scholarly journals Foreign Portfolio Investment and Economic Growth in Malaysia

2009 ◽  
Vol 48 (2) ◽  
pp. 109-123 ◽  
Author(s):  
Jarita Duasa ◽  
Salina H. Kassim
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Economic Performance ◽  
Jel Classification ◽  
Sustainable Growth ◽  
Portfolio Investment ◽  
Impulse Response Functions ◽  
Causality Test ◽  
Foreign Portfolio Investment ◽  
The Relationship

This study examines the relationship between foreign portfolio investment (FPI) and Malaysia’s economic performance. In particular, the study analyses the relationship between FPI and real gross domestic product (GDP) using the widely adopted Granger causality test and the more recent Toda and Yamamoto’s (1995) non-causality test to establish the direction of causation between the two variables. Similar method is also applied on the relationship between volatility of FPI and real GDP. Additionally, the study uses an innovation accounting by simulating variance decompositions and impulse response functions for further inferences. Using quarterly data covering the period from 1991 to 2006, the study finds evidence that economic growth causes changes in the FPI and its volatility and not vice versa.. The findings suggest that economic performance is the major pull factor in attracting FPI into the country. Thus, it must be ensured that the Malaysian economy remains on a healthy and sustainable growth path so as to maintain investor confidence in the economy. JEL classification: G15, C32, C12 Keywords: Foreign Portfolio Investment, Economic Growth, Granger Causality, Toda-Yamamoto Non-causality, Variance Decomposition

scholarly journals Causality of Economic Growth and Openness in ASEAN-5

2019 ◽  
Vol 4 (1) ◽  
pp. 01-09
Author(s):  
Yarlina Yacoub ◽  
Nindya Lestari
Keyword(s):  
Economic Growth ◽  
International Trade ◽  
Granger Causality ◽  
Random Effect ◽  
The Philippines ◽  
Jel Classification ◽  
Global Market ◽  
Panel Regression ◽  
Causality Test ◽  
The Relationship

Objective - This study aims to determine the relationship between FDI and trade and its effect on economic growth in ASEAN-5 countries using the Engel-Granger causality method. Methodology/Technique - The study uses OLS panel regression analysis to identify the relationship between the variables in each country. The results of the Engel-Granger causality test indicate that there is a two-way relationship between economic growth and FDI, and economic growth and international trade. Findings - When tested together through panel regression, it is concluded that the best model is a random effect method (REM) in which FDI and international trade significantly influence economic growth in the same direction. However, the relationship between FDI and international trade and its effect on economic growth in Indonesia, the Philippines and Thailand was negative, whilst in Malaysia and Singapore the relationship has a directional trend. Novelty - To reinforce the FDI inflows, authorities should continue the progressive reduction of barriers, and increase the sophistication of quality exports to compete in the global market. This paper is the first of its kind to analyze the role of both FDI and exports in the ASEAN5 economies using panel analysis. Type of Paper: Empirical. Keywords: Economic Growth; FDI; Openness; Engle-Granger Causality. JEL Classification: F02, F10, F41. DOI: https://doi.org/10.35609/jber.2019.4.1(1)

scholarly journals Does Defence Spending and its Composition Affect Economic Growth in India?

2020 ◽  
Vol 14 (1) ◽  
pp. 62-85
Author(s):  
Ranjan Kumar Mohanty ◽  
Sidheswar Panda ◽  
Biswabhusan Bhuyan
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Jel Classification ◽  
Substantial Influence ◽  
Causality Test ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Defence Spending ◽  
The Relationship ◽  
Defence Expenditure

The article investigates the relationship between economic growth and defence expenditure in India from 1970–1971 to 2015–2016. By using the Autoregressive Distributed Lag and Toda-Yamamoto Granger Causality approach, the empirical results find that defence expenditure has a positive and significant impact on economic growth in India. The study also finds that capital defence expenditure has a positive and significant effect on economic growth, while revenue defence expenditure does not have any substantial influence on it. The causality test confirms a bidirectional causality between defence expenditure and economic growth, while it finds a unidirectional causality that runs from capital defence expenditure to economic growth. The study suggests that defence spending, especially capital defence spending, should be encouraged to enhance economic growth in the Indian economy. JEL Classification: H56, O40, C32

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 Freight Transportation and Economic Growth for Zones: Sustainability and Development Strategy in China

2020 ◽  
Vol 12 (24) ◽  
pp. 10450
Author(s):  
Yanli Ma ◽  
Jieyu Zhu ◽  
Gaofeng Gu ◽  
Ke Chen
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Granger Causality ◽  
Development Strategy ◽  
Freight Transportation ◽  
Middle Part ◽  
Response Analysis ◽  
Causality Test ◽  
Economic Zone ◽  
The Relationship

