Globalization of Stock Market, Economic Growth, and Geopolitical Risk

2021 ◽  
pp. 157-168
Author(s):  
Ecenur Ugurlu Yildirim
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Foreign Investors ◽  
Dynamic Correlation ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Market Economic ◽  
Short Run ◽  
International Investors

Although the significance of the foreign investors constructing the significant magnitude of GDP increases for the emerging markets, their equity markets' attractiveness is affected by their vulnerability to geopolitical risk. The purpose of this study is to empirically investigate the effect of the stock market globalization on the correlation between economic growth and geopolitical risk in Brazil. After the dynamic correlation between economic growth and the geopolitical risk in Brazil is obtained by DCC-GARCH(1,1) methodology, the nonlinear autoregressive distributed lag (NARDL) model is employed to examine the asymmetric relationship among variables. The findings demonstrate while the changes in the globalization of the stock market decrease the connection between economic growth and geopolitical risk in the long-run, the positive changes in the participation of foreign investors make economic growth and geopolitical risk more connected the in short-run. Moreover, this impact is asymmetric. This chapter provides valuable implications for international investors and policymakers.

scholarly journals Does the Export-Led Growth Hypothesis Hold for Services Exports in Emerging Economies?

2021 ◽  
Vol 14 (27) ◽  
pp. 63-75
Author(s):  
Okpeku Lilian ONOSE ◽  
◽  
Osman Nuri ARAS ◽  
Keyword(s):  
Economic Growth ◽  
Emerging Economies ◽  
Emerging Countries ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Per Capita ◽  
Positive Effect ◽  
Growth Hypothesis

The export-led growth hypothesis states a positive relationship between the growth of exports and long-run economic growth. This study examines the validity of the export-led growth hypothesis of services exports in 5 emerging economies, including Brazil, India, Nigeria, China, and South Africa (BINCS), for the period of 1980-2019. The study employs the panel mean group autoregressive distributed lag (ARDL) procedure to identify a causal relationship between services exports and gross domestic product (GDP) per capita. The findings show that the export-led growth hypothesis in services only has a positive effect on economic growth in the short run while other variables, including foreign direct investment (FDI), gross capital formation, and labour, increase economic growth in the long run. Hence, the emerging countries should focus more on internal investment to boost growth in the long and short run.

SHORT-RUN AND LONG-RUN IMPACT OF INFLATION, UNEMPLOYMENT, AND ECONOMIC GROWTH TOWARDS POVERTY IN INDONESIA: ARDL APPROACH

2019 ◽  
Vol 2 (1) ◽  
pp. 15
Author(s):  
Ahmadi Murjani
Keyword(s):  
Economic Growth ◽  
Poverty Alleviation ◽  
Macroeconomic Variables ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Ardl Approach ◽  
Short Run ◽  
The Government ◽  
The Impact

 Poverty alleviation has become a vigorous program in the world in recent decades. In line with the efforts applied by the government in various countries to reduce poverty, some evaluations have been practised. The impacts of macroeconomic variables such as inflation, unemployment, and economic growth have been commonly employed to be assessed for their impact on the poverty. Previous studies in Indonesia yielded mix results regarding the impact of such macroeconomic variables on the poverty. Different methods and time reference issue were the suspected causes. This paper aims to overcome such problem by utilising the Autoregressive Distributed Lag (ARDL) equipped with the latest time of observations. This paper finds in the long-run, inflation, unemployment, and economic growth significantly influence the poverty. In the short-run, only inflation and economic growth are noted affecting poverty significantly. 

scholarly journals DO INFORMATION AND COMMUNICATION TECHNOLOGIES FOSTER ECONOMIC GROWTH IN INDONESIA?

