Dynamic Impacts of Government Expenditure and Trade Openness on Economic Performances - Focusing on Korean Economy Since 1990 -

2019 ◽  
Vol 21 (2) ◽  
pp. 35-65
Author(s):  
Jong Ha Lee ◽  
Jinyoung Hwang
Keyword(s):  
Trade Openness ◽  
Government Expenditure ◽  
Korean Economy ◽  
Dynamic Impacts

scholarly journals Economic Growth of Asia Pacific Countries

2018 ◽  
Vol 2 (1) ◽  
pp. 52-60
Author(s):  
Nabaz T. Khayyat ◽  
Sherwan Kafoor
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Trade Openness ◽  
Government Expenditure ◽  
Asia Pacific ◽  
Tax Rate ◽  
Education And Health ◽  
Fixed Capital Formation ◽  
Main Driver ◽  
The Impact

This empirical study examines the determinant of economic growth among Asia Pacific countries. While many other studies focused on specific economies with particular determinants identified from previous studies, this study expands the boundaries of countries to examine different factors that are expected to affect the economic growth in Asia Pacific countries. Estimation results of this study are based on the analysis of a panel data for the period 1994–2011. The impact of total population, industry share of GNI, interest rate, gross fixed capital formation, and tax rate are statistically examined to be strongly significant for the whole sample. In the case of government expenditure and trade openness, they are examined to be significant to some degree. Finally, though human capital is expected to be the main driver of economic growth, the result from correlation analysis revealed that there is a high correlation between expenditure on education and health. To show the impact of human capital on economic growth in Asia Pacific countries, estimation with years of schooling may enhance the study instead of using expenditure on education and health.

scholarly journals An Examination of Drivers of Financial development: Evidence in West African Countries.

2018 ◽  
Vol 6 (1) ◽  
pp. 132-143
Author(s):  
Adewosi, O. Adegoke ◽  
Manu Donga ◽  
Adamu Idi ◽  
Buba Abdullahi
Keyword(s):  
Financial Development ◽  
Developing Economies ◽  
Negative Impact ◽  
Trade Openness ◽  
Government Expenditure ◽  
Political Stability ◽  
Vital Role ◽  
West African ◽  
African Countries ◽  
Panel Data Estimation

Financial development has been considered to play a vital role in promoting rapid growth and development of the developing economies. This paper examined the drivers of financial development in West African Countries. Benin Republic, Burkina Faso, Cape Verde, Ivory Coast, Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone and Togo over the period of 2000 to 2015, with the proper utilization of panel data estimation technique on the annual country data obtained from World Development Indicators (WDI) 2016 and Worldwide Governance Indicators (WGI) 2016. The results reveals that some important variables such as coefficient of rule of law, political stability, foreign direct investment, government expenditure, inflation and savings positively determined financial development. While, credit to private sector, GDP, interest rate, trade openness, and capital formation were found to negative impact on financial development. The study then recommends amongst others formulation and implementation of fiscal and monetary policies that foster financial development.

scholarly journals Do FDI and Public Investment Crowd in/out Domestic Private Investment in the SADC Region

2021 ◽  
Vol 19 (1) ◽  
pp. 3-25
Author(s):  
Eslon Ngeendepi ◽  
Andrew Phiri
Keyword(s):  
Capital Expenditure ◽  
Public Investment ◽  
Trade Openness ◽  
Government Expenditure ◽  
Private Investment ◽  
Policy Implications ◽  
Domestic Investment ◽  
Government Investment ◽  
Long Run ◽  
Short Run

Our study examines the crowding-in/out effect of foreign direct investment and government expenditure on private domestic investment for 15 members of the Southern African Development Community (SADC) for the period 1991–2019. The study employed the panel Pool Mean Group (PMG)/ARDL technique in estimating the short-run and long-run cointegration relationships between FDI, government capital expenditure and domestic private investment and adds three more variables for control purposes (interest rate, GDP growth rate and trade openness). For the full sample, FDI crowds-in domestic investment whilst government crowds-out domestic investment. However, in performing a sensitivity analysis, in which the sample was segregated into low and high income economies, both FDI and government investment crowd-in domestic investment whilst government expenditure crowds-out domestic investment in lower income SADC countries with no effect of FDI on domestic investment. Policy implications are discussed.

scholarly journals Is the Compensation Hypothesis Valid for Turkey?

