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.

Research on the Relationship between Economic Growth, Environmental Governance Investment and Carbon Emission--Based on the Time Series Data from 2000 to 2019

2020 ◽  
pp. 713-727
Author(s):  
Xiaohui Wang, Xin Zhang
Keyword(s):  
Economic Growth ◽  
Carbon Emissions ◽  
Carbon Dioxide Emissions ◽  
Carbon Emission ◽  
Environmental Governance ◽  
Time Series Data ◽  
Series Data ◽  
Per Capita ◽  
The Relationship

The study on the relationship between investment in environmental governance, carbon emission and economic growth is helpful for the relevant government departments to coordinate the influence among them when formulating the policies of reducing emission and conserving energy, so as to take the comparative advantages of various factors and promote the benign interaction between economic development and environmental governance. In this paper, the data of Per capita GDP, per capita investment in environmental governance and per capita CARBON dioxide emissions in China from 2000 to 2019 are selected as the research basis, and variables are studied by means of Granger causality and impulse response function. As shown in the results, there is a single Granger relationship between investment in environmental governance and carbon emissions, that is, the increase of investment in environmental governance leads to the reduction of carbon emissions. The influence of economic growth on environmental governance investment is small, but in the long term, it can restrain the growth of carbon emissions. Investment in environmental governance can promote economic growth and stimulate a reduction in the emissions in the short term; Economic growth was hindered by the emissions in the long term and fail to stimulate increased investment in environmental governance. Based on these findings, this paper proposes policy Suggestions for optimizing the structure of environmental governance investment, improving the carbon emission monitoring and response mechanism, and strengthening the technological level of energy conservation and emission reduction.

scholarly journals THE NEXUS BETWEEN TAX REFORMATION, FINANCIAL DEVELOPMENT AND ECONOMIC RECOVERY: THE CASE OF MALAYSIA

2018 ◽  
Vol 24 (3) ◽  
pp. 1258-1279 ◽  
Author(s):  
Roshaiza TAHA ◽  
Jūratė ŠLIOGERIENĖ ◽  
Nanthakumar LOGANATHAN ◽  
Izolda JOKŠIENĖ ◽  
Muhammad SHAHBAZ ◽  
...  
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Global Economy ◽  
Time Series Data ◽  
Series Data ◽  
Tax Revenue ◽  
Causality Analysis ◽  
Annual Time Series ◽  
New Policies ◽  
The Relationship

The main purpose of this paper is to establish the plausibility and the dynamic nexus between financial developments, economic growth and tax revenue in Malaysia. The analysis of these relationships is vital considering the instability of the global economy which has affected growth. In this study, we employed annual time series data covering the period of 1970–2015. Using advanced co-integration and causality analysis, we found strong evidence on the relationship between each of the examined variables. The results from this study provide evidence on the taxes-growth nexus for Malaysia. An inverted U-shaped relationship is found between financial development and tax collection, while a U-shape reflects the economic condition. The nexus between economic growth and tax revenue enhances fiscal policies in the creation of transparent and mature financial systems which will further boost the collection of government revenues in Malaysia. The results of this study may provide an avenue for researchers and policymakers to understand the nature of the relationship between the examined variables and further assist in the formulation of new policies for economic sustainability.

scholarly journals Financial Development and Economic Growth: Evidence from Nepal

2020 ◽  
Vol 32 (1) ◽  
pp. 15-36
Author(s):  
Ramesh C. Paudel ◽  
Chakra Pani Acharya
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Financial Development ◽  
Direct Investment ◽  
Banking Sector ◽  
Time Series Data ◽  
Series Data ◽  
Distributed Lag ◽  
Domestic Credit ◽  
Good Policy

This paper aims to examine the role of financial development and economic growth in Nepal employing Autoregressive distributed lag (ARDL) approach of cointegration using time series data for the period from 1965 to 2018. Nepal is a unique country with big markets in the neighbors-India and China but remains as one of the poor landlocked developing countries, even being the earlier entrant in liberalization and reform. Nepal recently went through a substantial political transition and now the stable government is seeking substantial amount of foreign direct investment. In this background, it will be better, for a good policy analysis, to know how the financial activities have played the role in highly intended economic growth. We develop a model with five proxies of financial development (broad money, domestic credit to private sector, total credit from banking sector, capital formation, and foreign direct investment); and econometrically test their contribution in economic growth. Overall, the results suggest that financial development causes to economic growth substantially, except in the case of foreign direct investment. This result warns the policy makers to be more serious making investment friendly economy to attract the expected foreign direct investment.

scholarly journals Finance and economic growth nexus: evidence from Gansu province in China

2021 ◽  
Vol 275 ◽  
pp. 01007
Author(s):  
Changchuan Zhang
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Time Series Data ◽  
Unit Root Test ◽  
Output Growth ◽  
Gansu Province ◽  
Series Data ◽  
Financial Efficiency ◽  
Causality Test ◽  
Integration Test

