scholarly journals Factors Affecting Accumulation of Household Debts in Malaysia

2021 ◽  
Vol 2 (1) ◽  
pp. 19-41
Author(s):  
Yvonne Lean-Ee Lee ◽  
Vanisa Sukhavudh Charun ◽  
Hazmi Hamizan Mohd Zaki
Keyword(s):  
House Prices ◽  
Negative Relationship ◽  
Policy Implications ◽  
Cost Of Living ◽  
Upward Trend ◽  
Correction Model ◽  
Factors Affecting ◽  
Vector Error Correction ◽  
Vector Error ◽  
The Impact

Since 2000, the ratio of debt to income among Malaysian households has been showing an upward trend. This paper examines the factors affecting accumulation of household loansinto two main categories, housing loans and consumption loans. The purpose of this separation is to study the impact of savings on housing loans and consumption loans individually, which has not been researched in a Malaysian context prior to this. By adopting the Vector Error Correction Model (VECM), we found that cost of living, house prices and savings impacts accumulation of housing loans and consumption loans differently. There is a positive relationship between savings to housing loans. Cost of living on the other hand has a negative relationship with accumulation of consumption loans. House prices is negatively related to consumption loans. This study fills in the literature gap on the impact of household’s savings on accumulation of both housing and consumption loans. Among the policy implications proposed by this paper is to rectify and influencethe root causes of inflation.

scholarly journals Analysis of Internal and External Determinant Variables towards Profitability of Islamic Banking in Indonesia (2014-2020)

2021 ◽  
Vol 4 (1) ◽  
pp. 18-34
Author(s):  
Febri Ramadhani ◽  
Muhammad Rizkan
Keyword(s):  
Negative Relationship ◽  
Banking System ◽  
Islamic Banking ◽  
Correction Model ◽  
Factors Affecting ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Short Run ◽  
Relationship Of

Indonesia is a country that adheres to a dual banking system, namely conventional and Islamic Banking. The growth rate of Islamic banking in the last three years is higher than conventional banking. However, in total assets, Islamic banking is still far behind conventional banking. Therefore, it is necessary to study further the performance of Islamic banking reflected in its profitability. So, it becomes an alternative input in determining Islamic banking policies. This study aims to know the factors affecting the profitability (ROA) of Islamic Banking in Indonesia. The data used are the 2014-2020 monthly data in the amount of 79 data. The method used in this study is a Vector Error Correction Model (VECM) to determine the effect of long-run and short-run relationships. The results of the study showed that the long-run relationship of the NPF variable affected and was significant positive toward ROA, CAR affected and was significant negative toward ROA, while the inflation variable had a negative relationship and not significant toward ROA. The results of the short-run relationships showed that the NPF and CAR variables positively affected ROA, while the inflation variable did not significantly affect the ROA.

scholarly journals The Impact of Electric Vehicle Demand and Battery Recycling on Price Dynamics of Lithium-Ion Battery Cathode Materials: A Vector Error Correction Model (VECM) Analysis

2018 ◽  
Vol 10 (8) ◽  
pp. 2870 ◽  
Author(s):  
Jung Mo ◽  
Wooyoung Jeon
Keyword(s):  
Error Correction ◽  
Lithium Ion ◽  
Error Correction Model ◽  
Policy Implications ◽  
Raw Material ◽  
Vector Error Correction Model ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
The Impact

The recent rise in demand for electric vehicles (EV) and energy storage supporting power systems has increased the demand for lithium-ion batteries (LIB), and it is expected to be more significant in near future. However, materials for LIB, such as lithium and cobalt, may face limited supply due to oligopolistic market characteristics, and this can have a significant impact on prices of LIB materials. This paper examines the dynamics of LIB raw material prices (cobalt, lithium, nickel, and manganese prices) with EV demand using the Vector Error Correction Model (VECM) method. The result shows that the EV demand is important in short-run dynamics of cobalt and lithium prices, which indicates that the recent increase in lithium and cobalt prices has been caused by increase in EV demand. In the long-run equilibrium, lithium and nickel prices move inversely with cobalt prices. The impulse response results confirm that EV demand has an immediate positive effect on cobalt price, and the effect maintains over two years. On the other hand, the EV demand shock to nickel, lithium, and manganese prices is relatively small. This study also analyses the impact of recycling policy of LIB on material prices. Finally, the paper discusses the policy implications for stabilizing material prices of LIB.

