scholarly journals Effects of Bank Credits on the Manufacturing Sector Output in Nigeria (1981-2018)

2020 ◽  
pp. 74-85
Author(s):  
Okere Peter.A ◽  
Okere, Cletus O ◽  
Nwaneto Ugonma
Keyword(s):  
Central Bank ◽  
Error Correction ◽  
Manufacturing Sector ◽  
Correction Term ◽  
Cointegration Test ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Auto Regressive ◽  
Bound Test

This study investigated the effects of bank credits on the manufacturing sector output in Nigeria from 1981-2018. The data for this study were sourced from Central Bank of Nigeria (CBN) statistical bulletin. The study adopted the Auto-Regressive Distributed Lag (ARDL) bound cointegration test approach and error correction. In the bound test following the ARDL, it investigated that the variables of interest put in the model are bound together in the long-run and error correction term displayed a negative and statistically significant. The negative value shows that there exists an modification speed from short-run disequilibrium towards the long-run balance. Given the error correction instrument outcome, the study revealed that bank credits exhibited a optimistic and significant relationship with the presentation of manufacturing sector in Nigeria. The study therefore recommends that policies geared towards deepening the financial sector and enhancing the healthy and soundness of banks should be vigorously pursued. Also the Central Bank of Nigeria should as a matter of urgency review downwards the lending interest rate in view of this COVID-19 pandemic threatening the whole world.

scholarly journals Modeling Long-Run and Short-Run Dynamics of Foreign Direct Investment on the Manufacturing Sector Growth in Nigeria: The ARDL Bound Testing Approach

2017 ◽  
Vol 9 (11) ◽  
pp. 128
Author(s):  
Nseabasi Imoh Etukafia ◽  
Ntiedo Bassey Ekpo ◽  
Ikenna Elias Asogwa
Keyword(s):  
Foreign Direct Investment ◽  
Multinational Corporations ◽  
Direct Investment ◽  
Manufacturing Sector ◽  
Output Growth ◽  
Explanatory Variables ◽  
Long Run ◽  
Short Run ◽  
Auto Regressive ◽  
Bound Test

This paper econometrically examines the long run and the short run dynamics of foreign direct investment (FDI) on the manufacturing sector growth in Nigeria between the period 1981 and 2015. Data used in this study were obtained from the Central Bank of Nigeria statistical bulletin published in 2016. The econometric methodology adopted was the bound test and auto regressive distributive lag (ARDL) approach to estimate cointegrating relationship as well as short run and long run dynamics of the FDI and other explanatory variables on output growth in the manufacturing sector. Results of the long run behaviour and short run dynamics (error correction model) indicate that economic liberalization is significant in influencing changes in manufacturing output growth. However, FDI has no significant effect in both the short run and the long run episode. Therefore, it is recommended that policies aimed at encouraging increased participation of private domestic investors in collaboration with multinational corporations in the manufacturing sector be crafted.

scholarly journals Determinants of Agricultural Productivity: Empirical Evidence from Pakistan’s Economy

2016 ◽  
Vol I (I) ◽  
pp. 1-12
Author(s):  
Mehmood Kakar ◽  
Adiqa Kiani ◽  
Asia Baig
Keyword(s):  
Correction Term ◽  
Agricultural Productivity ◽  
Agriculture Sector ◽  
Distributed Lag ◽  
Productivity Convergence ◽  
Long Run ◽  
Short Run ◽  
Auto Regressive ◽  
Total Productivity ◽  
Positive Effect

This article examines the determinants of the total productivity of the agriculture sector which enhances the total agricultural productivity in Pakistan and analyzes the relations among variables used for the analysis from 1990 - 2017. The application of the auto regressive distributed lag technique ARDL was used to approximate various determinants. The area under cultivation, fertilizer consumption, agriculture credit, and rainfall show a positive effect on agriculture productivity, whereas agriculture employment and pesticide consumption show a positive but statistically insignificant effect on agricultural productivity in the long run. While in the short-run all determinants have a positive and significant effect on total agriculture productivity convergence towards equilibrium is shown by error correction term is 0.829.

scholarly journals Gross National Income Growth and Foreign Direct Investment: Causation in the presence of Crisis in India

2019 ◽  
Vol 8 (9) ◽  
pp. 3099-3104
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Correction Term ◽  
National Income ◽  
Gross National Income ◽  
Policy Implications ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Auto Regressive

Gross National Income (GNI) of an economy explicates the standard of living of the population residing in a country. The growth in GNI indicates a successful development for a nation. In this paper, an interrelation between GNI growth and Foreign Direct Investment (FDI) has been discussed in the presence of Indian economic crisis by implementing the Auto Regressive Distributed Lag (ARDL) Modelling approach. The data are ranging from the time of 1991 to 2017. The relationship is judged at the background of economic liberalization of India. The result shows that there exists a long-run impact of FDI on GNI growth. The existence of cointegration further necessitates the existence of short-run causality. In the short run, GNI growth Granger causes FDI. This proves that the model is significant for discussion both for the long and short run. The error correction term signifies that there exists a ninety-seven percent chance of the model to move back to its long-run equilibrium from short-run shocks. The reliability and stability of the whole model are judged by implementing CUCUM and CUSUMQ test. Finally, in conclusion, the model chosen for the study has indicated a few policy implications required for enhancing the GNI growth of India to fight back the situation of crisis.

