The impact of institutional quality and governance on financial inclusion in Africa: A two-step system generalised method of moments approach

This study unites two streams of research by simultaneously focusing on the impact of financial globalisation on financial development and pre- and post-crisis dynamics of the investigated relationship. The empirical evidence is based on 53 African countries for the period 2004–2011 and Generalised Method of Moments. The following findings are established. First, whereas marginal effects from financial globalisation are positive on financial dynamics of activity and size, corresponding net effects (positive thresholds) are negative (within range). Second, while decreasing financial globalisation returns are apparent for financial dynamics of depth and efficiency, corresponding net effects (negative thresholds) are positive (not within range). Third, financial development dynamics are more weakly stationary and strongly convergent in the pre-crisis period. Fourth, the net effect from the: pre-crisis period is lower on money supply and banking system efficiency; post-crisis period is positive on financial system efficiency and pre-crisis period is positive on financial size. JEL Codes: F02, F21, F30, F40, O10

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FINANCIAL INCLUSION, INSTITUTIONAL QUALITY AND FINANCIAL DEVELOPMENT: EMPIRICAL EVIDENCE FROM OIC COUNTRIES

The Singapore Economic Review ◽

10.1142/s0217590820420084 ◽

2021 ◽

pp. 1-28

Author(s):

MINHAJ ALI ◽

MUHAMMAD IMRAN NAZIR ◽

SHUJAHAT HAIDER HASHMI ◽

WAJEEH ULLAH

Keyword(s):

Financial Development ◽

Method Of Moments ◽

Positive Impact ◽

Generalized Method Of Moments ◽

Institutional Quality ◽

Financial Inclusion ◽

Moderation Effect ◽

The Relationship ◽

Unique Study

This unique study examines the moderation effect of institutional quality (IQ) on the relationship between financial inclusion (FI) and financial development (FD) of 45 Organization of Islamic Cooperation (OIC) countries. For empirical analysis, panel data are used for the period 2000–2016. We use the Arellano–Bond generalized method of moments (GMM) and two-stage least-squares (2SLS) method in our estimations to draw multidimensional results. The empirical results confirm the significant positive relationship between FI, IQ and FD. Interestingly, we find that IQ moderates FI and has a significant positive impact on FD. Our findings are robust to alternative econometric specifications of FI, IQ and FD. Therefore, policymakers must sensibly understand the pivotal role of FI and IQ in establishing sustainable future development of OIC countries.

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Does Fiscal Decentralisation Matter for Poverty and Income Inequality in Pakistan?

The Pakistan Development Review ◽

10.30541/v55i4i-iipp.781-802 ◽

2016 ◽

Vol 55 (4I-II) ◽

pp. 781-802 ◽

Cited By ~ 1

Author(s):

Sehrish Shahzad ◽

Bushra Yasmin

Keyword(s):

Income Inequality ◽

Institutional Quality ◽

Jel Classification ◽

Marginal Effect ◽

Negative Consequences ◽

Time Period ◽

Potential Benefits ◽

Fiscal Decentralisation ◽

Generalised Method Of Moments ◽

The Impact

This study endeavours to investigate the impact of fiscal decentralisation on the welfare concerns of poverty, and income inequality in Pakistan for the time period 1972 to 2013. In order to capture the multi-dimensional nature of fiscal decentralisation, three indicators are used namely; revenue decentralisation, expenditure decentralisation and composite decentralisation. Further, the role of institutional quality is also incorporated in apprehending the responsiveness of welfare issues towards the process of fiscal decentralisation. The estimation technique of Generalised Method of Moments (GMM) is employed for estimating the impact of fiscal decentralisation on poverty and income inequality. The empirical findings suggest that fiscal decentralisation has discretely resulted in increasing poverty and income inequality in Pakistan, but the presence of better institutional quality along with fiscal decentralisation can promise to mitigate the negative consequences of fiscal decentralisation for poverty and income inequality in Pakistan. Although, the indirect effect of fiscal decentralisation on welfare concerns, through institutional quality exhibits a fluctuating trend over time, but its average marginal effect is lower than the direct effect of fiscal decentralisation on welfare concerns. Hence, it can be perceived that the log-run welfare issues can be tackled effectively in the presence of institutional quality with a rational level of fiscal decentralisation. Also in order to reap the potential benefits of fiscal decentralisation for poverty and income inequality that has remained a catastrophe in case of Pakistan. JEL Classification: I3, 023 H53 Keywords: Fiscal Decentralisation, Welfare

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The Effect of Trade Openness on Income Inequality with the Role of Institutional Quality

Indonesian Journal of Economics Social and Humanities ◽

10.31258/ijesh.1.2.65-76 ◽

2019 ◽

Vol 1 (2) ◽

pp. 65-76

Author(s):

