scholarly journals Nonlinearity between financial development and the shadow economy: Evidence from Jordan

Accounting ◽  
2021 ◽  
pp. 1049-1054
Author(s):  
Ziad M. Abu-Lila ◽  
Sameh Ajlouni ◽  
Abdallah Ghazo
Keyword(s):  
Financial Development ◽  
Positive Relationship ◽  
Shadow Economy ◽  
Cointegration Test ◽  
Nonlinear Relationship ◽  
Estimation Technique ◽  
Empirical Results ◽  
Profound Implication ◽  
Long Run

The present study empirically investigates the long-run nonlinear relationship between the shadow economy and financial development targeting developing small open countries, such as Jordan. The study applied the cointegration test as an estimation technique in order to achieve its aim. The data used were mainly taken from Jordanian economy during the period (1990-2019). According to the test of Johanson cointegration, the empirical results of this study showed evidence of a long run inverted U-shaped relationship between the shadow economy and financial development. The results also showed that there is a long run positive relationship between inflation and the shadow economy. Consequently, these results lead to a profound implication when adopting policies to reduce the size of the shadow economy.

A CONTEMPORARY RE-EXAMINATION OF MALAYSIA’S ECONOMIC GROWTH: THE ISSUES OF EQUITY, EFFICIENCY AND LIBERALIZATION

2017 ◽  
Vol 62 (02) ◽  
pp. 509-530 ◽  
Author(s):  
AZFAR HILMI BAHARUDIN ◽  
YAP SU FEI
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Least Squares ◽  
Financial Development ◽  
Direct Investment ◽  
Positive Relationship ◽  
Empirical Investigation ◽  
Ordinary Least Squares ◽  
Statistical Relationship ◽  
Long Run

This paper is an empirical investigation on economic growth for Malaysia, with focus on income inequality, foreign direct investment (FDI), financial development and trade. Co-integrating regression procedures namely, fully modified ordinary least squares (FMOLS), canonical co-integrating regression (CCR) and dynamic ordinary least squares (DOLS) were employed. Positive relationship between growth with financial development and trade are found to be consistent across all estimations. Income inequality on the other hand though negative, does not seem to exhibit robust significant statistical relationship with growth. The orders of integration for variables used have been demonstrated to be governed such that a long-run relationship prevails.

scholarly journals The Dynamic Effects of Growth, Financial Development and Trade Openness on Tax Revenue in Malaysia

2020 ◽  
Vol 21 (1) ◽  
pp. 42-62
Author(s):  
Nanthakumar Loganathan ◽  
Norsiah Ahmad ◽  
Thirunaukarasu Subramaniam
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Trade Openness ◽  
Tax Revenue ◽  
Tax Collection ◽  
Empirical Results ◽  
Long Run ◽  
Rolling Window ◽  
Short Run ◽  
Sustainable Economic Growth

This study explores the effects of domestic financial development, growth and trade openness on tax collection for Malaysia using the ARDL and bootstrap rolling window estimates covering the period 1970-2017. The empirical results suggest that, the presence oflong-run relationship between tax revenue and per capita GDP and short-run relationship between tax collection, economic growth, financial development and trade openness. We foundthatthere is a short-run unidirectional causality running between tax collection, economic growth and financial development. This result suggests that, in the long-run, economic performance and financial development have an adverse effect on tax collection, while trade openness has no significant causality impact on tax collection in Malaysia. Based on the empirical results of the study, the country should pay more attention to enhance the effectiveness of future public expenditure programs and put more emphasisson dynamic fiscal policy targeting on tax reform and securing new sourcesof tax revenues to ensure continuous flow of long-term tax revenue coupled with sustainable economic growth, trade and financial performances in up-coming years.

scholarly journals How Does Climate Change Affect Rice Production in Thailand? Assessing the Role of Financial Development

2022 ◽  
Author(s):  
Abbas Ali Chandio ◽  
Martinson Ankrah Twumasi ◽  
Fayyaz Ahmad ◽  
Ghulam Raza Sargani ◽  
Yuansheng Jiang
Keyword(s):  
Climate Change ◽  
Labor Force ◽  
Financial Development ◽  
Socioeconomic Development ◽  
Causal Link ◽  
Rice Production ◽  
Policy Implications ◽  
Empirical Results ◽  
Long Run ◽  
Domestic Credit

Abstract The study aims to examine the impacts of climate change (CC) and financial development (FD) on rice production (RP) in Thailand from the period 1969 to 2016 by using the ARDL and VECM framework. The empirical results revealed that in the long- run (LR) and short-run (SR) there is a reduction in rice production as temperature increase. The carbon dioxide (CO2) positively affects rice production in the (LR), while this connection is negative in the SR. The empirical results further confirmed that in the LR and SR domestic credit provided by the financial sector positively and significantly improved rice production, while domestic credit to private sector by banks negatively affect rice production. The important input factors including cultivated area, fertilizers use and labor force positively and significantly contributed to rice production in both LR and SR. The LR causal link of all variables with rice production is validated. The SR causal association is unidirectional among temperature, CO2 emissions, financial development, labor force and rice production. Additionally, the IRF and VDM outcomes also confirm that both climate change and socioeconomic development are crucial for rice production in Thailand. The study offers important policy implications to improve rice production with the help of improved financial system and climate controls.

