An Empirical Relationship between Trade Liberalization and Poverty: Comparative analysis of Selected SAARC Countries

2021 ◽  
Vol 39 (1) ◽  
Author(s):  
Ummara Ghazanfar ◽  
Rab Nawaz Lodhi ◽  
Marium Sara Minhas Bandeali ◽  
Arslan Khalil
Keyword(s):  
Economic Growth ◽  
Sri Lanka ◽  
Trade Liberalization ◽  
Significant Relationship ◽  
Practical Implication ◽  
Empirical Relationship ◽  
Secondary Data ◽  
Long Run ◽  
Short Run ◽  
The Relationship

The purpose of this study is to examine the relationship between trade liberalization, economic growth and poverty in four SAARC countries (Bangladesh, India, Pakistan, and Sri Lanka). The quantitative research method is employed on secondary data of four SAARC countries. The data on poverty, trade liberalization and economic growth is collected from World Bank website for the period of 1980-2019. ARDL (Autoregressive Distributed Lag Approach) is used to uncover the relationship between trade liberalization, economic growth, and poverty. In the case of Bangladesh, we find a significant relationship between trade liberalization and poverty in the short run, but insignificant in long run. The results are the same when we used tariffs as a measure of trade liberalization.  In the case of India, no significant relationship exists between trade liberalization and poverty both in long run as well as in the short run.  In the case of Pakistan, no significant relationship exists between trade liberalization and poverty in the short run, but we find a significant relationship in the long run. When we used nominal tariff rate as a measure of trade liberalizations, then the significant relationship exists both in the long as well as in the short run. In the case of Sri Lanka significant relationship exist between the short run as well as in long run. This study has practical implication for policy makers in essence that only trade liberalization is not enough to reduce poverty in SAARC countries, there should be other structural transformational polices also be implement in order to get the full benefits of free trade policies. This study is unique in the sense that time series analysis on trade-poverty nexus in these four countries (Bangladesh, India, Pakistan, and Sri Lanka) is new contribution in existing literature.

An Empirical Relationship between Trade Liberalization and Poverty: Comparative analysis of Selected SAARC Countries

2021 ◽  
Vol 39 (2) ◽  
Author(s):  
Ummara Ghazanfar ◽  
Rab Nawaz Lodhi ◽  
Marium Sara Minhas Bandeali ◽  
Arslan Khalil
Keyword(s):  
Economic Growth ◽  
Sri Lanka ◽  
Trade Liberalization ◽  
Significant Relationship ◽  
Practical Implication ◽  
Empirical Relationship ◽  
Secondary Data ◽  
Long Run ◽  
Short Run ◽  
The Relationship

The purpose of this study is to examine the relationship between trade liberalization, economic growth and poverty in four SAARC countries (Bangladesh, India, Pakistan, and Sri Lanka). The quantitative research method is employed on secondary data of four SAARC countries. The data on poverty, trade liberalization and economic growth is collected from World Bank website for the period of 1980-2019. ARDL (Autoregressive Distributed Lag Approach) is used to uncover the relationship between trade liberalization, economic growth, and poverty. In the case of Bangladesh, we find a significant relationship between trade liberalization and poverty in the short run, but insignificant in long run. The results are the same when we used tariffs as a measure of trade liberalization.  In the case of India, no significant relationship exists between trade liberalization and poverty both in long run as well as in the short run.  In the case of Pakistan, no significant relationship exists between trade liberalization and poverty in the short run, but we find a significant relationship in the long run. When we used nominal tariff rate as a measure of trade liberalizations, then the significant relationship exists both in the long as well as in the short run. In the case of Sri Lanka significant relationship exist between the short run as well as in long run. This study has practical implication for policy makers in essence that only trade liberalization is not enough to reduce poverty in SAARC countries, there should be other structural transformational polices also be implement in order to get the full benefits of free trade policies. This study is unique in the sense that time series analysis on trade-poverty nexus in these four countries (Bangladesh, India, Pakistan, and Sri Lanka) is new contribution in existing literature.

Does Financial Liberalization and Trade Openness Promote Growth in South Asia?