The causal relationship between zonal freight turnover and gross domestic product (GDP) are receiving increasing attention to coordinate the balanced development of freight transportation and zonal economic level effectively. However, studies on the causality direction between freight transportation and economic have so far been in debate. To understand the relationship of causality direction between transportation and economic development for different zones which can provide decision support for public policies, econometrics is used to analyze the relationship between them. This paper investigates the relationship between GDP and freight turnover for economic zones of stationary series and non-stationary sequences using the vector autoregressive (VAR) and the vector error correction models (VECM). The impulse response analysis and variance decomposition are conducted to verify the effectiveness of the models. The Granger causality test is exploited to discover the relationship between transportation and economic development in each economic zone. The data on freight transportation and GDP in China from 2003 to 2018 is used. Results show that the relationship between freight turnover and GDP in the Northeast economic zone is bidirectional. A unidirectional relationship exists between freight turnover and GDP in the Circum Bohai-Sea, the Pearl River, Middle Part, Southwest, and Northwest zone. And the Granger causality is not obvious in the Yangtze River economic zone. In addition, suggestions for the zonal development of transportation and economic systems are provided. This study can provide a basis to adopt relevant policies and measures of sustainable development between transportation and economic growth for different zones.

The Empirical Research between China's Scientific and Technological Investment and Economic Growth

2013 ◽  
Vol 444-445 ◽  
pp. 1607-1611
Author(s):  
Ying Lei
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Technological Progress ◽  
Science And Technology ◽  
Growth Index ◽  
Granger Causality Test ◽  
Sample Period ◽  
Causality Test ◽  
Financial Investment ◽  
The Relationship

In order to explore the relationship between China's scientific and technological progress and economic growth, granger test is been used on investment in science and technology and economic growth based on the sample period (1995-2010) of economic data.The experimental results show that : the scientific and technological progress and economic growth are each other's Granger causes. The paper divide the investment of science and technology into the manpower investment and financial investment in the analysis of economic growth and investment of science and technology the causality, then do Granger causality test on economic growth index GDP.

Exploring the Relationship between Industrial Economic Growth and Environmental Pollution - An Empirical Analysis Based on Cointegration and Granger Causality Test

2013 ◽  
Vol 423-426 ◽  
pp. 1377-1382
Author(s):  
Chao Wang ◽  
Jiang Liu ◽  
Li Huang ◽  
Wei Li
Keyword(s):  
Economic Growth ◽  
Environmental Pollution ◽  
Granger Causality ◽  
Granger Causality Test ◽  
Industrial Emissions ◽  
Causality Test ◽  
Pollution Emission ◽  
The Relationship ◽  
Cointegration Relationship ◽  
Industrial Economic

This paper aims at investigating the cointegration relationship between industrial economic growth and environmental pollutions from the timing dimension by using three types of environmental pollution indicators of industrial emissions and going further to test whether this relationship is bidirectional Granger causality. Firstly, the cointegration analysis’ result shows that the relationship between industrial economic growth and environmental quality may not meet the hypothesis of EKC curve. In the timing period analyzed, the relationship is linear and positive. Hence, promoting the relationship to be negative when only relying on self-regulation of the market will probably not be achieved. Secondly, based on cointegration test, this paper goes further to conduct Granger causality test of cointegration relationship. The result shows industrial economic growth causes pollution emission but it is not true vice versa. The reasons possibly include that that the technological progress in recent years may not embody on the reduction of pollution emission intensity, the absence of resources product market, the lack of tradable emission permits market and no effective incentives of green production behaviors of enterprises to react up on encouraging enterprises’ development. These generate external pressure to the transformation of industrial economic growth pattern.

Dynamics of Economic Growth, Investment and Trade Openness: Evidence from Bangladesh

2017 ◽  
Vol 6 (1) ◽  
pp. 82-104 ◽  
Author(s):  
Champa Bati Dutta ◽  
Mohammed Ziaul Haider ◽  
Debasish Kumar Das
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Granger Causality ◽  
Direct Investment ◽  
Trade Openness ◽  
Jel Classification ◽  
Domestic Investment ◽  
Causality Test ◽  
Vector Error Correction ◽  
Causality Tests

This article investigates the causal relationship among foreign direct investment, domestic investment, trade openness and economic growth in Bangladesh over the period 1976–2014. Unit root tests, cointegration methods and Granger causality tests in Vector Error Correction Model (VECM) framework are used to investigate the relationships. The results of Granger causality test based on a stable VECM support a unidirectional causality running from foreign direct investment to growth, domestic investment to trade openness, growth to trade openness and bidirectional causality between domestic investment and growth and foreign direct investment and domestic investment. The results support the investment complementarities in Bangladesh. JEL Classification: E22, F1, O40

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