scholarly journals Does Financial & Social Development are Important for Economic Growth? An International Scenario

2020 ◽  
Vol 5 (2) ◽  
Author(s):  
Abdul Rehman ◽  
Irum Saba ◽  
Rehana Kousar
Keyword(s):  
Economic Growth ◽  
Co2 Emission ◽  
Trade Openness ◽  
Health Expenditures ◽  
Gdp Per Capita ◽  
Significant Relation ◽  
Market Capitalization ◽  
Turnover Ratio ◽  
Domestic Credit ◽  
Per Capita

Financial and Social Development plays pivotal role in the economic growth of nations. Developed countries have strong financial and social infrastructure. This study focuses on the social and financial development in relation to economic growth of developed, developing and frontier economies. Gross Domestic product (GDP) per capita used as dependent variable. Domestic credit, market capitalization, turnover ratio, household consumption, foreign direct investment, capital formation, Co2 Emission and trade openness are used as independent variables. government expenditures on education and current health expenditures are use as social variables. Unemployment and inflation rate also use as control variables. Pooled OLS (ordinary least squares), fixed effects and random effects models are used to check the relationship among variables from 2001-2017.  Results show positive and significant relation between Gross Domestic product (GDP) Domestic credit, education expenditures and health expenditures in case of developing countries. Market capitalization, turnover ratio, foreign direct investment, and trade openness have a positive but insignificant relationship. Co2 Emission, inflation and unemployment rate have negative and insignificant relation with GDP per capita. In advanced countries Inflation rate trade openness and FDI have positive and significant relation with GDP per capita. Domestic credit, market capitalization, turnover ratio, household final consumption and Co2 Emission have a negative relation with GDP per capita. Education and health also have a negative and insignificant relation with GDP per capita. In Frontier economies there is a positive and insignificant relation of market capitalization, FDI, Co2 Emission and health expenditures with GDP per capita. capital formation, turnover ratio, household consumption, trade openness has negative and significant relation with per capita. Education expenditures have positive and significant relation with GDP per capita. Co2 have positive but insignificant relation. Inflation and unemployment rate have negative but insignificant relation with GDP per capita.

scholarly journals Trade Openness and Economic Growth Nexus: A Case Study of BRICS

2018 ◽  
Vol 54 (1) ◽  
pp. 1-15 ◽  
Author(s):  
L. G. Burange ◽  
Rucha R. Ranadive ◽  
Neha N. Karnik
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Causal Relationship ◽  
Trade Openness ◽  
Gdp Per Capita ◽  
Jel Codes ◽  
Per Capita ◽  
The Impact ◽  
Econometric Technique

The article analyses a causal relationship between trade openness and economic growth for the member countries of BRICS by using an econometric technique of time series analysis. Member countries of BRICS adopted a series of liberalization reforms, almost simultaneously, from the late 1980s. The article attempts to study the impact of trade openness on their growth in GDP per capita. It captures structural composition of GDP and openness of trade in four aspects, that is, merchandise exports, merchandise imports, services export and services import. In India, the study found growth-led trade in services hypothesis. The article supports the growth-led export and growth-led import hypothesis for China and export- and import-led growth for South Africa. However, no causal relationship was evident for Brazil and Russia. JEL Codes: F43, C22

EXPORT-GROWTH NEXUS WHILE USING THE BLOCK EXOGENEITY: EMPIRICAL EVIDENCE FROM PAKISTAN

2020 ◽  
Vol 11 (1) ◽  
pp. 25-46
Author(s):  
Zia Ur Rahman
Keyword(s):  
Economic Growth ◽  
Trade Openness ◽  
Time Frame ◽  
Capital Formation ◽  
Gdp Per Capita ◽  
Real Gdp ◽  
Real Gdp Per Capita ◽  
Per Capita ◽  
Import Trade ◽  
Bound Test