2010 ◽  
pp. 101-132
Author(s):  
Muhammad Arshad Kahn
Keyword(s):  
Economic Growth ◽  
Sri Lanka ◽  
Trade Liberalization ◽  
Inflation Rate ◽  
Financial Liberalization ◽  
Trade Openness ◽  
Real Output ◽  
Domestic Investment ◽  
Long Run ◽  
Short Run

This chapter examines the hypotheses that trade liberalization and financial liberalization jointly enhances economic growth in the four South Asian countries including Bangladesh, India, Pakistan and Sri Lanka for the period 1970-2007 using bounds testing approach to cointegration. The results suggest that in the long-run except for Bangladesh, financial development plays no role in promoting economic growth in these countries. Furthermore, the results suggest that trade openness plays a significant role in promoting economic growth in Bangladesh and India, while exerts negative effect on Pakistan and no effect on Sri Lanka. The share of domestic investment influences real output significantly in Bangladesh, India and Pakistan. In the long- as well as short-run two-way causality between real output, trade openness, share of investment and inflation rate exists for the case of Bangladesh and India. For the case of India two-way causality between finance and growth exists in the short-run. For the case of Pakistan, there is an evidence of long-run causality between real output, finance, trade openness, share of investment and inflation rate. However, in the short-run, two-way causality between real output, trade openness and share of investment is existed and one-way causality between inflation rate, trade openness and share of investment is also observed. No evidence of short-run causality between finance and growth and vice versa for Pakistan has been seen. Finally, for Sri Lanka, an evidence of long-run causality between real output, finance, trade openness and investment share has been found. In the short-run one-way causality between finance-growth, trade-finance, trade-growth and trade-investment has been obtained. These mixed results suggest that the authorities may focuses more and more on the trade liberalization. In addition, there is a need to further deepen the banking and stock markets and provide investment friendly environment to enhance domestic investment which, in turn, promotes economic growth.

Government revenue and economic growth of Pakistan (1979 – 2017)

2020 ◽  
Vol 38 (3) ◽  
Author(s):  
Wajahat Rehman ◽  
Raza Ali Khan ◽  
Shazia Kousar
Keyword(s):  
Economic Growth ◽  
Significant Relationship ◽  
Secondary Data ◽  
Forecasting Model ◽  
Tax Revenue ◽  
Government Revenue ◽  
Distributed Lag ◽  
Revenue Sources ◽  
Long Run ◽  
Short Run

The study is conducted to identify the relationship between economic growth of Pakistan and government revenue sources – i.e. Tax Revenue, Non-tax Revenue and Additional Receipts, while measuring the change in economic development occurs due to change in government revenue sources in short-run as well as in long-run. Autoregressive Distributed Lag (ARDL) is performed on time series secondary data for the period from 1979 to 2017 and a forecasting model is developed to anticipate change in economic growth due to change in government revenue sources. Results concluded that Tax Revenue has positive significant relationship and Additional Receipts have negative significant relationship, however, Non-tax Revenue has positive insignificant relationship with economic growth of Pakistan in long-run, whereas no short-run relationship is identified among dependent and independent variables. The analysis indicated that 1% change in Tax Revenue results in 1.24% change in economic growth in the same direction, whereas 1% change in Additional Receipts results in 0.18% change in opposite direction in economic growth of Pakistan in long-run. However, evidences showed that in recent years, government has increased its dependency on the Additional Receipts as compared to Tax Revenue and Non-tax Revenue. For prosper and accelerated economic growth, it is suggested that policy makers should focus on increasing the revenue collection from Tax Revenue sources since economic growth of Pakistan is positively influenced by Tax Revenue and minimize dependency on the Additional Receipts as it hinders the economic growth. Proposed forecasting model provides promising results and projected the gross domestic product (GDP) for year 2018 with mare 0.32% and 4.44% deviation in logarithm value and rupee values, respectively.

Electricity consumption and economic growth in ASEAN

2017 ◽  
Vol 5 (2) ◽  
pp. 16
Author(s):  
Ahmad Ghazali Ismail ◽  
Arlinah Abd Rashid ◽  
Azlina Hanif
Keyword(s):  
Economic Growth ◽  
Energy Use ◽  
Electricity Consumption ◽  
Panel Estimation ◽  
Real Gdp ◽  
Long Run ◽  
Bidirectional Relationship ◽  
Short Run ◽  
Using Data ◽  
The Relationship

The relationship and causality direction between electricity consumption and economic growth is an important issue in the fields of energy economics and policies towards energy use. Extensive literatures has discussed the issue, but the array of findings provides anything but consensus on either the existence of relations or direction of causality between the variables. This study extends research in this area by studying the long-run and causal relations between economic growth, electricity consumption, labour and capital based on the neo-classical one sector aggregate production technology mode using data of electricity consumption and real GDP for ASEAN from the year 1983 to 2012. The analysis is conducted using advanced panel estimation approaches and found no causality in the short run while in the long-run, the results indicate that there are bidirectional relationship among variables. This study provides supplementary evidences of relationship between electricity consumption and economic growth in ASEAN.