Assessing the Impact of Terrorism on African Tourism Demand

2021 ◽  
Author(s):  
Sheereen Fauzel ◽  
Boopen Seetanah
Keyword(s):  
Panel Data Analysis ◽  
Dynamic Panel Data ◽  
Terrorist Attacks ◽  
Tourism Demand ◽  
African Countries ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
The Impact ◽  
The Relationship

Many African states are relying on or have identified tourism to accelerate their growth and the continent has become the world’s second fastest growing tourist industry. However, African states have also not been spared by increasing terrorism attacks during the past decades, probably hindering the growth of this sector to certain extent. This study examines the relationship between terrorism and tourism for a sample of selected African countries over the period 1995 to 2017. Given the dynamic nature of tourism demand and the possibility of endogenous relationships in the terrorism-tourism nexus, dynamic panel data analysis, namely a Panel vector error correction model (PVECM) is employed. The results confirm that terrorism negatively affects tourism demand in Africa and this can be explained by the reactive psychology of tourists to the various aggravated terrorist attacks in the countries. Moreover, the findings show that an increase in tourism may have resulted in an increase in terrorist attacks, hence confirming a bi directional causality between tourism and terrorism.

Openness to Import and Productivity

2013 ◽  
Vol 13 (03n04) ◽  
pp. 319-331 ◽  
Author(s):  
Maria E. de Boyrie ◽  
Mordechai Kreinin
Keyword(s):  
Labor Productivity ◽  
Estimation Method ◽  
Least Square ◽  
Policy Implications ◽  
Least Square Estimation ◽  
Correction Model ◽  
Vector Error Correction ◽  
Goods And Services ◽  
Vector Error ◽  
Labor Ratio

This article tests the effect of change in the degree of openness to import of goods and services on a country’s productivity. The idea is that by driving resources to industries in which the country has a comparative advantage, imports contribute to increased productivity in the economy. Countries from three distinct regions (OECD, Latin America and Asia), separately and together, were used to test this proposition. A feasible generalized least square estimation method is applied to determine the effect of the capital to labor ratio, openness to imports and real gross domestic product on labor productivity. A panel vector error correction model as proposed by Pesaran et al. (1999) is also performed in order to determine any causal relationship. The effect of imports on labor productivity is found to be positive and significant for the 1990–2011 period under study, strengthening the case for free trade and leading to important policy implications.

Are house prices in the Norwegian capital too high?

2015 ◽  
Vol 8 (2) ◽  
pp. 152-168 ◽  
Author(s):  
Svein Olav Krakstad ◽  
Are Oust
Keyword(s):  
House Prices ◽  
Construction Costs ◽  
Policy Makers ◽  
Correction Model ◽  
Content Type ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Practical Implications

Purpose – This paper aims to investigate whether the homes in the Norwegian capital, Oslo, are overpriced. While house prices in many countries dropped after the financial crisis, those in Norway have continued to increase. Over the past 20 years, real house prices in Oslo have increased by around 7 per cent yearly. Design/methodology/approach – The authors use a vector error correction model to estimate the equilibrium between house prices, rents, construction costs and wages to examine whether house prices in Oslo are overpriced. Findings – Long-term relationships between house prices, rents, construction costs and wages are found and used to estimate equilibrium house prices in Oslo. The overpricing in Oslo compared to estimated equilibrium prices is around 35 per cent. Practical implications – Price–rent, price–construction cost and price–income ratios are often used, by practitioners to say something about over- or underpricing in the housing market. We test and find that house prices, rents and construction costs move toward constant ratios in the long run, while wages are found to be weakly exogenous in the system. Originality/value – Our estimate of overpricing gives households, investors and policy-makers a better understanding of the risk associated with owning dwellings.

scholarly journals RESEARCH ON THE EFFECT OF CHINESE FINANCIAL ACTIVITIES ON SCIENTIFIC AND TECHNOLOGICAL INNOVATION

2020 ◽  
pp. 115-128
Author(s):  
A. Korotkevich ◽  
Xiaoyun Xu ◽  
Ziming Xu
Keyword(s):  
Technological Innovation ◽  
Vector Error Correction Model ◽  
Policy Recommendations ◽  
Financial Industry ◽  
Industrial Upgrading ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
New Development ◽  
The Impact

With the continuous development of China's economic level, accelerating industrial upgrading and transformation, building an innovative society has become a new development goal. Financial activities are closely related to economic development. Therefore, studying the impact of China's financial activities on technological innovation is of great significance. This article uses the data indicators in the field of financial activities and technological innovation in China from 2002 to 2018 to construct a vector error correction model (VEC), analyze the implicit correlation between financial activities and technological innovation, and study the promotion of technological innovation by financial activities and put forward policy recommendations to promote the development of China’s financial industry and enhance technological innovation.

scholarly journals The Impact of Bank Indonesia Regulation No. 17/3/2015 on Exchange Rate: Analysis Using Vector Error Correction Model (VECM)

2021 ◽  
Vol 12 (2) ◽  
pp. 131-141
Author(s):  
Muhamad Yudi Setiawan ◽  
Tanti Novianti ◽  
Mukhamad Najib
Keyword(s):  
Exchange Rate ◽  
Error Correction ◽  
Error Correction Model ◽  
Vector Error Correction Model ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Negative Effect ◽  
The Exchange Rate ◽  
The Impact

