scholarly journals Financial Development and Macroeconomic Performance: A Cointegration Approach

2021 ◽  
Vol 11 (4) ◽  
pp. 104
Author(s):  
Candida Ferreira
Keyword(s):  
Financial Development ◽  
Financial Institutions ◽  
Panel Cointegration ◽  
International Investment ◽  
Macroeconomic Performance ◽  
Eu Countries ◽  
Cointegration Tests ◽  
International Investment Position ◽  
The Imf

The paper tests the existence of long-term relations between all the IMF financial development indices and some macroeconomic performance indicators applying panel cointegration tests in a panel with 46 countries, and in a panel including only the sub-sample of the 27 EU countries over the interval 1990-2019. Overall, there are no significant differences between the results obtained for the whole sample and the panel including only the EU countries. The results obtained clearly point to the existence of cointegration between the financial development indices and the real Gross Domestic Product, as well as with the inflation, the unemployment rate, the current account, and the net international investment position. The results also show that there are no significant differences between the results obtained for the financial institutions and for the financial markets indices. Moreover, the results related to the specific aspects addressed by the IMF indices very well demonstrate that much more important than the simple access to or the depth of the financial institutions and markets is the efficiency of these institutions and markets.

The Effects of Globalization on Public Expenditures, Tax Revenues, and Public Debt

2021 ◽  
pp. 287-305
Author(s):  
Fazlı Yıldız ◽  
Ersin Nail Sağdıç
Keyword(s):  
Public Debt ◽  
Panel Cointegration ◽  
Public Expenditures ◽  
Eu Countries ◽  
Tax Revenues ◽  
Ecological Aspects ◽  
Cointegration Tests ◽  
Negative Effect ◽  
National Economies

Globalization is a process that transcends national borders, integrates national economies, cultures, technologies, governance and generates complex affairs with interdependence. Considering the emergence of globalization, the way it spreads and its impact areas, economic, financial, political, cultural, technological, geographical, sociological, and ecological aspects are mentioned. In this study, the effect of globalization on public expenditures, tax revenues and public debt in 1995-2017 period for EU countries was investigated within the framework of compensation and efficiency hypotheses. Analysis results indicate that globalization has a negative effect on public expenditures, but a positive effect on tax revenues. Study results analyzing the effects of globalization in EU countries favour the efficiency hypothesis in terms of public expenditures and the compensation hypothesis in terms of tax revenues. In addition, although panel cointegration tests indicate a long-term relationship between globalization and public debt in EU countries, long-term coefficients are not statistically significant.

scholarly journals The Nexus between Financial Development and Economic Growth: Panel Data Evidence from Developing Countries

2021 ◽  
Vol 14 (10) ◽  
pp. 489
Author(s):  
E. M. Ekanayake ◽  
Ranjini Thaver
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Panel Data ◽  
Least Squares ◽  
Financial Development ◽  
Panel Cointegration ◽  
Sub Saharan Africa ◽  
Explanatory Variables ◽  
Cointegration Tests ◽  
Sub Saharan

The objective of this study is to investigate the nexus between financial development (FD) in economic growth (GROWTH) in developing countries. The study uses panel data from 138 developing countries during the period 1980–2018. The relationship between financial development and economic growth is investigated using four explanatory variables that are commonly used to measure the level of financial development and several other control variables, including a dummy variable representing the financial and banking crises. The sample of 138 developing countries is also classified into six geographic regions. We have carried out panel unit-root tests and panel cointegration tests before estimating the specified models using both Panel Least Squares (Panel LS) and Panel Fully Modified Least Squares (FMOLS) methods. In addition, panel Granger causality tests have been conducted to identify the direction of causality between FD and GROWTH for each of the regions. The results of the study provide evidence of a direct relationship between FD and GROWTH in developing countries. Furthermore, there is evidence of bi-directional causality running from FD to GROWTH and from GROWTH to FD in samples of Europe and Central Asia, South Asia, and all countries, but not in East Asia and Pacific, Latin America and the Caribbean, Middle East and North Africa, and Sub-Saharan Africa.