ANALISIS PENGARUH EKSPOR TERHADAP PERTUMBUHAN EKONOMI INDONESIA

2017 ◽  
Vol 11 (1) ◽  
pp. 1-20
Author(s):  
Ari Mulianta Ginting
Keyword(s):  
Economic Growth ◽  
Export Performance ◽  
Descriptive Analysis ◽  
Correction Model ◽  
Administration System ◽  
Long Run ◽  
Short Run ◽  
Available Information ◽  
Increasing Trends ◽  
The Relationship

Ekspor merupakan salah satu faktor terjadinya peningkatan pertumbuhan ekonomi suatu negara, sejalan dengan hipotesis export-led growth (ELG). Penelitian ini menganalisis perkembangan ekspor dan pertumbuhan ekonomi Indonesia periode kuartal I 2001 sampai dengan kuartal IV 2015. Penelitian ini menggunakan analisis deskriptif dalam menggambarkan perkembangan pertumbuhan ekonomi serta ekspor dan analisis kuantitatif metode Error Correction Model (ECM) dalam menganalisis efek jangka panjang dan jangka pendek dari ekspor terhadap pertumbuhan ekonomi. Pada periode penelitian, data yang ada menunjukkan bahwa ekspor dan pertumbuhan ekonomi Indonesia sama-sama mengalami peningkatan. Hasil regresi ECM menunjukkan bahwa ekspor memiliki pengaruh yang positif dan signifikan secara statistik terhadap pertumbuhan ekonomi Indonesia, yang mendukung hipotesis bahwa ELG berlaku untuk Indonesia. Berdasarkan hasil penelitian ini, maka untuk mendorong pertumbuhan ekonomi Indonesia diperlukan peningkatan kinerja ekspor Indonesia. Peningkatan kinerja ekspor Indonesia dapat dilakukan dengan berbagai cara, salah satunya adalah dengan perbaikan sistem administrasi ekspor, peningkatan riset dan pengembangan produk Indonesia, peningkatan sarana dan prasarana infrastruktur, stabilitas nilai tukar dan perluasan pasar non tradisional, termasuk perbaikan struktur ekspor komoditas. Export is one of the factors behind the economic growth which is in line with the export-led growth hypotesis (ELG). This research analyzes the relationship between economic growth and export of Indonesia during first quarter of 2001 until fourth quarter of 2015. It employs descriptive analysis to describe export movement and economic growth during the study period and ECM model to analyze the long run and the short run effects of export on the economic growth. The available information indicated that, during the study period, both export and economic growth showed similar increasing trends. The result of the ECM model revealed that export had a positive and statistically significant relationship with the economic growth, supporting the hypotesis of ELG in Indonesia. Hence, to accelerate economic growth, efforts are required to boost the export performance in Indonesia. The Export performance can be increased by several way, such as improving the export administration system, increasing the research and development of Indonesian products, improving the facilities and infrastructure, exchange rate stability and the non-tradisional markets expansion, and including improvement of the export commodity structure.

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 Dynamic Relationship Between Energy and Economic Growth: Evidence from D8 Countries.

2011 ◽  
Vol 50 (4II) ◽  
pp. 437-458 ◽  
Author(s):  
Sarwat Razzaqi ◽  
Faiz Bilquees ◽  
Saadia . Sherbaz
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Energy Use ◽  
Demand And Supply ◽  
Dynamic Relationship ◽  
Long Run ◽  
Production And Consumption ◽  
Short Run ◽  
Oil Embargo ◽  
The Relationship