2015 ◽  
Author(s):  
Murat Can Genç ◽  
Osman Murat Telatar
Keyword(s):  
Trade Openness ◽  
Government Expenditure ◽  
The Other ◽  
Cointegration Test ◽  
Government Size ◽  
Annual Data ◽  
Correction Model ◽  
Long Run ◽  
The Government ◽  
Compensation Hypothesis

Increases of trade openness in an economy raise the external risks in globalization. The societies demand on increases of the government expenditure in order to compensate for their risks. Hence the more trade openness may cause the more government size. This relation is named as compensation hypothesis in the literature has been comprehensively discussed by Rodrik (1998) but started by Cameron (1978). This paper attempts to analyze the cointegration and causality relationships between trade openness and government size in Turkey, utilizing annual data for the period 1980–2013. The existence of the long run relationship between trade openness and government size is investigated by applying Engle and Granger (1987) cointegration test. The empirical findings of cointegration test stated that the series are cointegrated. On the other hand the results of error correction model indicate that there is a unidirectional causality from trade openness to government size. The significance of this results state that the compensation hypothesis is valid for Turkey.

scholarly journals Macroeconomic Drivers of Remittances and the Implication for Economic Growth in Nigeria

2018 ◽  
Vol 5 (4) ◽  
pp. 40
Author(s):  
Johnson A. Atan ◽  
Godwin Essang Esu
Keyword(s):  
Developing Economies ◽  
Demographic Variable ◽  
Trade Openness ◽  
Government Expenditure ◽  
Output Growth ◽  
Secondary Sources ◽  
International Remittances ◽  
Remittance Flows ◽  
Estimated Error ◽  
Macroeconomic Environment

Remittances have been one of the officially recorded sources of international flows, especially, to developing economies like Nigeria, hence the need to encourage its consistent flow as well as defining ways and means of redeploying it for an improved economy. Following this line of reasoning, an attempt was made in this study, to see whether the macroeconomic environment in the domestic economy can actually play a role in stimulating international remittance inflows. To achieve this, average remittance data were tested against that of per capita income, real exchange rate, trade openness, government expenditure, inflation rate and the demographic variable (population density), and the data were all from secondary sources (WDI and CBN Bulletin, 20170/2018). Drawing of the type of gravity model suggested by Greenwood (1975) and Borjas (1987, 1989) – as modified - for analyzing international migration, and exploring the two approaches to international remittances analysis – altruistic and investment approaches, the data were modelled and estimated. Error Correction Mechanism (ECM) was employed in estimating the model. The results indicated that the macroeconomic environment of Nigeria, plays a significant role in stimulating international remittance flows. Based on the outcome of this study, it is suggested that for consistent flow of remittances into Nigeria, especially for investment purposes, a conducive macroeconomic environment should be created and maintained, as this will not only stimulate inflows, but will aid effective redeployment of same for output growth.

scholarly journals Oil depletion and quality of democracy in selected Middle-East countries

2018 ◽  
Vol 68 (1) ◽  
pp. 101-114
Author(s):  
Lotfali Agheli
Keyword(s):  
Oil And Gas ◽  
Trade Openness ◽  
Government Expenditure ◽  
Political Stability ◽  
Modern Technology ◽  
Government Size ◽  
Quality Of Democracy ◽  
Middle East Countries ◽  
Economic Ties

Oil-abundant countries, Iran, Iraq and the Gulf Cooperation Council (GCC) countries try to improve democratic institutions and to manage their chronically big governments, while experiencing decreased world oil prices. These countries pursue open door policies. Most of the foreign revenues of the region stem from oil and gas exports. Thus, how to manage the production and exports of fossil resources is of great importance. This study aims to analyse the effects of quality of democracy, government size, and the degree of openness in explaining depletion of reserves between 1985 and 2015. After testing for panel unit root and co-integration, a panel data model was estimated considering random effects. The results indicate that democratisation and political stability causes higher depletion of oil. In addition, government size affects depletion in a non-linear form, so that oil production is maximised, when government expenditure accounts for nearly 14% of GDP, on average. Furthermore, trade openness positively impacts on the oil depletion. In this case study, higher oil depletion follows strengthening democratic foundations, resizing the public sector, expanding politico-economic ties with trade partners, and applying the modern technology in the upstream oil industries.

