Modelling the Nexus Between Foreign Aid and Economic Growth: A Case of Afghanistan and Egypt

2021 ◽  
Vol 39 (2) ◽  
Author(s):  
Muhammed Ashiq Villanthenkodath ◽  
Ubaid Mushtaq
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Time Series Data ◽  
Trade Openness ◽  
Political Stability ◽  
Series Data ◽  
Long Run ◽  
Short Run ◽  
Annual Time Series ◽  
And Control

This paper tries to explore the existence of a long-run relationship between foreign aid and economic growth by using the data from the two highest foreign aid recipient countries. Using the annual time series data from 1965 to 2017 this study uses several econometric models such as Johansen and Juselius cointegration, Granger causality and vector auto regression to establish the long and short-run relationships among foreign aid inflows and economic growth while also considering financial development and trade openness from both the countries. The empirical results suggest that no long-run relationship exists among foreign aid inflows and economic growth for both the countries. However, unidirectional causality running from foreign aid to economic growth is indicative in both countries. Therefore, the findings in this paper support the adequate need for foreign aid for effective economic growth amid an upright policy environment, related issues of conditionality and political stability. Our results are robust to independent, and control variables and estimation techniques are also on par with robustness.

Modelling the Nexus Between Foreign Aid and Economic Growth: A Case of Afghanistan and Egypt

2021 ◽  
Vol 39 (1) ◽  
Author(s):  
Muhammed Ashiq Villanthenkodath ◽  
Ubaid Mushtaq
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Time Series Data ◽  
Trade Openness ◽  
Political Stability ◽  
Series Data ◽  
Long Run ◽  
Short Run ◽  
Annual Time Series ◽  
And Control

This paper tries to explore the existence of a long-run relationship between foreign aid and economic growth by using the data from the two highest foreign aid recipient countries. Using the annual time series data from 1965 to 2017 this study uses several econometric models such as Johansen and Juselius cointegration, Granger causality and vector auto regression to establish the long and short-run relationships among foreign aid inflows and economic growth while also considering financial development and trade openness from both the countries. The empirical results suggest that no long-run relationship exists among foreign aid inflows and economic growth for both the countries. However, unidirectional causality running from foreign aid to economic growth is indicative in both countries. Therefore, the findings in this paper support the adequate need for foreign aid for effective economic growth amid an upright policy environment, related issues of conditionality and political stability. Our results are robust to independent, and control variables and estimation techniques are also on par with robustness.

scholarly journals FOREIGN INVESTMENT INFLOWS AND THE STRUGGLE FOR A RENEWED ECONOMIC GROWTH IN NIGERIA: AN ECONOMETRIC STUDY

2019 ◽  
Vol 7 (8) ◽  
pp. 88-103
Author(s):  
Aderopo Raphael Adediyan ◽  
Emmanuel Ekomoezor
Keyword(s):  
Economic Growth ◽  
Foreign Investment ◽  
Time Series Data ◽  
Positive Impact ◽  
Labour Force ◽  
Trade Openness ◽  
Series Data ◽  
Long Run ◽  
Short Run ◽  
Annual Time Series

This study attempts to find answer to the question of whether Nigeria should intensify effort to draw home more foreign investment; would more of foreign investment inflows accelerate Nigeria economic performance? Methodologically, annual time series data from 1986 to 2018 was analyzed using ARDL approach. The key findings are that, although FDI has long-run positive impact on economic growth, FPI has no operational effect on the growth; this is true of FPI both in the long-run and short-run. Furthermore, labour force and trade openness were found to have long-run and short-run positive impact on growth. Hence, government must tactically open up economy to trans-border trade, increase labour supply and intensify effort to attract more FDI.

scholarly journals Political Stability and its Impact on Economic Growth of Pakistan (1988-2018): A Time Series Analysis

2020 ◽  
Vol 6 (1) ◽  
pp. 273-282
Author(s):  
Majid Hussain Phul ◽  
Muhammad Saleem Rahpoto ◽  
Ghulam Muhammad Mangnejo
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Time Series Data ◽  
Political Stability ◽  
Series Data ◽  
Explanatory Variables ◽  
Long Run ◽  
Short Run ◽  
The Impact ◽  
Positive Effect

This research paper empirically investigates the outcome of Political stability on economic growth (EG) of Pakistan for the period of 1988 to 2018. Political stability (PS), gross fixed capital formation (GFCF), total labor force (TLF) and Inflation (INF) are important explanatory variables. Whereas for model selection GDPr is used as the dependent variable. To check the stationary of time series data Augmented Dickey Fuller (ADF) unit root (UR) test has been used,  and whereas to find out the long run relationship among variables, OLS method has been used. The analysis the impact of PS on EG (EG) in the short run, VAR model has been used. The outcomes show that all the variables (PS, GFCF, TLF and INF) have a significantly positive effect on the EG of Pakistan in the long run period. But the effect of PS on GDP is smaller. Further, in this research we are trying to see the short run relationship between GDP and other explanatory variables. The outcomes show that PS does not have such effect on GDP in the short run analysis. While GFCF, TLF and INF have significantly positive effect on GDP of Pakistan in the short run period.