Energy sector has a vital influence on an economy, on both demand and supply sides. Therefore, energy production and consumption bear great importance for the developing world. The oil embargo of 1970‘s and its impact on major macroeconomic variables throughout the world attracted many economists to examine the relationship between energy and economic prosperity. The researchers have been unable to establish a definitive direction of causality between the two variables. The purpose of this study is to empirically investigate the dynamic relationship between energy use and economic growth in the D8 countries. The evidence gathered through application of VAR Granger Causality, Johansen Cointegration and VECM proves existence of short-run and long-run correlation between energy use and economic development in all countries. The results supported either uni-directional or bi-directional causality in the D8 countries except for Indonesia in short-run where non-causality was established between the two variables. JEL classifications: C22; Q43. Keywords: Energy Use, Economic Growth, D8, VAR Granger Causality, Cointegration, VECM

scholarly journals Inflation and Unemployment Trade-off: Is Phillips Curve True for African Developing Countries? Evidence from Sudan

2021 ◽  
Vol 4 (3) ◽  
Author(s):  
Omer Allagabo Omer Mustafa
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Phillips Curve ◽  
Economic Thought ◽  
Trade Off ◽  
Long Run ◽  
Short Run ◽  
Wage Inflation ◽  
The Relationship

The relationship between wage inflation and unemployment (Phillips Curve) is controversial in economic thought, and the controversy is centered around whether there is always a trade-off or not. If this relationship is negative it is called The short-run Fillips Curve. However, in the long run, this relationship may probable not exist. The matter of how inflation and unemployment influence economic growth, is debatably among macroeconomic policymakers. This study examines the behavior of the Phillips Curve in Sudan and its effect on economic growth.

The short-run and long-run dynamics among FDI, trade openness and economic growth: using a bootstrap ARDL test for co-integration in selected South Asian countries

2020 ◽  
Vol 9 (2) ◽  
pp. 279-295 ◽  
Author(s):  
Hummera Saleem ◽  
Malik Shahzad Shabbir ◽  
Muhammad Bilal khan
Keyword(s):  
Economic Growth ◽  
Sri Lanka ◽  
Causal Relationship ◽  
South Asian ◽  
Trade Openness ◽  
Asian Countries ◽  
Content Type ◽  
Long Run ◽  
Short Run ◽  
Auto Regressive

PurposeThe purpose of this study is to analyze the dynamic causal relationship between foreign direct investment (FDI), gross domestic product (GDP) and trade openness (TO) on a set of five selected South Asian countries.Design/methodology/approachThis study used newly developed bootstrap auto regressive distributed lags (ARDL) cointegration test to examine the long-run relationship among FDI, GDP and TO for selected South Asian countries for 1975–2016.FindingsThe economic growth (EG) is significantly related to TO for Bangladesh, India and Sri Lanka and the expansion of TO is crucial for growth in these countries. The results show that all countries (except Bangladesh) found the existence of long-run cointegration between FDI, GDP and TO, whereas FDI is a dependent variable. These results concluded that FDI and TO are contributing to EG in these selected countries.Originality/valueThis study is one of the first attempts to investigate the causal relationship and address the short and long dynamic among FDI, GDP and TO regarding five south Asian countries such as Bangladesh, India, Nepal, Pakistan and Sri Lanka.

The Nexus between Resource Mobilization by Mutual Funds and Economic Growth in India

2012 ◽  
Vol 13 (1) ◽  
pp. 123-136 ◽  
Author(s):  
P.K. Mishra
Keyword(s):  
Economic Growth ◽  
Mutual Funds ◽  
Developing Country ◽  
Resource Mobilization ◽  
The Real ◽  
Long Run ◽  
Policy Variable ◽  
Short Run ◽  
The Relationship

Mutual funds allow for portfolio diversification and relative risk aversion through collection of funds from the households and investment of the same in the stock and debt markets. In this process, mutual funds industry plays the most important role of a resource mobilizer. As a resource mobilizer, the industry collects the investible surpluses from the surplus-spending units and channelizes the same to the deficit-spending units of an economy. Such a function has wide relevance for a developing country like India. Arguably, mutual funds industry as a resource mobilizer appears to contribute to real economic growth of a country by reducing the transaction costs and raising the purchasing power of the investors. Thus, this article is an attempt to investigate the dynamics of the relationship between gross funds mobilized by mutual funds and the real economic growth of a developing country like India for the period 1970–71 to 2008–09. Using the time series econometric techniques of cointegration and error correction estimates, the study concludes that the growth in real gross domestic product Granger causes gross resource mobilization by mutual funds in the long run, but not in the short run. This finding supports the demand-following hypothesis and thus, the policy implication is that the real economic growth of India may be considered as the policy variable to augment the resource mobilization by mutual funds.

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