scholarly journals The Financial Development And Economic Growth Nexus: The Role Of Saudi Arabian Financial Institutions

2019 ◽  
Vol 4 (6) ◽  
Author(s):  
Adel Bogari
Keyword(s):  
Economic Growth ◽  
Saudi Arabia ◽  
Financial Development ◽  
Financial Institutions ◽  
Generalized Method Of Moments ◽  
Democratic Accountability ◽  
Law And Order ◽  
Private Credit

The purpose of this paper is to assess the effects of the financial development and the financial institutions quality on the economic growth for the Saudi Arabia. Using generalized Method of Moments (GMM) with a dynamic panel framework, this paper employs different measures of financial development namely the Liquid liabilities (LIQ), Private credit by deposit money banks and other financial institutions (CRE) and Central bank assets (ASS), and for financial institutions quality including socioeconomic conditions, investment profile, law and order, corruption, external conflicts and democratic accountability. For the period (1990-2017), our findings strongly support the hypothesis that financial development leads to growth in the Saudi Arabia. Moreover, empirical results support a positive and significant relationship observed between financial institutions quality and growth. The findings of this paper suggest the need to give more support to the financial development for Saudi Arabia banking that have been launched in the country since the last three decades and to improve the role played by the financial institutions to stimulate saving/investment and, consequently, long-term economic growth.  

Financial Fragility and Its Impacts on International Trade and Economic Growth

2021 ◽  
pp. 158-173
Author(s):  
Ayberk Şeker
Keyword(s):  
Economic Growth ◽  
International Trade ◽  
Gross Domestic Product ◽  
Panel Cointegration ◽  
Financial Fragility ◽  
Domestic Product ◽  
Fragility Index ◽  
Causality Test ◽  
Cointegration Tests

International trade cannot be considered separate from the current financial system in the context of imports and exports. In this context, the impact on international trade should be analyzed under the financial fragility hypothesis. This chapter aims to analyze the effects of financial fragility on Fragile Five and Troubled Ten countries' economic growth and trade strategies. In this direction, long-term relationships between variables are analyzed by Westerlund panel cointegration tests. According to the result of the panel cointegration tests, there are long-term relationships between exports, imports, gross domestic product, and financial fragility index. After determining the long-term relationships between variables, causality analyses have been carried out to reveal the direction of these relationships. According to Dumitrescu-Hurlin panel causality test results, there are bidirectional causality relationships between financial fragility index and export, import, and gross domestic product.

scholarly journals International Logistics and Cross-Border E-Commerce Trade: Who Matters Whom?

2021 ◽  
Vol 13 (4) ◽  
pp. 1745
Author(s):  
Yugang He ◽  
Renhong Wu ◽  
Yong-Jae Choi
Keyword(s):  
Panel Cointegration ◽  
The Sustainable Development ◽  
Vector Error Correction ◽  
Cross Border ◽  
Vector Error ◽  
Long Run ◽  
Cointegration Tests ◽  
Causality Tests ◽  
Short Run

Unlike previous papers on international logistics and cross-border e-commerce trade, this paper sets Organization for Economic Co-operation and Development (OECD) countries as an example to explore the dynamic interaction between international logistics and cross-border e-commerce trade. The panel data for the period 2000–2018 will be employed to perform an empirical analysis via a host of econometric techniques, such as panel unit root tests, panel cointegration tests, panel causality tests and the panel vector error correction model. Incorporating with other control variables, we find that there is a long-term relationship between international logistics and cross-border e-commerce trade. Specifically speaking, in the long-run, international logistics has a positive and significant effect on cross-border e-commerce trade. However, in the short-run, international logistics has a negative and significant effect on cross-border e-commerce trade. Furthermore, the results suggest that deviation from a cointegration system of cross-border e-commerce trade and international logistics will lead to the cross-border e-commerce trade and international logistics changing within the range of approximately 2.2% to 47.2% in the next period. Therefore, referring to these findings, each OECD country’s government should take up corresponding policies to ensure the sustainable development of both international logistics and cross-border e-commerce trade.

