafi Ibrahim
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Least Squares ◽  
Financial Development ◽  
Correction Term ◽  
Trade Openness ◽  
Ordinary Least Squares ◽  
Distributed Lag ◽  
Long Run ◽  
The Impact

This study aimed to scrutinize the impact of financial development, energy consumption, industrialization, and trade openness on economic growth in Indonesia over the period 1984–2018. To do so, the study employed the autoregressive distributed lag (ARDL) model to estimate the long-run and short-run nexus among the variables. Furthermore, fully modified ordinary least squares (FMOLS), dynamic least squares (DOLS), and canonical cointegrating regression (CCR) were used for a more robust examination of the empirical findings. The result of cointegration confirms the presence of cointegration among the variables. Findings from the ARDL indicate that industrialization, energy consumption, and financial development (measured by domestic credit) positively influence economic growth in the long run. However, financial development (measured by money supply) and trade openness demonstrate a negative effect on economic growth. The positive nexus among industrialization, financial development, energy consumption, and economic growth explains that these variables were stimulating growth in Indonesia. The error correction term indicates a 68% annual adjustment from any deviation in the previous period’s long-run equilibrium economic growth. These findings provide a strong testimony that industrialization and financial development are key to sustained long-run economic growth in Indonesia.

scholarly journals The Hypothesis of Jobless Economic Growth in the Global Triad Countries

Equilibrium ◽  
2014 ◽  
Vol 9 (3) ◽  
pp. 109-129
Author(s):  
Piotr Misztal
Keyword(s):  
Economic Growth ◽  
International Finance ◽  
Positive Impact ◽  
Ordinary Least Squares ◽  
Research Association ◽  
Literature Study ◽  
Econometric Methods ◽  
The Usa ◽  
Annual Frequency ◽  
The Eu

The aim of the study is to analyze the hypothesis of jobless economic growth in economic theory and in the Global Triad countries (U.S. , EU-15, Japan, China , India). In the article the research method based on the literature study in the field of macroeconomics and international finance were used, as well as econometric methods (Ordinary Least Squares). All the statistics used in the study had an annual frequency and covered the period from 1990 to 2012. These data came from the statistical database of the Business Membership and Research Association – The Conference Board Total Economy Database. On the basis of the study the phenomenon of jobless economic growth in China and India was revealed. However, in the case of the USA, the EU-15 and Japan the positive impact of economic growth on changes in employment was confirmed.

scholarly journals Greening the Financial System in USA, Canada and Brazil: A Panel Data Analysis

Mathematics ◽  
2020 ◽  
Vol 8 (12) ◽  
pp. 2217
Author(s):  
Ioan Batrancea ◽  
Larissa Batrancea ◽  
Malar Maran Rathnaswamy ◽  
Horia Tulai ◽  
Gheorghe Fatacean ◽  
...  
Keyword(s):  
Climate Change ◽  
Economic Growth ◽  
Global Warming ◽  
Data Analysis ◽  
Panel Data ◽  
Co2 Emissions ◽  
Panel Data Analysis ◽  
Financial Sector ◽  
Financial Systems ◽  
Domestic Credit

Each country designs its own scheme to achieve green financing and, in general, credit is considered to be a fundamental source of greening financial systems. The novelty of this study resides in that we examined green financing initiatives in USA, Canada and Brazil by focusing on major components of the financial systems before, during and after the 2008 world financial crisis. By means of panel data analysis conducted on observations ranging across the period 1970–2018, we investigated variables such as domestic credit from banks, domestic credit from the financial sector, GDP, N2O emissions, CO2 emissions and the value added from agriculture, forest and fishing activities. According to our findings, domestic credit from banks was insufficient to achieve green financing. Namely, in order to increase economic growth while reducing global warming and climate change, the financial sector should assume a bigger role in funding green investments. Moreover, our results showed that domestic credit from the financial sector contributed to green financing, while CO2 emissions remained a challenge in capping global warming at the 1.5 °C level. Our empirical study supports the idea that economic growth together with policies targeting climate change and global warming can contribute to green financing. Over and above that, governments should strive to design sustainable fiscal and monetary policies that promote green financing.

scholarly journals Financial Sector Development and Economic Growth in Bangladesh: A Factor Analysis Based Causality Approach

2017 ◽  
Vol 9 (8) ◽  
pp. 229 ◽  
Author(s):  
Altaf Hossain ◽  
Suman Biswas ◽  
Md. Nasif Hossain ◽  
Arnab Kumar Poddar
Keyword(s):  
Economic Growth ◽  
Factor Analysis ◽  
Form Factor ◽  
Granger Causality ◽  
Granger Causality Test ◽  
Financial Sector ◽  
Causality Test ◽  
Financial Factors ◽  
Financial Factor ◽  
Private Credit

To understand the finance-growth nexus, this paper is intended to find a fewer number of important financial factors using Factor Analysis on some selected indicators of Bangladesh financial sector during the period 1988-2013. This paper then tries to check whether the identified financial factors cause economic growth or economic growth causes financial factors using the Granger – Causality test. Factor Analysis shows that financial indicators under the dimensions, depth and stability form Factor 1, and the indicators under the dimensions, use/access and efficiency form Factor 2. Being consistent with economic sense, Granger – Causality test shows that no financial factor significantly causes economic growth; rather economic growth causes “depth/stability” (‘private credit + capitalization’ /non-performing loan) factor of financial sector during the period. In summary, on average, financial sector of Bangladesh is being unstably (being increased non-performing loan) deepened with response to the demand of economic growth since 1988.

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