2019 ◽  
Vol 22 (1) ◽  
pp. 103-122
Author(s):  
Badri Narayan Rath ◽  
Danny Hermawan
Keyword(s):  
Economic Growth ◽  
Information And Communication Technologies ◽  
Communication Technologies ◽  
Annual Data ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Information And Communication ◽  
Ict Development

This paper investigates, using annual data from 1980 to 2014, whether adoption of information and communication technologies (ICT) fosters economic growth in Indonesia. We employ an Autoregressive Distributed Lag cointegration technique on an augmented neoclassical growth model. The empirical results indicate a positive effect of ICT development on economic growth in both the long-run and short-run. The other regressors, such as total factor productivity, human capital, and capital per worker, also positively affect economic growth. From a policy perspective, the Indonesian government should promote ICT development through greater investment.

scholarly journals Effects of Agricultural, Manufacturing, and Mineral Exports on Angola’s Economic Growth

Energies ◽  
2020 ◽  
Vol 13 (6) ◽  
pp. 1494 ◽  
Author(s):  
Titus Isaiah Zayone ◽  
Shida Rastegari Henneberry ◽  
Riza Radmehr
Keyword(s):  
Economic Growth ◽  
Positive Impact ◽  
Dutch Disease ◽  
Ardl Model ◽  
Agricultural Exports ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Using Data

This study investigates the effects of Angola’s agricultural, manufacturing, and mineral exports on the country’s economic growth using data from 1980 to 2017. An Autoregressive Distributed Lag (ARDL) model is employed to estimate the effect of sectoral exports on economic growth. The estimation results show that while exports from all three sectors (manufacturing, mineral, and non-mineral) have driven Angola’s economic growth in the long-run; only non-manufacturing (agricultural and mineral) exports have led its growth in the short-run. Moreover, growth in non-export GDP was driven by mineral exports in the long-run and agricultural exports in the short-run. Considering the statistically significant and positive impact of mineral exports on the Angolan GDP as well as on its non-export GDP, this study points to a lack of evidence supporting the Dutch disease phenomenon in Angola.

Electricity Consumption–Economic Growth Nexus: Evidence from ARDL Bound Testing Approach in the Tunisian Context

2020 ◽  
pp. 097215092092543 ◽  
Author(s):  
Zouheir Mighri ◽  
Hanen Ragoubi
Keyword(s):  
Economic Growth ◽  
Electricity Consumption ◽  
Bounds Testing ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Causality Tests ◽  
Short Run ◽  
Testing Approach ◽  
Causal Nexus

This article investigates the causal nexus between electricity consumption and economic growth in Tunisia for the period 1971–2013 by using autoregressive distributed lag (ARDL) bounds testing approach of cointegration and Granger causality tests. The empirical findings indicate the existence of a long-term relationship between electricity consumption and economic growth. Besides, they support the conservation hypothesis in the long run, while they confirm the growth hypothesis in the short run.

scholarly journals A Dynamic Analysis of the Impact of Fiscal Adjustment on Economic Growth: Evidence From Pakistan

SAGE Open ◽  
2021 ◽  
Vol 11 (2) ◽  
pp. 215824402110271
Author(s):  
Ibrar Hussain ◽  
Jawad Hussain ◽  
Arshad Ali ◽  
Shabir Ahmad
Keyword(s):  
Economic Growth ◽  
Causality Test ◽  
Distributed Lag ◽  
Fiscal Adjustment ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Empirical Calibration ◽  
Short Run ◽  
S Model ◽  
The Impact

This study claims to be the first in assessing the short-run and long-run impacts of both the size and composition of fiscal adjustment on the growth in Pakistan. Empirical calibration has been made on Mankiw et al.’s model, while the Autoregressive Distributed Lag (ARDL) techniques of Pesaran et al. have been employed to carry out the estimation. To cure the problem of degenerate cases, the ARDL techniques have been augmented with the model of Sam et al. The analysis supports the hypothesis of “expansionary fiscal contraction” in the long run. The analysis reveals that the spending-based adjustment enhances the economic growth, whereas the tax-based adjustment would reduce the growth in the long run in the case of Pakistan. The Granger causality test indicates that the fiscal adjustments have been weakly exogenous, thereby allowing feedback effect from the economic growth toward the fiscal adjustment. Thus, the objective of sustained economic growth can be achieved through the spending-based consolidation measures.

scholarly journals The Nexus Among Economic Growth, Inflation and Unemployment in Bhutan

2019 ◽  
Vol 20 (1) ◽  
pp. 94-105
Author(s):  
Ugyen Tenzin
Keyword(s):  
Economic Growth ◽  
Unemployment Rate ◽  
Positive Association ◽  
Economic Output ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Employment Elasticity ◽  
The Impact