The weakening of the Rupiah against the US dollar has encouraged Bank Indonesia to issued Bank Indonesia Regulation (Peraturan Bank Indonesia - PBI) No. 17/3/2015. The research aimed to analyze the factors that affected the Rupiah exchange rate, the effect of PBI No. 17/3/2015 on the movement of the Rupiah exchange rate, and the behavior of exchange rate movement to the shocks on the variables that influenced it. The research applied secondary data, namely monthly data from January 2008 to April 2019 taken from reliable sources such as National Development Planning Agency (Bappenas), Bank Indonesia (BI), and Statistics Indonesia (BPS). It was explanatory research with a quantitative approach. The studied data were processed with the Vector Error Correction Model (VECM) method to identify long and short-term effects. The results of the long-term equation show that export-import has a negative effect on the exchange rate. Similarly, inflation has no significant effect on the exchange rate. Then, the money supply has a significantly negative effect on the exchange rate. However, the interest rate of Bank Indonesia positively affects the exchange rate. Next, the implementation of PBI No. 17/3/2015 has a significant and positive impact on the exchange rate. Last, the crisis condition does not affect the changes in exchange rates.

scholarly journals Analisis Pengaruh Kinerja Keuangan terhadap Profitabilitas Bank Syariah di Indonesia

2017 ◽  
Vol 8 (2) ◽  
pp. 175
Author(s):  
Heri Sudarsono
Keyword(s):  
Error Correction ◽  
Error Correction Model ◽  
Third Party ◽  
Vector Error Correction Model ◽  
Correction Model ◽  
Factors Affecting ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run

<p>This study aimed to analyze the factors affecting the amount of profitability (ROA) provided by Islamic banking in Indonesia. The data which is used is taken from the financial report of the Shari’a Bank during the 2011-2016 periods by using montly financial statement This study uses a Vector Error Correction Model (VECM) to see the long-term effect and response to shock that occur in the studied variables. The result shows that in the long run, the percentage Financing (FIN) and BOPO give a positive siqnifikant effect on the ROA, while third party funds (DPK), percentage profit and loss sharing (TBH), financial to deposit ratio (FDR) has negative and siqnificant effect on the ROA. Sertifikat Bank Indonesia Syariah (SBIS) and non performing finance (NPF) have no significant effect on the ROA. In short run, ROA give a negatif and siqnificant effect on the ROA and FDR give a positif and siqnificant effect, while DPK, FIN, SBIS, TBH, NPF and BOPO have no sinificant effect on the ROA. Therfore, shocks that occur in the ROA, FIN, FDR , NPF dan BOPO positively responded by ROA and will be stable in the long term. While the shocks that occur in the percentage of FDR, SBIS and TBH responded negatively by financing and will be stable in the long term.</p><p>Penelitian ini bertujuan untuk menganalisis faktor-faktor yang memengaruhi profitabilitas (ROA) perbankan syariah di Indonesia. Data yang digunakan data bulanan dari laporan keuangan bank syariah periode 2010-2015. Penelitian ini mengunakan Vector Error Correction Model (VECM) untuk melihat dampak jangka panjang dan respon terhadap dampak shock pada setiap variabel terhadap pembiayaan. Hasil olah data menunjukkan bahwa FIN dan BOPO berhubungan positif terhadap ROA, sedangkan DPK, TBH, FDR berhubungan negatif terhadap dan ROA SBIS dan NPF tidak berpengaruh terhadap tingkat ROA. Dalam jangka pendek, ROA berhubungan negatif, tetapi FDR terhadap ROA berhubungan positif. Sedangkan DPK, FIN, SBIS, TBH, NPF and BOPO tidak berhubungan dengan pembiayaan. Di lain pihak, respon pembiayan terhadap goncangan yang terjadi terjadi pada ROA, FIN, FDR, NPF dan BOPO direspon positif oleh ROA. Sedangkan respon ROA terhadap goncangan yang terjadi pada FDR, SBIS dan TBH adalah negatif.</p>

scholarly journals THE IMPACT OF POPULATION IMMIGRATION ON THE LABOUR MARKET OF THE UNITED KINGDOM

Ekonomika ◽  
2013 ◽  
Vol 92 (2) ◽  
pp. 64-78
Author(s):  
Gindra Kasnauskienė ◽  
Loreta Vėbraitė
Keyword(s):  
Labour Market ◽  
Linear Regression Models ◽  
Real Wages ◽  
Correction Model ◽  
Vector Error Correction ◽  
The United Kingdom ◽  
Vector Error ◽  
Short Run ◽  
The Impact ◽  
Structural Vector

Abstract. The impact of immigration on the labour market has become a very important subject of public and political debates in recent years. The aim of this study was to estimate the impact of immigration on the labour market of the United Kingdom in 1991–2010. Using a system of equations for immigration, unemployment, wage and gross domestic product, the structural vector error correction model and linear regression models were developed. The application of the structural vector error correction model has shown that immigration has a negative impact on the country’s labour market in the short run as it reduces real wages and increases unemployment. The linear regression models have indicated that immigration, ceteris paribus, negatively influencesunemployment and real wages in the long run.Key words: immigration, labour market, impact, short run, long run

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