Lim Thye Goh ◽

Siong Hook Law

Keyword(s):

Income Inequality ◽

Method Of Moments ◽

Trade Openness ◽

Institutional Quality ◽

Marginal Effect ◽

Corrective Effect ◽

Time Period ◽

Generalised Method Of Moments ◽

New Evidence

This study investigates the effect of trade openness on income inequality using the panel system generalised method of moments (GMM). The sample countries consist of 65 developed and developing countries and the time period covers from 1984 to 2012. This study also provides new evidence that sheds light on the role of institutional quality in influencing the effectof trade openness on income inequality. The empirical results reveal that trade openness tends to increase income inequality. In addition, the marginal effect also revealed that institutional quality has a corrective effect on the trade openness – income inequality nexus.

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Relationship Among Institutional Quality, Tax Revenue and Economic Growth at Provincial Level: Evidence from Vietnam

Asian Journal of Empirical Research ◽

10.18488/journal.1007/2016.6.9/1007.9.228.239 ◽

2016 ◽

Vol 6 (9) ◽

pp. 228-239

Author(s):

Lien, Nguyen Phuong

Keyword(s):

Economic Growth ◽

Method Of Moments ◽

Institutional Quality ◽

Tax Revenue ◽

Quality Indices ◽

Method Of Moments Estimation ◽

Generalised Method Of Moments ◽

The Relationship ◽

Estimation Models

To investigate the relationship among institutional quality, tax revenue, and economic growth in Vietnam, this work applies the Granger test for a panel data of 60 provinces in Vietnam during the period 2006 - 2014. In addition, using the two-step system generalised method of moments estimation supports this study to evaluate the degree of impact of interaction between quality of institutions and tax revenue on economic growth in more detail. The results provide a bi-direction causal linkage among the mentioned variables and discover that tax revenue has significantly positive impacts on economic growth. On the other hand, the effect on growth of economy of the ten institutional quality indices is diverse. The data also indicated convergence in all estimation models as suggested by classical theories of economic growth.

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How does institutional quality moderates the impact of tourism on economic growth? Startling evidence from high earners and tourism-dependent economies

Tourism Economics ◽

10.1177/1354816621993627 ◽

2021 ◽

pp. 135481662199362

Author(s):

Festus Fatai Adedoyin ◽

Naila Erum ◽

Festus Victor Bekun

Keyword(s):

Economic Growth ◽

Positive Impact ◽

Institutional Quality ◽

Causality Test ◽

Weak Institutions ◽

High Earning ◽

Generalised Method Of Moments ◽

Wealth Of Nations ◽

Sustainable Economic Growth ◽

The Impact

Over the years, policymakers in tourism-reliant economies have been saddled with the mandate to not only accelerate economic growth but also increase the living standards of domestic citizens. Tourism development has been highlighted in the extant literature as a route to attaining sustainable economic growth. Past studies affirm that tourism contributes significantly to both the wealth of nations and cultural diffusion. However, whether institutional quality moderates the impact of tourism on economic growth has yet to be given sufficient academic attention. The study uses data from 2002 to 2017 and the generalised method of moments methodology, while the Dumitrescu–Hurlin panel causality test is applied to check the robustness of results. The empirical results show that a 1% increase in tourist arrivals or air transport led to a 0.41% and 0.17% increase in economic growth, respectively. However, when particular governance variables are taken into consideration, this impact is reduced to −0.09% and −0.02% for both tourism proxies. This implies that the influence of governance on the tourism-led growth hypothesis through an interaction term between institutional quality and tourist arrivals was found to reverse the impact of tourism on growth from positive to negative in both high-earning and tourism-dependent countries. While infrastructure also contributes to economic growth, its impact is slightly higher in top earners than in tourism-dependent economies. The results of the study suggest that weak institutions in both country groups allow corrupt practices, which divert the positive impact that tourism should have on economic growth.

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Post-acquisition Performance Analysis of Indian Target Firms: The Role of Deal Characteristics

The Indian Economic Journal ◽

10.1177/0019466220938042 ◽

2018 ◽

Vol 66 (3-4) ◽

pp. 250-269

Author(s):

Sheeba Kapil ◽

Gaurav Barick

Keyword(s):

Method Of Moments ◽

Target Firm ◽

Acquisition Performance ◽

Financial Variables ◽

Stock Market Reaction ◽

Significant Difference ◽

Target Firms ◽

Generalised Method Of Moments ◽

The Impact

The aim of this article is to identify and determine various dimensions of deal characteristics affecting the post-acquisition performance of Indian target firms. Available researches have focussed on the stock market reaction as the indicator of target firm performance. Nonetheless, various determinants are found to affect the post-acquisition performance of target firms. Bearing that in mind, this article focusses on the significance of deal characteristics while assessing the performance of the Indian target firms post-acquisition. The article attempts to analyse the post-acquisition performance of target firms independent of the acquirer firm to get a more appropriate perception of their position. The change model, generalised method of moments (GMM) model and the regression model has been employed to assess the changes in operating performance, analyse the importance of financial variables in post-acquisition performance and study the impact of deal characteristics in the post-acquisition performance of the Indian target firms. The outcomes reveal that there has been a significant difference in the improvement of targets depending on whether it has been taken over by a domestic acquirer or inbound acquirer.