The core objective of the study is to analyze the association between export and eco-nomic growth under the consideration of the time frame 1967 to 2017 for Pakistan economy. The review of literature assists to find out the frequently utilize factors are the real GDP per capita, export, import, trade openness, fiscal development and capi-tal formation possible determinants of the economic growth. However, Export Led Growth (ELG) hypothesis is oftenly employed to elaborate the affiliation between ex-port and the growth. Autoregressive distributed lag (ARDL) bound test approach to cointegration accompanied with the structural break and vector auto regressive (VAR) are employed to analysis the long-term association among real GDP per capita, ex-port, import, trade openness, fiscal development and capital formation. The empirical analysis confirms the cointegration among the factors and the ELG hypothesis holds in Pakistan economy. The Block Exogeneity reveals that export and the capital for-mation have strong influence to stimulate the economic growth. While all the other factors have cumulative influence on the growth. Moreover, the impulse response exposes that if the shock of real GDP per capita, import, trade openness, fiscal devel-opment and the capital formation are given to the export, then response of export would be positive in the coming time frame.

scholarly journals Exploring the Impact of Healthcare on Economic Growth in Africa

2019 ◽  
Vol 6 (3) ◽  
pp. 45
Author(s):  
Juste Somé ◽  
Selsah Pasali ◽  
Martin Kaboine
Keyword(s):  
Economic Growth ◽  
Life Expectancy ◽  
Health Outcomes ◽  
Health Expenditures ◽  
Gdp Per Capita ◽  
Real Gdp ◽  
Cent Increase ◽  
Real Gdp Per Capita ◽  
Per Capita ◽  
The Impact

This paper empirically investigates the relationship between health expenditures, health outcomes and economic growth in Africa using data from 48 African countries over the period 2000-2015 in a panel data regression framework. In line with wider literature on economic growth as well as health economics, the paper first finds that maternal, infant and child mortality rates are all negatively and significantly associated with economic growth in Africa. In addition, life expectancy at birth is positively associated with economic growth. A 9.4-year increase in life expectancy leads to 1 per cent increase in real GDP per capita. Second, the paper finds that health expenditures have direct and indirect effects on economic growth that are positive and economically meaningful. In particular, a 10 per cent increase in health expenditures leads to an increase in annual average real GDP per capita by 0.24 per cent. Third, education emerges as a strong determinant of both economic growth and health outcomes in Africa, particularly when female education is considered. The main policy implication of this paper is that governments should aim at spending more and efficiently on the overall health system to progress over health outcomes and benefit from the positive externalities leading to economic growth. In addition, it is crucial that governments partner with private sector for resource mobilization and effective service delivery.

scholarly journals FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH IN MALAYSIA FROM 1990 TO 2019: VECM APPROACH

2021 ◽  
Vol 3 (8) ◽  
pp. 37-54
Author(s):  
Norhidayati Mohamed Zakaria ◽  
Mohamad Yazis Ali Basah
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Time Series Data ◽  
Global Financial Crisis ◽  
Gdp Per Capita ◽  
Series Data ◽  
Integration Test ◽  
Domestic Credit ◽  
Per Capita ◽  
The Relationship

Economists believe that efficient financial development is significant for building sustainable economic growth in any country. The global financial crisis, economic events and country’s uniqueness has resulted in continuous research to examine the relationship of financial and economic development using numerous methods and indicators which presented various simulation that led to different views on the linkages. Most of the studies had tested the indicators individually which resulted in less dynamic findings and creates a gap in the research. Hence, this paper aims to examine the relationship between financial development and economic growth in Malaysia by observing different economic indicators concurrently. This study using Malaysia’s annual time series data from 1990 to 2019. This study employs descriptive statistics, regression estimations, unit root test, Johansen co-integration test, VAR, and VECM modeling. The FTSE Kuala Lumpur Composite Index (FBMKLCI) and domestic credit as a percentage to GDP (DC) have been used as proxies for financial development while GDP per capita and Industrial Production Index (IPI) as proxies for economic growth. The findings reveal that FBMKLCI and domestic credit produces a significant relationship towards GDP per capita in the long run and short run. Contrary results found in FBMKLCI-domestic credit-IPI nexus whereby FBMKLCI and domestic credit demonstrate negative association towards IPI. As this study uses the same variables to indicates the relationship towards unalike economic growth gauge, more dynamic work and effort shall be considered to enhance the results. Government and respective institutions shall play their role effectively to revisit or formulate policy and law of the financial system to stimulate the growth of the Malaysian economy.

scholarly journals Globalisation and economic growth in South Africa: Do we benefit from trade and financial liberalisation?