Does Financial Development Moderate the Effects on Growth Volatility? The Experience of Malaysia

2020 ◽  
Vol 14 (4) ◽  
pp. 361-381
Author(s):  
Chor Foon Tang ◽  
Salah Abosedra
Keyword(s):  
Financial Development ◽  
Negative Impact ◽  
Trade Openness ◽  
Policy Implications ◽  
Annual Data ◽  
Empirical Results ◽  
Inflation Volatility ◽  
Long Run ◽  
The Impact ◽  
Growth Volatility

This article examines whether financial development can moderate the effects of growth volatility in the Malaysian economy. Using annual data from 1972 to 2018, we noted the existence of a strong link between growth volatility and financial development over the long-run. The findings also indicate that financial development alleviates the incidence of growth volatility over the long-run. Our basic estimated model shows further that trade openness has a significant positive impact on growth volatility, while inflation volatility, inward FDI and financial development have a significant negative impact on growth volatility in Malaysia. This model is extended to count the moderating effects of financial development on the impact of inflation volatility, trade openness and FDI on growth volatility in Malaysia. The results show that financial development not only has a direct impact on growth volatility but it also moderates the impacts of inflation volatility, trade openness and FDI on growth volatility. Therefore, our results extend established findings on the finance-growth volatility nexus for the Malaysian economy. More importantly, it shows additional possible benefits from financial development for growth stability. Furthermore, we note that ignoring such benefits may have contributed to the conflicting empirical results reported in the finance-growth volatility literature. We offer some specific policy implications based on such empirical results that are beneficial to the Malaysian economy and other countries in the region. JEL Classification: C32, E32, O16

scholarly journals Financial Development and Stock Traded Contributions towards Economic Growth

2015 ◽  
Vol 2 (1) ◽  
pp. 5-8
Author(s):  
Shehper Maryam Zafar ◽  
Nadia Bukhari
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Financial Development ◽  
Positive Relationship ◽  
Time Series Data ◽  
Series Data ◽  
Long Run ◽  
Short Run ◽  
Long Term Impact

This purpose of this research is check the long run as well as short run impact of Financial Development and Stock traded on the economic growth in the scenario of Pakistan. The time series data has taken for the year 1988-2013. This paper utilized ARDL methodology to determine long-term impact of Financial Development and Stock Traded on Economic growth. Further Granger Causality Check has used to check a uni-directional relationship. The results of this test support that FD and stock traded has a uni-directional impact over economic growth. Further, it has depicted from ARDL that there is a positive relationship between FD and Economic Growth as well as Stock Traded and Economic Growth.

Financial Development and Energy Consumption in Turkey

2015 ◽  
pp. 297-314 ◽  
Author(s):  
Murat Çetin ◽  
Eyyup Ecevit ◽  
Fahri Seker ◽  
Davuthan Günaydin
Keyword(s):  
Energy Consumption ◽  
Financial Development ◽  
Significant Relationship ◽  
Granger Causality Test ◽  
Bounds Testing ◽  
Causality Test ◽  
Correction Model ◽  
Empirical Results ◽  
Long Run ◽  
Ardl Bounds Testing

This chapter investigates the cointegration and causal relationship between financial development and energy consumption in the case of Turkey over the period 1960-2011. In doing so, the ARDL bounds testing and Johansen-Juselius approaches to cointegration and Granger causality test based on vectorerror correction model are employed. The empirical results show that the series are cointegrated. The empirical results also show a positive and statistically significant relationship between financial development and energy consumption in the long run. In addition, a unidirectional causality running from financial development to energy consumption is found in the short and long run. Thus, this chapter provides an empirical evidence that financial development is a determinant of energy consumption in Turkey. This chapter also presents some implications for Turkey's energy policy.

scholarly journals Analysis of FDI and Financial improvements for the Economic growth

2017 ◽  
Vol 4 (1) ◽  
pp. 29-32
Author(s):  
Nadia Bukhari ◽  
Atiq ul Rahman Malik
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Financial Development ◽  
Positive Relationship ◽  
Time Series Data ◽  
Series Data ◽  
Long Run ◽  
Short Run ◽  
Long Term Impact

This study is conducted in order to check the long run as well as short run impact of FDI and Financial Development on the economic growth. The study is conducted in the scenario of Pakistan and the time series data is taken for the year 1972-2013. ARDL methodology is used to determine whether FDI has long-term impact on Economic growth or not. Moreover, Granger Causality is used to check a uni-directional relationship and the results support that FDI has an impact over economic growth. Further, it is depicted from ARDL that there is a positive relationship between FDI and Economic Growth.

scholarly journals The Relationship Between Financial Development and Economic Growth in The United Kingdom: A Granger Causality Approach

2021 ◽  
Vol 2 (1) ◽  
pp. 47-71
Author(s):  
Samuel Wesiah ◽  
Sixtus Cyprian Onyekwere
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Financial Development ◽  
Granger Causality Test ◽  
Cointegration Test ◽  
Gdp Per Capita ◽  
Causality Test ◽  
Long Run ◽  
Per Capita ◽  
The Uk

This study aims to investigate the causal relationship between financial development and economic growth in the UK using quarterly data from 1963q1 to 2015q1. Three variables were used as proxies for financial sector development, namely, ratios of broad money supply to GDP, ratios of private sector credit to GDP and the ratios of stock market capitalization to GDP.  Economic growth was measured using real GDP per capita. In order to achieve stated aim, the study employed the Johansen Cointegration test and the Granger causality test within a vector error correction framework (VEC) to test for the existence (or not) of a long run relationship as well as the direction of causality between financial development and economic growth. The result from the Cointegration test indicates that there is a stable long run equilibrium relationship between financial development and economic growth in the UK. The Granger causality test presents evidence of a bidirectional causality. This suggests that financial development and economic growth are mutually causal, that is, causality runs from both side which is in line with the feedback hypothesis in the literature which argue that financial development and economic growth exhibits a two-way causal relationship. In terms of each individual variable, the study finds that while bank credit to the private sector and stock market capitalisation Granger cause GDP per capita, GDP per capita on the other hand, Granger causes broad money supply.

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