scholarly journals Do Financial Development and Economic Openness Matter for Economic Progress in an Emerging Country? Seeking a Sustainable Development Path

2021 ◽  
Vol 14 (6) ◽  
pp. 237
Author(s):  
Ammara Hussain ◽  
Ammar Oad ◽  
Munir Ahmad ◽  
Muhammad Irfan ◽  
Farhan Saqib
Keyword(s):  
Financial Development ◽  
Emerging Economies ◽  
Least Square ◽  
Series Data ◽  
Economic Openness ◽  
Economic Progress ◽  
Cointegration Tests ◽  
The Impact ◽  
The Relationship

While emerging economies face the challenge of competing with developed nations, they are capable of catching up to the developed world. In this context, financial development and the degree of economic openness may provide better living conditions for the current generation without giving up future generations’ prosperity. Therefore, this research’s prime intention is to investigate the impact of economic openness and financial development on economic progress, employing Pakistan’s time-series data from 1975–2018. To examine the long-term association between economic openness, financial development, and economic progress, Autoregressive Distributed Lag (ARDL) cointegration tests were performed and the results present a long-term association between these variables. Findings from ARDL estimates indicate that the relationship between financial development and economic progress is significantly positive in the long term. Contrastingly, the relationship between economic openness and economic progress is significantly positive in the short term. A fully modified ordinary least square technique was applied to check the robustness of the long-term links. The Granger causality test revealed that economic progress is motivated by both economic openness and financial development in an emerging economy such as Pakistan. Thus, policies boosting financial development and economic openness are proposed to put the emerging economies on a path of sustainable economic development.

scholarly journals Financial Development, Financial Inclusion and Primary Energy Use: Evidence from the European Union Transition Economies

Energies ◽  
2021 ◽  
Vol 14 (12) ◽  
pp. 3638
Author(s):  
Yilmaz Bayar ◽  
Mehmet Hilmi Ozkaya ◽  
Laura Herta ◽  
Marius Dan Gavriletea
Keyword(s):  
European Union ◽  
Financial Development ◽  
Financial Institutions ◽  
Energy Use ◽  
Panel Cointegration ◽  
Primary Energy ◽  
Development Index ◽  
Development Indicators ◽  
Private Credit ◽  
Financial Development Index

The main objective of the research is to analyze the impact of financial sector development indicators and financial institutions access on primary energy use based on a sample of European Union transition members over 20 years period (1996–2017) through panel cointegration and causality tests that allow for cross-section dependence. The causality analysis revealed that the direction of the causality among financial development indicators, financial institutions access, and primary energy use varied among the countries. On the other side, panel cointegration coefficients disclosed that the financial development index positively affected the primary energy use, but private credit did not have a significant effect on the primary energy use. Furthermore, financial institutions’ access had a significant negative impact on primary energy use. However, country-level cointegration coefficients indicated that the financial development index positively affected the primary energy use in Bulgaria, Croatia, Czechia, Hungary, and Slovenia, and private credit also had a positive impact on primary energy use in Bulgaria, Czechia, Estonia, Hungary, Lithuania, Poland, and Slovakia, but the effect of financial development index on primary energy use was found to be very higher than that of private credit. Moreover, financial institutions’ access negatively affected the primary energy use in Croatia, Estonia, Hungary, Poland, and Romania.

scholarly journals Myanmar

2020 ◽  
Vol 20 (47) ◽  
Author(s):  
Keyword(s):  
Direct Investment ◽  
Technical Assistance ◽  
Oil And Gas ◽  
International Investment ◽  
Asia Pacific ◽  
Hands On ◽  
The Government ◽  
External Sector ◽  
International Investment Position ◽  
The Imf