In order to understand the dynamics of unemployment in Bhutan at a macro-level, this study has explored the association among economic growth, inflation and unemployment from 1998 to 2016. The autoregressive distributed lag (ARDL) model was applied to estimate the impact of economic growth and inflation on unemployment. The results of this empirical analysis suggest that economic growth had no impact on the reduction of unemployment rate in Bhutan both in the short and in the long run. In fact, as the economic growth increased, so did the unemployment rate. However, inflation had a negative association with unemployment rate in the short run and a positive association in the long run. In other words, an increase in the employment rate led to an increase in the inflation in the short run. Likewise, if inflation is not monitored or controlled, the uncertainty of inflation can lead to lower investment and lower economic growth, thereby causing unemployment to rise in the long run. This study, therefore, recommends policymakers to take into account the employment elasticity with respect to economic output and focus on sectors, which have more absorptive capacity in engaging the young labour market entrants. JEL: B22, C22, E24, E31

scholarly journals Financial Inclusion for Sustainable Economy: Empirical Evidence from Nigeria

2020 ◽  
Vol 17 ◽  
Keyword(s):  
Economic Growth ◽  
Secondary Data ◽  
Wald Test ◽  
Financial Inclusion ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Augmented Dickey Fuller ◽  
Short Run ◽  
Adf Test

The main objective of the study is to empirically examine how economic growth is impacted upon through financial inclusion. Economic growth per capital income is the study’s explained variables while, rural deposits, private sector deposits, rural loans, private loans, and number of banks branches are proxies for the explanatory variable. Secondary data was sourced from the Central Bank of Nigeria statistical bulletin and World Bank financial indicator and span thirty-five years (1982 to 2017). From the augmented dickey fuller (ADF) test results, autoregressive distributed lag (ARDL) regression was adopted. Findings shows that individually, rural deposits, and number of banks branches are significant in the short-run while, only the former is significant in the long-run. However, jointly, and from the Wald test result, a no significant relationship is established between the variables in the long-run. The study thus recommends a nurturing approach from primary to tertiary level of financial inclusion.

scholarly journals The Role of Gold Prices and Interest Rate in Stock Index: Insights from Vietnam by Using the Autoregressive Distributed Lag Approach

2020 ◽  
Vol 12 (1) ◽  
pp. 178
Author(s):  
Le Thi Minh Huong ◽  
Phan Minh Trung
Keyword(s):  
Interest Rate ◽  
Stock Market ◽  
Interest Rates ◽  
Stock Index ◽  
Stock Market Index ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Market Index ◽  
Long Run ◽  
Short Run

This study aimed to determine the impact of domestic gold prices, interest rates in the stock market index (VNI) in Vietnam for the period of January 2009 to December 2018. This study employed the Autoregressive Distributed Lag (ARDL) to check the association of Independent variable gold prices and the interest rate on the dependent variable stock market index. The results show a close correlation together in the long-run. The Vietnam stock index is adversely affected by fluctuations in the credit market in the short-run. We observed that domestic gold prices and interest rates have one-way causal relations to the stock price index. Similarly, interest rates were causal for gold prices and still not yet had any particular direction. The adjustment in the short-run moves the long-run equilibrium, although the change is quite slow.

scholarly journals Does Monetary Policy Affect Economic Growth in Jordan? Evidence from Ordinary Least Square Models

2018 ◽  
Vol 12 (1) ◽  
pp. 27
Author(s):  
Mohamed Ibrahim Mugableh
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Positive Impact ◽  
Least Square ◽  
Vector Error Correction ◽  
Ordinary Least Square ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run

The main objective of this paper is to analyze equilibrium and dynamic causality relationships between monetary policy tools and economic growth in Jordan for the period (1990-2017). For this purpose, it considers the autoregressive distributed lag (ARDL) and vector error correction (VEC) models estimations. The results of ARDL approach show that monetary policy variables (i.e., real interest rate and money supply) have positive impact on economic growth in long-run and short-run except inflation rate. In addition, the results of VECM indicate bidirectional causal relationships between economic growth and monetary policy variables in long-run and short-run.

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