scholarly journals Effects of Corruption and the Black Economy on Economic Growth in the CFA Franc Zone Countries

2021 ◽  
pp. 33-45
Author(s):  
Raphaël Erick Assoa Essono ◽  
Ibrahim Nji Ngouhouo
Keyword(s):  
Economic Growth ◽  
Negative Relationship ◽  
Underground Economy ◽  
Group Method ◽  
Franc Zone ◽  
Pooled Mean Group ◽  
Long Run ◽  
Short Run ◽  
Cfa Franc Zone ◽  
Cfa Franc

We conducted this study to empirically analyse the effects of corruption and the underground economy on economic growth in the case of the CFA franc zone countries over the period 2000-2016. To do so, we have carried out econometric estimations using panel data. Our empirical results obtained by the PMG (Pooled Mean Group) method confirm a negative relationship between economic growth and the underground economy in the short and long term. However, the long-run effect of corruption on economic growth is positive, while this effect becomes negative in the short run. The results could provide insight into different ways of fighting corruption and the shadow economy.

scholarly journals Does financial system development, capital formation and economic growth induces trade diversification?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sohail Amjed ◽  
Iqtidar Ali Shah
Keyword(s):  
Economic Growth ◽  
System Development ◽  
Negative Relationship ◽  
Financial System ◽  
Capital Formation ◽  
Sultanate Of Oman ◽  
Content Type ◽  
Long Run ◽  
Short Run ◽  
Oil Sector

PurposeThe purpose of this study is to investigate long-run and short-run relationships between trade diversification, financial system development, capital formation and economic growth.Design/methodology/approachARDL estimation approach is applied to analyze long-run and short-run relationships between the financial system development, capital formation, economic growth and trade diversification in case of the Sultanate of Oman over the period 39 years starting from 1979 till 2017.FindingsThe results show that financial system development and economic growth has a positive impact on trade diversification in the short-run and long-run. However, capital formation has a negative impact on trade diversification in the short run and long run. The negative relationship between trade diversification and capital formation implies that over the period of study, the investment in capital goods was made to enhance the production capacity of the oil sector to maximize revenue.Research limitations/implicationsThis research is limited to analyze long-run and short-run relationship between the financial system development, capital formation and economic growth and trade diversification in case of Sultanate of Oman.Practical implicationsTo achieve the diversification goal, the policymakers need to formulate policies to strengthen the financial system and invest in infrastructure development to promote the non-oil sector. The research findings of this study will provide insights to the policymakers to formulate an effective diversification policy.Originality/valueThis research contributes to the existing literature by providing empirical evidence of the short-run and long-run analysis of the selected variables in the context of an oil-dependent country.

scholarly journals Nexus Among Tourism, Environmental Degradation, Inward FDI and Economic Growth: Fresh Evidence from ASEAN Countries

2020 ◽  
Author(s):  
Muhammad Azam ◽  
Sameena Noor ◽  
Muhammad Atif Nawaz
Keyword(s):  
Economic Growth ◽  
Environmental Degradation ◽  
Causal Link ◽  
Positive Influence ◽  
Jel Classification ◽  
Pooled Mean Group ◽  
Long Run ◽  
Short Run ◽  
Asean Countries ◽  
Tourism Arrivals

Abstract This study aims to investigate the linkage among tourism, foreign direct investment, environmental degradation by CO2 emissions and economic growth in five countries from Association of Southeast Asian Nations (ASEAN) over 1995–2017. The outcomes of pooled mean group (PMG) estimator reveal that FDI and international tourism arrivals have a significantly positive influence on economic growth both in the short-run and the long-run. The association between growth and CO2 emissions is found negative and significant. The Granger causality result reveals that there is bidirectional causality between FDI and growth, tourism and growth and FDI and tourism. A unidirectional causal link is found between CO2 emissions and growth, tourism and population and population and CO2 emissions. These findings suggest enhance more inward FDI, control environmental pollution, but also necessary to attract more tourists towards these countries, which in turn, generate revenue and boost up economic growth and development.JEL Classification Codes: F21; O13; O47; Z32

scholarly journals Impact of Inflation Targeting Policy Framework of Countries between the Period of 2009-2019