scholarly journals FDI, GDP, and CO2 Emission: ARDL Bound Cointegration Relationship Examination

2019 ◽  
Vol 8 (2S10) ◽  
pp. 132-138
Keyword(s):  
Foreign Direct Investment ◽  
Error Correction ◽  
Direct Investment ◽  
Co2 Emission ◽  
Correction Term ◽  
Annual Data ◽  
Causality Test ◽  
Distributed Lag ◽  
Long Run ◽  
Bound Test

The study tries to evaluate empirically, the relationship between foreign direct investment (FDI) and environmental impact with GDP in India using annual data over the period 1980-1981 to 2017-18. The genuine effect on the earth, in any case, might be bigger because CO2 emission is one of the numerous contaminations produced by financial exercises. In any case, CO2 is a worldwide air toxin, our finding has some broad ramifications for the worldwide condition too, with India has risen as the fourth most noteworthy in the worldwide positioning of CO2 emissions by the turn of this century. The Autoregressive Distributed Lag (ARDL) Bound Test after which the cointegration and causality tests were analyzed. The error correction models were also predictable to scrutinize the short-run dynamics. The Granger causality test finally deep-rooted the presence of unidirectional causality which long runs from GDP and CO2 to foreign direct investment. The error correction estimates confirmed that the Error-Correction Term is statistically significant and has a negative sign, which confirms that there isn't any problem in the long-run equilibrium relationship between the independent (GDP & CO2 ) and dependent variables (FDI). The study concluded that FDI had a long-run relationship with GDP and CO2 emission

Analyzing Road Transport (Passenger and Freight) Demand in Pakistan with Auto-Regressive Distributed Lag Co-Integration Approach

2020 ◽  
pp. 036119812097400
Author(s):  
Muhammad Zamir Khan
Keyword(s):  
Error Correction ◽  
Road Transport ◽  
Freight Transport ◽  
Passenger Transport ◽  
Fuel Price ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Auto Regressive ◽  
Long Run Equilibrium

Understanding the determinants of transport demand is crucial in making effective transport and environmental policies. In that context, the present study provides an empirical analysis of both road passenger and freight transport demand in Pakistan, using annual time series data from 1980 to 2016. The auto-regressive distributed lag bounds testing approach of co-integration is employed to estimate the short- and long-run elasticities. The empirical results show that fuel price, per-capita income, urbanization and road density are important determinants of road passenger transport demand in Pakistan. Similarly, fuel price, industrial production and international trade are the main drivers of road freight transport demand. In general, long-run elasticities are greater than short-run elasticities. Moreover, the long-run fuel price elasticities of passenger and freight transport demand are –0.044 and –0.784, respectively, implying that policy instruments (raising fuel taxes) are relatively less effective in controlling the future road transport demand and associated environment problems. The results based on short-run error correction models indicate that passenger transport demand adjusts about 75% in the first year to achieve its long-run equilibrium, while that of freight demand adjusts toward long-run equilibrium at a relatively slower rate, with about 16% of error correction taking place in the following year to reach long-run equilibrium.

scholarly journals Natural Disasters in Nigeria: An Econometric Model

2018 ◽  
Vol 2 (1) ◽  
pp. 81-101 ◽  
Author(s):  
Emmanuel Okokondem Okon
Keyword(s):  
Natural Disasters ◽  
Error Correction ◽  
Natural Disaster ◽  
Correction Term ◽  
Early Warning Systems ◽  
Urban Migration ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run

This paper models and estimates the occurrence of natural disaster in Nigeria using the residual-based test for cointegration within an autoregressive distributed lag (ARDL) framework and error correction specification between the period 1970 and 2016, the results from the estimated static model shows that DLOG(TEM), LOG(GDPC) and LOG(URB) are long-run determinants of natural disasters in Nigeria. The short run error correction model results revealed that the coefficients of DLOG(CO2), DLOG(WIS), LOG(GDPC), LOG(URB), DLOG(GDPC(-2)) and LOG(URB(-1))seem to be significant and helpful in explaining  the occurrence of natural disaster (NAD)in Nigeria. The error correction term shows that speed of adjustment of disequilibrium in natural disaster (NAD) in the previous year which is corrected in the current year is about 44.3 percent. Therefore, Nigerian government should among other recommendations embark on reducing urbanization growth by making sure that industries which forge linkages with rural occupations should be promoted to mitigate a high rural-urban migration. Establishing of very effective early warning systems for meteorological, geophysical, biological, social and industrial hazards should be ensured.