A Sectoral Analysis of the Role of Stock Market Development on Economic Growth: Empirical Evidence from Indian Economy

2017 ◽  
Vol 18 (4) ◽  
pp. 911-923 ◽  
Author(s):  
Madhu Sehrawat ◽  
A.K. Giri
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Stock Prices ◽  
Stock Price ◽  
Time Series Data ◽  
Trade Openness ◽  
Series Data ◽  
Causality Test ◽  
Long Run ◽  
Short Run

The present study examines the relationship between Indian stock market and economic growth from a sectoral perspective using quarterly time-series data from 2003:Q4 to 2014:Q4. The results of the autoregressive distributed lag (ARDL) approach bounds test confirm the existence of a cointegrating relationship between sector-specific gross domestic product (GDP) and sector-specific stock indices. The empirical results reveal that sector-specific economic growth are significantly influenced by changes in the respective sector-specific stock price indices in the long run as well as in the short run. Apart from that, the control variables, such as trade openness and inflation, act as the instrument variables in explaining the variations in the sector-specific GDP of the economy. The results of Granger causality test demonstrate unidirectional long-run as well as short-run causality running from sector specific stock prices to respective sector GDP. The findings suggest that economic growth of the country is sensitive to respective sub-sector stock market investments. The findings highlight the reasons for cyclical and counter-cyclical business phase for the overall economy.

scholarly journals Tourism And Economic Growth In Kenya: An Empirical Investigation

2012 ◽  
Vol 11 (5) ◽  
pp. 517 ◽  
Author(s):  
Obadiah N. Kibara ◽  
Nicholas M. Odhiambo ◽  
Josephine M. Njuguna
Keyword(s):  
Economic Growth ◽  
Time Series Data ◽  
Tourism Development ◽  
Series Data ◽  
Bounds Testing ◽  
Critical Question ◽  
Dynamic Relationship ◽  
Long Run ◽  
Short Run ◽  
Annual Time Series

In this study, we examine the dynamic relationship between tourism sector development and economic growth using annual time-series data from Kenya. The study attempts to answer one critical question - Is tourism development in Kenya pro-growth? The study uses an ARDL-bounds testing approach to examine these linkages and also incorporates trade as an intermittent variable between tourism development and economic growth in a multivariate setting. The results of our study show that there is a uni-directional causality from tourism development to economic growth. The results are found to hold irrespective of whether the causality is estimated in the short run and long run. Other results show that international tourism Granger-causes trade, while trade Granger-causes economic growth in Kenya in both the short and the long run.

scholarly journals Impact of Exports and Imports on Economic Growth in Rwanda: 1961-2018

2020 ◽  
Author(s):  
Charles Ruranga ◽  
Daniel S. Ruturwa ◽  
Valens Rwema
Keyword(s):  
Economic Growth ◽  
Time Series Data ◽  
Series Data ◽  
Causality Test ◽  
Development Indicators ◽  
Long Run ◽  
Equilibrium Relationship ◽  
Short Run ◽  
Annual Time Series ◽  
The Impact

Abstract The aim of this paper is to investigate the impact of trade on economic growth in Rwanda. This paper uses exports and imports for trade and gross domestic product for economic growth. Research questions were formulated as (1) Are exports, imports and economic growth cointegrated? (2) Is there a long or short run relationship between those Variables? (3) Are there any causal relationships between factors (4) what the direction of the causality is it? Annual time series data from World Development Indicators for the period from 1961 to 2018 have been used. The methods of linear regression for estimation of Vector Auto regressions models have been used. Our findings established that VAR was appropriate model, and GDP, Exports were stationary at first differences while Imports was stationary at second difference but not at levels. Hence the two series were integrated of order one and the third one was integrated of order two. Tests of cointegration indicates that the three variables were not cointegrated, implying there was no long run equilibrium relationship between the three series. The causality test indicated that exports and imports influenced GDP. On the other hand, we found that there was a strong evidence of unidirectional causality from exports to economic growth. However, there was bidirectional causality between GDP and imports. These results provide evidence that exports and imports, thus, were seen as the source of economic growth in Rwanda.

scholarly journals DOES TRADE OPENNESS PROMOTE ECONOMIC GROWTH? THE CASE OF SUDAN

2021 ◽  
Vol 2 (Volume 2) ◽  
pp. 123-132
Keyword(s):  
Economic Growth ◽  
Time Series Data ◽  
Trade Openness ◽  
Unit Root Test ◽  
Industrial Sector ◽  
Series Data ◽  
Kuznets Curve ◽  
Long Run ◽  
Short Run ◽  
The Impact