2021 ◽  
Vol 7 (2) ◽  
Author(s):  
Ananda Rathnayake
Keyword(s):  
Economic Growth ◽  
Money Supply ◽  
Inflation Targeting ◽  
Karl Marx ◽  
Time Series Data ◽  
Negative Relationship ◽  
Policy Framework ◽  
Series Data ◽  
Long Run ◽  
Short Run

Today, many countries in the world tend to choose Inflation Targeting Monetary Policy Framework, in which context it has become a matter of debate whether inflation or economic growth is driven by monetary expansions. The common acceptance is that inflation is created by the continuous rise in the money supply which is strongly proved through the economic theories forwarded by Karl Marx, Irvin Fisher and Friedman. The main aim of the study is to examine the relationship between money supply and economic growth under a broad phenomenon by utilizing the countries with inflation targeting policies in action. The time-series data have been collected from different countries that exercise inflation targeting from 2009 to 2019 and the sample included 39 countries from all over the globe, both from developed and developing categories. The utilized Autoregressive Distribution Lag (ARDL) model forwarded the results suggesting that there is a significant negative relationship between the economic growth and money supply in the long run while no relationship has been observed in the short run.

Economic growth, inequality and trade in developing countries

2016 ◽  
Vol 15 (3) ◽  
pp. 240-253 ◽  
Author(s):  
Muhammad Tariq Majeed
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Open Economy ◽  
Developing Economies ◽  
Negative Relationship ◽  
Growth Effect ◽  
Data Set ◽  
Content Type ◽  
Long Run ◽  
Short Run

Purpose The purpose of this study is to analytically explore and empirically test the relationships between economic growth, inequality and trade using a panel data set of 65 developing economies from 1965 to 2010. Design/methodology/approach This study sets a theoretical framework to explain the growth-trade nexus differentials in the developing economies. The study uses different econometric methods such as General Method of Moments to address the relationship of trade with growth in the presence of high inequalities. Findings The study determines the positive effect of trade on growth both in the short-run and in the long-run. However, the growth effect of trade is substantially influenced by the domestic context in terms of the prevalence of high initial inequalities. The study identifies high initial inequalities in developing countries as the likely reason for a negative relationship between trade and economic growth. The trade-growth nexus is significantly negative for the unequal group but strongly significantly positive for the less unequal one. Practical implications Those developing economic which mange to ameliorate inequalities are in a better position to compete in an open economy. Originality/value The study contributes in the existing literature by answering the question why growth effects of trade are not definitely positive or negative. The findings of the studies may help the policy-makers of developing economies to take the advantage of increasing international trade.

scholarly journals Relative Impact of Domestic and Foreign Public Debt on Economic Growth in South Africa

2020 ◽  
pp. 193672442098041
Author(s):  
Talknice Saungweme ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Public Debt ◽  
Foreign Debt ◽  
Negative Relationship ◽  
Relative Impact ◽  
Long Run ◽  
Short Run ◽  
The Government ◽  
The Impact

This paper investigates the debt-growth nexus by testing both the impact of aggregate public debt on economic growth and the relative impact of domestic and foreign public debt on economic growth using South Africa as the case study—from 1970 to 2017. Based on the autoregressive distributed lag (ARDL) technique, the findings reveal that the impact of aggregated public debt on economic growth in South Africa is statistically significant and negative, both in the short run and in the long run. The results further reveal that domestic public debt and economic growth have a statistically significant and positive relationship in the short run only. Furthermore, foreign public debt has a statistically significant and negative relationship with economic growth but only in the long run. Therefore, the study recommends the government to manage effectively its debt and to finance long-term high-returning productive investments that should translate into economic growth. Finally, the study cautions the country against growing public debt, predominantly foreign debt, to finance its increasing recurrent expenditure needs.