scholarly journals Determinants of Insurance Penetration in West African Countries: A Panel Auto Regressive Distributed Lag Approach

2021 ◽  
Vol 14 (8) ◽  
pp. 350
Author(s):  
Odunayo Olarewaju ◽  
Thabiso Msomi
Keyword(s):  
Banking Sector ◽  
West African ◽  
Education Sector ◽  
African Countries ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Auto Regressive ◽  
Insurance Penetration ◽  
The Government

This study analyses the long- and short-term dynamics of the determinants of insurance penetration for the period 1999Q1 to 2019Q4 in 15 West African countries. The panel auto regressive distributed lag model was used on the quarterly data gathered. A cointegrating and short-run momentous connection was discovered between insurance penetration along with the independent variables, which were education, productivity, dependency, inflation and income. The error correction term’s significance and negative sign demonstrate that all variables are heading towards long-run equilibrium at a moderate speed of 56.4%. This further affirms that education, productivity, dependency, inflation and income determine insurance penetration in West Africa in the long run. In addition, the short-run causality revealed that all the pairs of regressors could jointly cause insurance penetration. The findings of this study recommend that the economy-wide policies by the government and the regulators of insurance markets in these economies should be informed by these significant factors. The restructuring of the education sector to ensure finance-related modules cut across every faculty in the higher education sector is also recommended. Furthermore, Bancassurance is also recommended to boost the easy penetration of the insurance sector using the relationship with the banking sector as a pathway.

scholarly journals Effects of Exchange Rate and Inflation Rate on Stock Market Returns Volatility in India.

2020 ◽  
Author(s):  
Nenavath Sre ◽  
Suresh Naik
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Error Correction ◽  
Inflation Rate ◽  
Market Returns ◽  
Stock Market Returns ◽  
Positive Effects ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run

Abstract The paper investigates the effect of exchange and inflation rate on stock market returns in India. The study uses monthly, quarterly and annual inflation and exchange rate data obtained from the RBI and market returns computed from the Indian share market index from January, 2000 to June, 2020.The paper uses the autoregressive distributed lag (ARDL) co-integration technique and the error correction parametization of the ARDL model for investigating the effect on Indian Stock markets. The GARCH and its corresponding Error Correction Model (ECM) were used to explore the long- and short-run relationship between the India Stock market returns, inflation, and exchange rate. The paper shows that there exists a long term relationship but there is no short-run relationship between Indian market returns and inflation. But, there is periodicity of inflation monthly considerable long run and short-run relationship between them existed. The outcome also illustrates a significant short-run relationship between NSE market returns and exchange rate. The variables were tested for short run and it was significantly shown the positive effects on the stock market returns and making it a desirable attribute of which investors can take advantage of. This is due to the establishment of long-run effect of inflation and exchange rate on stock market returns.

LONG-RUN RELATIONSHIP BETWEEN IMPORTS AND EXPORTS: EVIDENCE FROM ASIAN COUNTRIES

2008 ◽  
Vol 53 (02) ◽  
pp. 261-278
Author(s):  
MOHAMMAD AFZAL
Keyword(s):  
Sri Lanka ◽  
Error Correction ◽  
Graphical Analysis ◽  
Budget Constraint ◽  
Cointegration Test ◽  
Asian Countries ◽  
Differential Impact ◽  
Macroeconomic Policies ◽  
Long Run ◽  
Short Run

We used Engle–Granger cointegration test to investigate and compare the long-run performance of imports and exports in Pakistan, India, Sri Lanka, Korea and Thailand. Graphical analysis demonstrates an inherent tendency of imports and exports to move together in the long run. Cointegration and error correction results support the graphical analysis that these countries do not violate on the average the international budget constraint, and trade disequilibrium is a short-run phenomenon that is sustainable in the long run. Macroeconomic policies in the sample countries have been adequately effective to affect long-run equilibrium between imports and exports. The international events had differential impact on each country of our sample.

scholarly journals Impact of Trade Openness on Industrialization in Nigeria

2020 ◽  
Vol 8 (1) ◽  
pp. 15-22
Author(s):  
Adebayo Mohammed Ojuolape ◽  
Deborah Boluwatife Adeniyi
Keyword(s):  
Exchange Rate ◽  
Trade Openness ◽  
The State ◽  
Cointegration Test ◽  
Industrial Competitiveness ◽  
Distributed Lag ◽  
Long Run ◽  
Auto Regressive ◽  
Analytical Result

The state of Nigeria as regards the effect of trade openness on industrialization is a major concern. This research helps to evaluate this effect. The variables show a long-run relationship, using Bound Cointegration test. The final analytical result was gotten using ARDL (Auto-Regressive Distributed Lag) Co-integration and Long-run form. The results show that trade openness is not significant, and it is negatively related to industrialization. The implication of this is that it hinders industrialization in Nigeria. This is due to excess importation and infrastructure deficit, alongside other factors. The study recommended that existing policies should not be waved aside; there should be engagement in international industrial competitiveness, and stabilization of exchange rate.

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