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Bioenergy Intensity and Its Determinants in European Continental Countries: Evidence Using GMM Estimation

Resources ◽

10.3390/resources8010043 ◽

2019 ◽

Vol 8 (1) ◽

pp. 43 ◽

Cited By ~ 3

Author(s):

Mohd Alsaleh ◽

A. Abdul-Rahim

Keyword(s):

Gross Domestic Product ◽

Method Of Moments ◽

Positive Impact ◽

Policy Instruments ◽

Economic Variable ◽

Related Factors ◽

Significance Level ◽

Method Of Moments Estimator ◽

Generalised Method Of Moments ◽

The Impact

This study contributes to the existing literature by examining bioenergy intensity and its related factors in European continental countries (ECC). Through its focus on European continental (EC), this study extends the existing literature, which mainly covers nationwide studies. The current paper aims to investigate the variables of bioenergy intensity in the ECC during the term 2005–2013, construct its economic variables, and evaluate the volume and significance level of the impact of each variable on bioenergy intensity. To successfully achieve this analysis, a generalised method of moments estimator (GMM) was designed for ECC. The estimated models show that available bioenergy for final consumption has a positive impact on bioenergy intensity in ECC. The largest influence on bioenergy intensity was evaluated for the annual growth of Gross Domestic Product (GDP), followed by the investment and referral that the scale and construction of this economic variable should be taken into consideration and applied as a precious bioenergy regulation and policy instruments for developing bioenergy intensity and efficiency.

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The Impact of Institutional Quality on Economic Growth: Panel Evidence

The Pakistan Development Review ◽

10.30541/v53i1pp.15-31 ◽

2014 ◽

Vol 53 (1) ◽

pp. 15-31 ◽

Cited By ~ 9

Author(s):

Saima Nawaz ◽

Nasir Iqbal ◽

Muhammad Arshad Khan

Keyword(s):

Economic Growth ◽

Theoretical Model ◽

Fixed Effects ◽

Institutional Quality ◽

Long Run ◽

Asian Economies ◽

Level Of Economic Development ◽

Generalised Method Of Moments ◽

The Impact

The aim of the present study is twofold. First, we develop a theoretical model which incorporates the role of institutions in promoting economic growth. The theoretical model predicts that rent seeking activities decrease as institutional quality improves, and hence income increases and vice versa. Second, we conduct an empirical analysis to quantify the impact of institutions on economic growth in selected Asian economies over the period 1996- 2012 by employing both static and dynamic panel system Generalised Method of Moments (GMM) technique with fixed effects. The empirical results reveal that institutions indeed are important in determining the long run economic growth in Asian economies. However, the impact of institutions on economic growth differs across Asian economies and depends on the level of economic development. The results reveal that institutions are more effective in developed Asia than developing Asia. This evidence implies that different countries require different set of institutions to promote long term economic growth. Keywords: Institutions, Economic Growth, Panel Evidence, Asia

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ISLAMIC BANKING DEVELOPMENT AND FINANCIAL INCLUSION IN OIC MEMBER COUNTRIES: THE MODERATING ROLE OF INSTITUTIONS

Journal of Islamic Monetary Economics and Finance ◽

10.21098/jimf.v7i3.1364 ◽

2021 ◽

Vol 7 (3) ◽

Author(s):

Kabiru Kamalu ◽

Wan Hakimah Binti Wan Ibrahim

Keyword(s):

Cross Section ◽

Method Of Moments ◽

Generalized Method Of Moments ◽

Institutional Quality ◽

Financial Inclusion ◽

Islamic Banking ◽

Causality Test ◽

Banking Development ◽

Moderating Role

This study argues that the effect of Islamic banking development on financial inclusion is enhanced when there exist better quality institutions. A cross section dependency test, cointegration test, causality test, and system GMM (generalized method of moments) are applied to achieve this objective. Employing panel data from 30 Organisation of Islamic Cooperation (OIC) member countries over the period 2013-2018, the analysis suggests that Islamic banking promotes financial inclusion. Furthermore, it documents evidence which suggests negative and significant coefficients of the interaction between Islamic banking development and institutional quality. This means that Islamic banking development works well in promoting financial inclusion in countries with low institutional quality.

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