scholarly journals Natural Resources and the Economic Growth of West Africa Economies

2021 ◽  
Vol 8 (2) ◽  
pp. 20
Author(s):  
Michael Asiedu ◽  
Ebenezer Nana Yeboah ◽  
David Owusu Boakye
Keyword(s):  
Economic Growth ◽  
West Africa ◽  
Natural Resources ◽  
Oil And Gas ◽  
Correction Term ◽  
Negative Relationship ◽  
Mineral Resources ◽  
Significance Level ◽  
Long Run ◽  
Short Run

In this study, we employed the pooled mean group (PMG) regression to examine the effect of natural resources economic rent (coal rent, gas rent, oil rent, forest rent, minerals rent) and foreign direct investment (FDI) on economic growth in West Africa for the period 1996 to 2017. We found strong evidence of a positive relationship between FDI, total natural resources (TNR), total natural gas (TNG), and economic growth in the long-run. However, the study recorded a negative relationship between mineral resources rent, oil rent and gas rent, and economic growth in the long run. The rent from coal also exhibited neutrality on economic growth. While all the short-run coefficients are not statistically significant, the error correction term (ECT) is significant and a negative value of -0.889, signifying cointegration at a 1% significance level. This also implies that the short-run estimates converge towards the long-run estimates to achieve equilibrium at the speed of 89% per annum. Our findings highlight the significance of FDI and total rent from natural resources in stimulating West African economies' growth in the industrialization drive and general welfare. In contrast, this study also highlights the need for policy direction to redesign and realign ownership in the oil and gas sector from multinational co-operations (MNCs) to the locals and the domestic economy to benefit directly from the prevailing environment.

scholarly journals MODES OF ISLAMIC FINANCING AND ECONOMIC GROWTH: EVIDENCE FROM INDONESIA

2021 ◽  
Vol 7 (3) ◽  
Author(s):  
Laily Dwi Arsyianti ◽  
Fadiyah Hasta Puspitasari ◽  
Marhamah Muthohharoh
Keyword(s):  
Economic Growth ◽  
Consumer Price Index ◽  
Government Expenditure ◽  
Negative Relationship ◽  
Household Expenditure ◽  
Dummy Variable ◽  
Long Run ◽  
Fixed Capital Formation ◽  
Short Run ◽  
Economy System

Financing is expected to positively support economic growth, especially using Islamic contracts, which are strictly obliged to link the monetary and real sectors. Crises can devastate the financial and economy sectors, and also shock the real sector. This study aims to analyse the effect of Islamic-based financing on economic growth in Indonesia using the ARDL method. Gross fixed capital formation, household expenditure, government expenditure, exports, imports and the consumer price index, together with Islamic financing, are analysed in terms of their effect on economic growth in Indonesia during the period 2003-2018, in which the 2008 crisis is set as a dummy variable. Musharaka financing, which is based on profit-loss sharing, has a relationship with economic growth in the short run, but not in the long run. Furthermore, mudaraba financing unpredictably shows a negative relationship with economic growth, while Murabaha does not have significant effect in either short- or long-run estimation. The results imply that the prevailing economy system, which accommodates household expenditure, leads to an increase in economic growth, so is recommended as a priority sector for development. This study supports the notion that the current traditional economic stance may not suit the measurement of Islamic finance implication towards economic growth. The Maqasid sharia inclusiveness measurement is considered as an alternative estimation of the effect of modes of financing on economic growth.