This study investigates the association between financial development and economic growth in the long run using the time series data from 1985 to 2018 in financially undeveloped Gansu province in China. Regarding methodology, this paper employs ADF unit root test, Johansen co-integration test, VECM and Granger causality test to analyze the long-term relationship. The outcomes signal that the variables of financial depth, financial efficiency and economic growth are co-integrated, and the level of total financial development is negatively correlated with economic growth while financial efficiency is positively associated with output growth. In addition, there is a two-way causation between each pair of variables.

scholarly journals The Kenya Case of Multivariate Causality of Carbon Dioxide Emissions

2016 ◽  
Author(s):  
Samuel Asumadu-Sarkodie ◽  
Phebe Asantewaa Owusu
Keyword(s):  
Carbon Dioxide ◽  
Financial Development ◽  
Carbon Dioxide Emissions ◽  
Food Production ◽  
Time Series Data ◽  
Cointegration Analysis ◽  
Gdp Per Capita ◽  
Series Data ◽  
Production Index ◽  
Per Capita

In this study, an attempt was made to investigate the Kenya case of multivariate causality of carbon dioxide emissions by employing a time series data spanning from 1961-2011 using the ARDL method of cointegration analysis. The long-run elasticities show that, a 1% increase in financial development increases carbon dioxide emissions by 0.28%, a 1% increase in GDP per capita increases carbon dioxide emissions by 1.32% and a 1% increase in urbanization decreases carbon dioxide emissions by 1.14%. There was a unidirectional causality running from financial development, food production index, GDP per capita, industrialization and urbanization to carbon dioxide emissions. The innovation accounting shows that 20% of future shocks in carbon dioxide emissions are due to fluctuations in financial development, 9% of future shocks in financial development are due to fluctuations urbanization and 22% of future shocks in food production index are due to fluctuations in carbon dioxide emissions.

scholarly journals Personal remittances, banking sector development and economic growth in Israel: A trivariate causality test

2015 ◽  
Vol 13 (1) ◽  
pp. 1014-1027
Author(s):  
Kunofiwa Tsaurai
Keyword(s):  
Economic Growth ◽  
Banking Sector ◽  
Gdp Per Capita ◽  
Series Data ◽  
Long Run ◽  
Banking Sector Development ◽  
Integration Test ◽  
Short Run ◽  
Causality Relationship ◽  
Per Capita

The current study investigates the causal relationship between personal remittances and economic growth using Israel time series data from 1975 to 2011. In a bid to contain the omission-of-variable bias not addressed in many past studies on this topic, this study included banking sector development as a third variable in the relationship between personal remittances and economic growth to create a tri-variate causality framework. Personal remittances as a ratio of GDP, domestic credit to private sector by banks as a ratio of GDP and GDP per capita were used as proxies for personal remittances, banking sector development and economic growth respectively for the purposes of this study. It used the Johansen co-integration test to examine the existence of the long run relationship and vector error correction model (VECM) to determine the direction of causality between personal remittances, banking sector development and economic growth both in the long and short run. The findings reveal that: (1) there is a significant long run causality relationship running from GDP per capita and banking sector development towards personal remittances, (2) there is an insignificant long run causality relationship running from personal remittances and GDP per capita towards banking sector development, (3) there is no long run causality relationship running from personal remittances and banking sector development towards GDP per capita and there is no short run causality relationship between the three variables that were under study in Israel. The author therefore recommends the authorities of Israel to speed up the implementation of banking sector development and economic growth programmes in order to increase the quantity of personal remittances inflows

scholarly journals The Relationship between Financial Development and Economic Growth: The Case of Turkey

2016 ◽  
Author(s):  
Müge Manga ◽  
Mehmet Akif Destek ◽  
Muammer Tekeoğlu ◽  
Erkut Düzakın
Keyword(s):  
Economic Growth ◽  
Private Sector ◽  
Trade Liberalization ◽  
Money Supply ◽  
Financial Development ◽  
Integration Test ◽  
Domestic Credit ◽  
The Impact ◽  
Bound Test ◽  
The Relationship

The relationship between financial development and economic growth and the direction of causality between them have been received a lot of attention recently by many scholars. It is also important to analyze this relationship and the direction of causality due to implications of policies. In this study the relationship between financial development, trade liberalization and economic growth for Turkey are examined using three different models. Model 1, 2 and 3 investigate the effect of domestic loans to the private sector and trade liberalization on GDP, the impact of the domestic credit provided by banks to the private sector and trade liberalization on GDP and the effect of M2 money supply and M2 trade liberalization on GDP, respectively. Data extracted from World Development Indicators. Autoregressive-Distributed Lag Bound Test (ARDL) is used as a co-integration test to determine the long run relationship between variables. In addition, Toda and Yamamoto (1995) is utilized to test the direction of causality between financial development and economic growth according to the three financial indicators such as domestic loans to the private sector, the domestic credit provided by banks to the private sector and M2 money supply. According to the results there is a unidirectional relationship from economic growth to domestic loans to the private sector and the domestic credit provided by banks to the private sector. Additionally, the results indicate that a bidirectional relationship exist between M2 money supply and economic growth.