2003 ◽  
Vol 6 (2) ◽  
pp. 218-242
Author(s):  
Elsabe Loots
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Emerging Market ◽  
Trade Openness ◽  
Gdp Per Capita ◽  
Emerging Market Economies ◽  
Market Economies ◽  
Cent Increase ◽  
Financial Liberalisation ◽  
Per Capita

This article investigates whether the process of globalisation, through trade and financial liberalisation, benefits economic growth in emerging market economies in general and in South Africa in particular. The analysis of trade openness and liberalisation in emerging market economies reveals that trade volume has a relative small impact on GDP per capita, while trade liberalisation led to an approximate 50 per cent increase on GDP per capita. The analysis of the financial dimension showed that capital account openness is associated with a 34 per cent increase in real GDP per capita growth over the period, while financial liberalisation seems to have a dramatic impact of approximately 136 per cent. In South Africa approximately 98 per cent of the current growth performance in the country can be explained by the forces of globalisation.

scholarly journals Relationship Between Trade Openness, Capital Formation and Economic Growth: A Panel Data Analysis for African Countries

2017 ◽  
Author(s):  
Ahmet Ay ◽  
Fahri Kurşunel ◽  
Mahamane Moutari Abdou Baoua
Keyword(s):  
Economic Growth ◽  
Panel Data Analysis ◽  
Trade Openness ◽  
Capital Formation ◽  
Gdp Per Capita ◽  
Equatorial Guinea ◽  
African Countries ◽  
Long Run ◽  
Integration Test ◽  
Per Capita

The more a country is open to trade, the more it attracts investors and the faster its economy develops. However, some study showed that sometime it can be the opposite of all this. In this context, the main purpose of this study is to investigate the relationship between trade openness, capital formation and economic growth in African countries. To do so, we collected data of GDP per capita, trade (% of GDP), Gross national expenditure and capital formation variables. The method applied is panel cointegration and causality by using time series of 38 African countries for the period of 1990-2014. According to the results there is long run relationship between all the variables and the cross sectional co-integration test result indicates that there is more cointegration in Comoros, Equatorial Guinea, Niger and Guinea-Bissau. With highest GDP per capita, Equatorial Guinea has more long-run relationship between trade openness, capital formation and economic growth. However, one of the poorest countries in the world (Niger), has also efficient long run relationship between the variables. The panel causality test results suggest that there is unidirectional causal relationship from trade openness to economic growth. There is also bidirectional causality link between capital formation and economic growth. In the same context, causal link exists from capital formation to trade openness. The study suggests that African countries must increase the investment promotions in order to increase the capital formation and trade openness then to boost economic growth.

scholarly journals Does Trade Openness Matter for Economic Growth in the CEE Countries?

2017 ◽  
Vol 17 (1) ◽  
pp. 3-24 ◽  
Author(s):  
Bernard Njindan Iyke
Keyword(s):  
Economic Growth ◽  
Fixed Effects ◽  
Trade Openness ◽  
Gdp Per Capita ◽  
Eastern European ◽  
Closed Economies ◽  
Real Gdp ◽  
The World ◽  
Real Gdp Per Capita ◽  
Per Capita

AbstractThis paper sets out to answer the question: Is trade openness important for economic growth in the Central and Eastern European (CEE) countries? The policyoriented measures of trade openness used in earlier studies have been argued to be subjective, while the simple outcome-oriented measures only capture one aspect of trade openness, namely: countries’ share of trade. Hence, following Squalli and Wilson (2011), the paper constructs a new outcome-oriented measure of trade openness which captures a country’s share of trade, and its interaction and interconnectedness with the rest of the world. Using fixed-effects regressions for 17 CEE countries over the period 1994 - 2014, the paper finds trade openness to be important for growth within the CEE countries. In particular, the results show that increases in trade openness is associated with increases in real GDP per capita growth within these countries. The results appear significantly the same after we dropped Croatia and Estonia - two historically closed economies.

scholarly journals INTERNATIONAL TRADE AND ITS EFFECT ON ECONOMIC GROWTH IN NIGERIA (1986-2017)

2020 ◽  
Vol 4 (2) ◽  
pp. 70-85
Author(s):  
S.A YUSUFF ◽  
TAIWO ADEKANYE ◽  
O.A BABALOLA
Keyword(s):  
Economic Growth ◽  
International Trade ◽  
Time Series Data ◽  
Trade Openness ◽  
Secondary Data ◽  
Output Growth ◽  
Least Square ◽  
Gdp Per Capita ◽  
Series Data ◽  
Per Capita