HEALTH, AGRICULTURAL EXPENDITURE AND ECONOMIC GROWTH IN NIGERIA: ARDL AND ECM APPROACH

2019 ◽  
Vol 10 (2) ◽  
pp. 127-152
Author(s):  
Olayemi Henry Omotayo ◽  
Aderemi Timothy Ayomitunde ◽  
Adeagbo Olayinka Afolakemi ◽  
Olajide Olufunmilayo Aromoke
Keyword(s):  
Economic Growth ◽  
Unit Root ◽  
Health Expenditure ◽  
Negative Relationship ◽  
Equilibrium Path ◽  
Order Zero ◽  
Correction Model ◽  
Long Run ◽  
Significant Negative Relationship ◽  
Short Run

This study examines the short run and long relationship between agricultural expenditure, health expenditure and economic growth in Nigeria. This study was motivated due to the lack of sufficient studies regarding this subject matter in recent times. Consequently, Data were collected from CBN Statistical Bulletin from 1981 to 2016. Relevant pre-estimation tests such as unit root and Bound tests were carried out because all the study variables were integrated of order zero and one. Estimated results from ARDL and ECM models established the existence of a short-run and long-run relationship between the variables of interest in Nigeria. While the error correction model reveals that about 19 percent of total disequilibrium due to external shock in the previous year is corrected in the current year. Therefore, it will take about five (5) years for the system to adjust back to its long-run equilibrium path. Results further showed that there is a significant positive relationship between agricultural expenditure and economic growth in Nigeria. However, there is a significant negative relationship between health expenditure and economic growth in the long run. Finally, policymakers in Nigeria should allocate substantial budget towards health and agricultural sectors in Nigeria.

scholarly journals Budget Deficit and Economic Growth in Sub-Saharan Africa: A PMG Approach

2020 ◽  
pp. 1-10
Author(s):  
Gbenga Oladapo Awolaja ◽  
Ikponmwosa Osagie Esefo
Keyword(s):  
Economic Growth ◽  
Significant Relationship ◽  
Budget Deficit ◽  
Estimation Method ◽  
Sub Saharan Africa ◽  
Policy Makers ◽  
Pooled Mean Group ◽  
Long Run ◽  
Short Run ◽  
Sub Saharan

The relationship between budget deficit and economic growth remains one of the widely debated topics among policy makers and economists in both developed and developing countries of the world. This paper empirically investigated the long run and short run relationship between budget deficit and economic growth in sub-Saharan Africa countries from 1991 to 2018 using Panel data for twenty (20) sub-Saharan Africa Countries. The estimation technique employed in the study was the Pooled Mean Group (PMG) estimation method and the regression results revealed that in the long run, budget deficit has a negative and significant relationship with economic growth whereas in the short run, it has a positive and significant relationship with economic growth. The study concluded that government should reduce the overall recurrent expenditure as it will help to mitigate the problem of budget deficit that leads to debt accumulation in sub-Saharan Africa countries and increase expenditure on developmental projects.

scholarly journals Critical Analysis of Governance, Economic Freedom, and Human Capital Implications on Sustainable Economic Growth: Evidence from Sub-Saharan Africa

2021 ◽  
Vol 7 (08) ◽  
Author(s):  
Yusuf Ayotunde Ayodeji
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Causal Relationship ◽  
Economic Freedom ◽  
Sub Saharan Africa ◽  
Pooled Mean Group ◽  
Long Run ◽  
Short Run ◽  
Sub Saharan ◽  
Sustainable Economic Growth

In the recent time, the attention of scholars have shifted towards deeper understanding of factors that drives the achievement of sustainable economic growth, but yet factors such as governance, economic freedom, and human capital have not been exhaustively investigated, especially within the context of Sub-Saharan Africa (SSA). Thus, this study investigates the implications of governance, economic freedom, and human capital on the sustainability of economic growth in the SSA, usingpanel data that spanned between 1996 and 2018, and employed a Pooled Mean Group (PMG) estimator for the analysis. This study found governance, economic, and human capital to have a positive and significant causal relationship with economic growth in the long-run, while only economic freedom was found to have a negative and significant causal relationship with economic growth in the short-run. In addition, this study found that in case of disequilibrium, the model has a convergent speed of adjustment of about 10.8%. The study implications were discussed in the study.

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