A technical assistance (TA) mission on external sector statistics (ESS) was conducted for the Directorate of Investment and Company Administration of Myanmar (DICA) in Yangon during April 10–12, 2019. This was the sixth mission under the Project on the Improvement of ESS in the Asia–Pacific region. The Project is funded by the Government of Japan; managed by the IMF Statistics Department (STA); and implemented by the IMF Capacity Development Office in Thailand (CDOT). Intensive hands-on training provided to the DICA through peripatetic TA missions have effectively contributed to building up capacity for DICA compilers, which have gradually materialized and translated into successful FDI surveys (FDIS) conducted last year. Data coverage has significantly improved through inclusion of foreign direct investment (FDI) in oil and gas sector, which is one of the largest FDI recipients for Myanmar. Moreover, the DICA also compiles quarterly FDI flows and positions; and submits to the Central Bank of Myanmar (CBM) on a regular basis to support the CBM’s compilation of the balance of payments and international investment position (IIP). The DICA also participates in the Coordinated Direct Investment Survey (CDIS), with regular submission of data to the STA.

scholarly journals Currency Crisis: The Case Of Iceland

2010 ◽  
Vol 9 (11) ◽  
Author(s):  
Merouane Lakehal-Ayat
Keyword(s):  
Financial System ◽  
International Investment ◽  
Investment Horizon ◽  
Rate System ◽  
Monetary Policies ◽  
Exchange Rate System ◽  
The Government ◽  
Short Term Investment ◽  
International Investment Position

The purpose of this research paper is to analyze the Krona (the Icelandic currency) from an investment perspective while determining what has influenced its recent value deterioration.  The paper looks at many different variables that have influenced the currency since the 1980s.  These factors include: Iceland’s market-based economy, the layout of their financial system, the exchange rate system, balance of payments, international investment position, and the fiscal/monetary policies that influence their society.  When investing in this currency, it is vital to understand the importance of each of these factors and their role in the valuation of the currency as an investment.  With the recent decline of the Krona’s value, recommendations are put forward regarding Iceland’s currency’s management.  Due to the fact that their financial system has been the backbone of their economy over the last decade, they need to stabilize this system first and foremost.  As soon as the economy will display signs of recovery, the government must take measures to curb the deficit and external debt, while encouraging the diversification of the Icelandic economy.  Moreover, Iceland must do its best to join the Euro zone.  In that context and from an investment approach; namely, trading the Krona, individuals should sell it if they have a short-term investment horizon.  However, in the long-term ranging from three to five years, the currency promises modest return. 

Portigon v Spain: new frontiers for financial institutions in investor–state arbitration?

2020 ◽  
Vol 36 (4) ◽  
pp. 601-609
Author(s):  
Kate Apostolova
Keyword(s):  
Financial Institutions ◽  
Financial Institution ◽  
International Investment ◽  
Project Finance ◽  
International Arbitration ◽  
Investment Treaty ◽  
Investment Treaties ◽  
Dispute Resolution Mechanism ◽  
First Time

Abstract Historically, financial institutions have preferred litigation over arbitration as a dispute resolution mechanism. In recent years, however, financial institutions have turned to international arbitration more often. This is reflected in the 2018 Queen Mary International Arbitration Survey which concluded that financial institutions are ‘contemplating arbitration with much greater interest than ever before’. In addition to incorporating international arbitration clauses more often in their contracts, financial institutions have become increasingly aware of the protections established by international investment treaties and are more actively seeking to benefit from the rights they establish for qualifying investors. A recent decision has revealed how important those rights could be. In August 2020, for the first time in investor–state arbitration, in Portigon v Spain, a tribunal found that a financial institution may seek protection under an investment treaty for project finance because project finance, in the form of long-term loans and swaps, constitutes a protected ‘investment’ under the relevant investment treaty. While the decision remains confidential as of the publication of this article, it is an opportune moment to review the proposition that project financiers may seek protection under investment treaties against state actions that affect adversely the projects they are financing.

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