This study investigates the impact of trade openness on economic growth in Sudan. The study utilizes annual time series data from 1972 to 2019. The study adopts the unit root test. The Autoregressive Distributed Lag model has been used as an estimation technique. The results indicate that trade openness has a positive significant impact on the economic growth in short run. However, the impact is negative in the long run. When the long-run and short-run elasticity were compared the trade-led growth hypothesis was not found. It can be argued that the country is specialized in production of low-quality products and exporting primary products therefore the economic growth is negatively affected by trade openness. Moreover, the Environmental Kuznets Curve hypothesis results provide evidence against the existence of the hypothesis indicating that the country is still below the desired level of income. The study suggests that a country should promote the industrial sector which will help to export manufactured products and therefore will increase the productivity.

scholarly journals Do banking sector reforms cause economic growth?: Empirical evidence from Africa’s largest economy

2015 ◽  
Vol 13 (1) ◽  
pp. 553-564
Author(s):  
Andy Titus Okwu ◽  
Olusola Babatunde Falaiye ◽  
Rowland Tochukwu Obiakor ◽  
Ajibola Joseph Olusegun
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Banking Sector ◽  
Time Series Data ◽  
Series Data ◽  
Real Sector ◽  
Reform Strategies ◽  
Long Run ◽  
Short Run ◽  
And Control

This paper employed time series data on relevant empirical diagnostics to examine banking sector growth-led nexus within the context of Africa’s largest economy, Nigeria. Diagnostics established stationarity of banking sector indicators and control variables at first difference. Findings showed no causal relationships between banking sector reforms and economic growth in the short-run and that, though liberalisation in particular did not Granger-cause growth of the economy during the study period, banking sector reforms caused growth of the real sector of the Nigerian economy. Hence, the caveat was that long-run growth effects of banking sector reforms on real sectors of economies are functions of policy targets of such banking or financial sectors reform strategies. Consequently, articulation of banking and financial sectors reforms within long-run rather than short-run perspectives and complementarity of liberalisation were recommended.

scholarly journals An Empirical Analysis of Impact of Foreign Aid on Economic Growth: The Case of Pakistan

2011 ◽  
Vol 3 (5) ◽  
pp. 235-241
Author(s):  
Muhammad Akram ◽  
Mahpara .
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Time Series Data ◽  
Negative Relationship ◽  
Diagnostic Methods ◽  
Series Data ◽  
Government Organizations ◽  
Long Run ◽  
Short Run ◽  
The Impact

The objective of this study is to analyze the effects of foreign aid on economic growth of Pakistan. The time series data for the period 1980-2008 is used by applying OLS regression model and two diagnostic methods namely Breusch-Pagon and Durbin-Watson tests. Results depict that foreign aid is insignificantly related to the economic growth to Pakistan for short-run and long-run. By excluding the foreign direct investment, results are significant but still a negative relationship exists. This study will help to government organizations by recognizing about the impact of foreign aid on economic growth.

scholarly journals FINANCIAL CRISES AND ECONOMIC GROWTH OF NIGERIA

2021 ◽  
Vol 8 (1) ◽  
pp. 13-33
Author(s):  
Ogbebor Peter ◽  
◽  
Awonuga Adesola ◽  
Ezenwa Anthony ◽  
Oamen Gregory ◽  
...  
Keyword(s):  
Economic Growth ◽  
Financial Crises ◽  
Time Series Data ◽  
Positive Impact ◽  
Trade Openness ◽  
Series Data ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
The Government

The effects of financial crises on economic growth of countries are destabilizing and research interests in this area in the case of Nigeria has not be sufficiently exhibited, hence, this study. The study examined the effect of financial crises on economic growth in Nigeria using time series data that covered a period from 1986 to 2019. For data analysis, the major empirical tools utilized are Autoregressive Distributed Lag (ARDL) Co-integration and ECM techniques, following the result of the unit root tests that revealed mixture of I(0) and I(1). The ARDL Co-integration result revealed that long run relationship exists among the selected variables of interest in this study. Furthermore, ECM technique revealed that Financial Crises have negative and significant effect on Economic growth in Nigeria both in the long run and short run. Also, the effect of current value of Inflation was found to be negative and significant in the long run and that of Trade openness was positive and statistically significant in the short run. Also, the study found that there are long run and short run positive and significant impacts of Liberalization on Economic growth. Finally, the findings revealed that the current year values of Money Supply have negative and significant impact on current Economic growth; however, its past value has positive impact. The study concluded that a long-run relationship existed between financial crises and economic growth; specifically, such crises have negative and significant effects on economic growth of Nigeria. The government in general should tinker with the current policy prescription regarding the establishment of financial institutions especially those that cannot qualify for the status of domestically systematically important to avert recurring crises in the financial sector that have impacted the macro-economy negatively.

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