scholarly journals Macroeconomic determinants of total factor productivity and its trend in Ethiopia

2019 ◽  
Vol 8 (6) ◽  
pp. 219-228
Author(s):  
Adisu Abebaw Degu ◽  
Dagim Tadesse Bekele
Keyword(s):  
Foreign Direct Investment ◽  
Total Factor Productivity ◽  
Direct Investment ◽  
Time Series Data ◽  
Trade Openness ◽  
Government Expenditure ◽  
Series Data ◽  
Factor Productivity ◽  
Macroeconomic Factors ◽  
Long Run

Total factor productivity (TFP) as a source of economic growth, has been recognized in economic theory for a long period of time. In this research we tried to examine the effect of some macroeconomic factors, which include trade openness, inflation, government expenditure, credit extended and foreign direct investment, and natural disaster drought on total factor productivity and its trend in Ethiopia by using Time series data spanning from 1991 to 2018.  The TFP was computed by using the growth accounting method from Cobb–Douglas production function.  ARDL was used for estimation of the short and long run econometric model.  Accordingly, the trend analysis shows the growth in TFP has been fluctuating over the study period. The result from ARDL indicated that; in long run foreign direct investment, government expenditure and drought negatively and significantly affect TFP. Credit extended is found to affect TFP positively and significantly, while inflation and trade openness are insignificant. Therefore, policies such as; subsidizing domestic firms, effective government spending and making the agriculture sector drought resistant need to be stimulated.

scholarly journals Relationship between Financial Development and Economic Growth: Empirical Evidence in Indonesia

2018 ◽  
Vol 10 (12) ◽  
pp. 37 ◽  
Author(s):  
Hafnida Hasan
Keyword(s):  
Economic Growth ◽  
Empirical Evidence ◽  
Granger Causality ◽  
Financial Development ◽  
Trade Openness ◽  
Government Expenditure ◽  
Long Run ◽  
Push Forward ◽  
Using Data ◽  
The Relationship

The aim of this paper to examine the relationship between financial development and economic growth in Indonesia by using data from 1986 until 2014. Johansen co-integration and Granger causality are utilized to analyze the data. The financial development is measured by the ratio of broad money and other control variables such as trade openness and government expenditure. The finding indicates that there is long run relationship between financial development and economic growth. Meanwhile, a unidirectional relationship had been found, it come from economic growth to financial development. Therefore, a policy to increase economic growth will push forward in proper to improve financial development in Indonesia.

The Relative Importance of Trade vs. FDI-Led Economic Growth in Thailand

2018 ◽  
pp. 105-122
Author(s):  
Sailesh Tanna ◽  
Kitja Topaiboul ◽  
Chengchun Li
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Technology Transfer ◽  
Trade Openness ◽  
Government Expenditure ◽  
Relative Strength ◽  
Domestic Investment ◽  
Conditioning Factors ◽  
Causality Tests ◽  
Capital Development

This chapter investigates the relative strength of the contributions of trade openness and FDI inflows towards economic growth of Thailand, taking account of the importance of human capital and other conditioning factors as a source of technology transfer in facilitating growth. Using Granger causality tests conducted within a vector-error-correction framework, the authors find significant evidence of the complementarities between domestic investment and trade openness, providing support for import-led growth. In contrast, direct support for FDI-led growth is relatively weak, which implies that trade openness has played a more significant role than FDI in influencing Thai economic growth. However, the results reveal a subtle role for technology transfer through the complementary effect of trade on FDI, and FDI on government expenditure, which henceforth influences human capital development with spillovers into domestic investment and growth. This leads us to argue that there is a potential role for FDI interacting with human capital in influencing the future development of the Thai economy, given its active policy of FDI promotion over the past decade.

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