scholarly journals The Impact of Renewable Energy Sources on Financial Development, and Economic Growth: The Empirical Evidence from an Emerging Economy

Energies ◽  
2021 ◽  
Vol 14 (23) ◽  
pp. 8033
Author(s):  
David Guan ◽  
Ubaldo Comite ◽  
Muhammad Safdar Sial ◽  
Asma Salman ◽  
Boyao Zhang ◽  
...  
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Financial Development ◽  
Time Series Data ◽  
Renewable Energy Sources ◽  
Series Data ◽  
Cross Sectional ◽  
Renewable Sources ◽  
The Impact ◽  
The Relationship

Developing energy from renewable sources and modernizing the energy system are critical components of China’s efforts to combat climate change. Policymakers and authorities have made significant attempts to bring them. However, one of the major impediments to China’s energy revolution is financial limitations, which are inextricably linked to the country’s economic growth. The present research paper intends to investigate the relationship between economic growth and sustainable financial development on the use of energy from renewable sources in both the short and long run in the context of China. To achieve this, the researchers have utilized the panel data consisting of 10 years from 2011 to 2020. When compared to cross-sectional and time-series data samples, the panel data model offers many benefits. For starters, the panel data includes information on the passage of time and the cross-sectional area. Another benefit of using panel-data models with a larger degree of freedom is that they provide more stable and reliable estimates across short periods across cross-sections. In the case of the short run, there is a positive relationship between economic and financial development and the use of energy from renewable sources in the context of all of China. While in the case of long-term effects, the results indicate the adverse impact of financial development on the use of energy from renewable sources in the western regions of China. These results were deduced using the causality test Granger proposed to determine the path of the causal relationship and the direction of the relationship between the variables. These results indicated that the relationship between economic and financial development in east China was unidirectional, and the nature of the underlying relationship was causal. Meanwhile, in east and west China, economic development in China as a whole has been unidirectionally increasing energy from renewable sources. Our empirical findings suggest many strategies for promoting the growth of energy from renewable sources.

scholarly journals A panel causality analysis of the relationship between financial development and economic growth in OECD countries

2021 ◽  
Vol 9 (2) ◽  
pp. 662-672
Author(s):  
Sevilay Küçüksakarya
Keyword(s):  
Economic Growth ◽  
Private Sector ◽  
Financial Development ◽  
Gdp Growth ◽  
Causality Test ◽  
Panel Causality ◽  
Per Capita Gdp ◽  
Domestic Credit ◽  
Per Capita ◽  
The Relationship

This study examines the relationship between financial development and economic growth. Thus, this study aims to find empirical shreds of evidence for the direction of the causality between financial development proxied by domestic credit to the private sector and per capita GDP growth by using the panel granger causality test of the Dumitrescu-Hurlin Test. For this purpose, we used a panel of 16 OECD countries from 2008 to 2019 to provide evidence of whether the supply leading hypothesis or demand following hypothesis or both holds. All econometric exercises are carried out for whole countries and high-income countries, and upper-middle-income country groups in the sample. Due to cross-sectional dependence among the sample countries, we determine the degree of integration of each variable by employing the second-generation panel unit root tests of CIPS. We continue our analysis with the panel causality test developed by Dumitrescu and Hurlin (2012) to determine the direction of the causality between variables. For this purpose, we performed three sets of causality analyses. In the first one, we include all countries in the panel. We then divided the countries into two sub-groups based on the income classification and the level of financial development in these countries proxied by domestic credit to the private sector. The causality test results, including all countries in the sample, indicate that the hypothesis holds the supply leading hypothesis during the sample period. This means that even though this panel contains countries with a development level, financial development still seems to be a pre-condition for economic growth for these nations. We also obtain the same results when we include high-income countries in the sample. The study results provide compelling evidence for the relationship between economic growth and financial development since the sample includes countries with different levels of financial development with different degrees of per capita GDP growth.

scholarly journals Impact of inflation on economic growth in Pakistan

2021 ◽  
Vol 34 (2) ◽  
pp. 33-41
Author(s):  
Ijaz Uddin ◽  
Keyword(s):  
Economic Growth ◽  
Time Series Data ◽  
Series Data ◽  
Gdp Growth ◽  
Policy Makers ◽  
Long Run ◽  
Integration Test ◽  
Augmented Dickey Fuller ◽  
Short Run ◽  
The Relationship

Introduction. High and sustained economic growth with low inflation is the central objective of the macroeconomic policy makers. Therefore, inflation has been one of the most researched topics in macroeconomics for the last many years because it has serious implications for GDP growth. The main aim of this empirical study to examined the relationship b/w (GDP) Gross Domestic Product Growth and inflation in Pakistan by using time series data from 1990 to 2015. Methodology. This study apply (ADF) Augmented dickey fuller test for stationary, and then, Engel Granger Co-integration test, for short run and long run association. Results. There is a strong positive and significance relationship between GDP growth and inflation in Pakistan. Which indicate that is a 1unit increase an inflation rate will caused by GDP increased by 0.27 unit.

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