Purpose: International trade is believed to contribute significantly to the growth of an economy. In order to examine the contribution of international trade to the growth of the Nigerian economy, time series data was collected between 1986 and 2017 to investigate the trends of trade openness, investment, and expenditure on education and GDP per capita in Nigeria within the study period. It also examined the effect of trade openness on economic growth in Nigeria. Methodology: Annual secondary data was used for the study. Data on GDP per capita, trade openness, investment and expenditure on education were sourced from World Development Indicator and Central Bank of Nigeria Statistical Bulletin.  The study employed The Ordinary Least Square (OLS) methods to investigate the effects of trade openness on economic growth in Nigeria. Findings: Results showed that international trade is inversely related to GDP per capita within the study period however, the result is insignificant. Recommendation: The study recommended that government should adopt essential trade oriented policy to enhance economic growth via high exports in order to accumulate more foreign earnings to boost output growth in the country

scholarly journals Effect of financial deepening on economic growth: Does it encourage income group transition?

2021 ◽  
Vol 16 (4) ◽  
pp. 101-113
Author(s):  
Yuliia Shapoval ◽  
Oleksii Shpanel-Yukhta
Keyword(s):  
Economic Growth ◽  
Private Sector ◽  
Income Group ◽  
Gdp Per Capita ◽  
Financial Deepening ◽  
Credit Availability ◽  
Financial Depth ◽  
Domestic Credit ◽  
Per Capita ◽  
The Relationship

The rapid growth of financial deepening raises the problem of its effect, beneficial for economic development. This paper aims to demonstrate the relationship between economic growth (GDP per capita growth, GNI per capita) and financial depth (domestic credit to private sector and credit availability) in 142 countries, split into four income groups, over 2000–2020, using correlation analysis and data from the World Bank and the IMF. Besides, a comparative analysis of domestic credit to the private sector, economic freedom, Gini index, total government expenditure and national savings of countries that increased their income group status over 2011–2020 is presented. Financial deepening (increased credit availability and expansion of domestic credit to the private sector) encourages economic growth (via GNI per capita and GDP per capita growth). Although the presence of a nonlinear relationship between economic growth (GDP per capita growth) and financial depth (domestic credit to private sector and credit availability) over 1991–2020 is insufficient, there is a linear relationship between GNI per capita and credit availability, between credit availability and domestic credit to the private sector for the same sample of countries over 2000–2020. Meanwhile, there is a tendency towards a decrease in the correlation between GNI per capita and GDP per capita growth. Given the revealed linear correlation between domestic credit to the private sector and GNI per capita, financial deepening positively impacts income growth, and this dependence strengthens with increasing income levels. Target values of domestic credit to the private sector are proposed for the income group transition. AcknowledgmentThe paper was funded as a part of the “Relationship between financial depth and economic growth in Ukraine” research project (No. 0121U110766), conducted at the State Institution “Institute for Economics and Forecasting of the NAS of Ukraine”.

scholarly journals Examining GDP Growth and Its Volatility: An Episodic Approach

Entropy ◽  
2021 ◽  
Vol 23 (7) ◽  
pp. 890
Author(s):  
Jakub Bartak ◽  
Łukasz Jabłoński ◽  
Agnieszka Jastrzębska
Keyword(s):  
Economic Growth ◽  
Genetic Algorithm ◽  
Time Series ◽  
Human Capital ◽  
Growth Rates ◽  
Structural Breaks ◽  
Negative Relationship ◽  
Gdp Per Capita ◽  
Gdp Growth ◽  
Per Capita

In this paper, we study economic growth and its volatility from an episodic perspective. We first demonstrate the ability of the genetic algorithm to detect shifts in the volatility and levels of a given time series. Having shown that it works well, we then use it to detect structural breaks that segment the GDP per capita time series into episodes characterized by different means and volatility of growth rates. We further investigate whether a volatile economy is likely to grow more slowly and analyze the determinants of high/low growth with high/low volatility patterns. The main results indicate a negative relationship between volatility and growth. Moreover, the results suggest that international trade simultaneously promotes growth and increases volatility, human capital promotes growth and stability, and financial development reduces volatility and negatively correlates with growth.

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