scholarly journals Cointegration analysis and VECM of FDI, employment, export and GDP in Croatia (2002?2017) with particular reference to the global crisis and poor macroeconomic governance

Equilibrium ◽  
2020 ◽  
Vol 15 (4) ◽  
pp. 761-783
Author(s):  
Marinko Škare ◽  
Justyna Franc-Dąbrowska ◽  
Dajana Cvek
Keyword(s):  
Capital Investment ◽  
Value Added ◽  
Political Stability ◽  
Cointegration Analysis ◽  
Foreign Direct Investments ◽  
Model Decomposition ◽  
Economic Agents ◽  
Long Run ◽  
Adf Test

Research background: The preconditions for attracting foreign investment are political stability and long-term capital investment, positively influencing the recipient country's development. During the crisis as well as in the unstable political environment, economic agents engage in speculative and risky acts for faster earnings. Purpose of the article: The paper aims to point out the importance of foreign direct investments (FDI) and other macroeconomic variables and their relationship with particular reference to the Croatian economy in 2002?2017. Methods: We use ADF test, development of the VECM model, testing of the stability of the VECM model, decomposition of the variance of the predictive errors of the variables, analysis of responses to unit orthogonal pulses. The vector correction auto-regression model (VECM) explores the long-term relationship between (FDI) and macroeconomic indicators in crisis time. Findings & Value-added: Applying the VECM model, we find that employment, export, and GDP variables are exogenous in the short term. The FDI variable is statistically significant and adjusts for the long-run equilibrium. Analyzing the responses to unit shocks, we conclude there is weak feedback of the observed variables and a weak effect of the observed variables in the Croatian economy. The FDI variable does not affect GDP, employment, and exports in Croatia due to poor macroeconomic management, corruption, regional development, inefficiency, and inefficient foreign direct investment structure.

Long run apartment price dynamics in Swedish and German cities

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sviatlana Engerstam
Keyword(s):  
Banking Sector ◽  
Cointegration Analysis ◽  
Price Dynamics ◽  
Long Term Effects ◽  
Content Type ◽  
Macroeconomic Variables ◽  
Price Elasticities ◽  
Long Run ◽  
German Cities

PurposeThis study examines the long term effects of macroeconomic fundamentals on apartment price dynamics in major metropolitan areas in Sweden and Germany.Design/methodology/approachThe main approach is panel cointegration analysis that allows to overcome certain data restrictions such as spatial heterogeneity, cross-sectional dependence, and non-stationary, but cointegrated data. The Swedish dataset includes three cities over a period of 23 years, while the German dataset includes seven cities for 29 years. Analysis of apartment price dynamics include population, disposable income, mortgage interest rate, and apartment stock as underlying macroeconomic variables in the model.FindingsThe empirical results indicate that apartment prices react more strongly on changes in fundamental factors in major Swedish cities than in German ones despite quite similar development of these macroeconomic variables in the long run in both countries. On one hand, overreactions in apartment price dynamics might be considered as the evidence of the price bubble building in Sweden. On the other hand, these two countries differ in institutional arrangements of the housing markets, and these differences might contribute to the size of apartment price elasticities from changes in fundamentals. These arrangements include various banking sector policies, such as mortgage financing and valuation approaches, as well as different government regulations of the housing market as, for example, rent control.Originality/valueIn distinction to the previous studies carried out on Swedish and German data for single-family houses, this study focuses on the apartment segment of the market and examines apartment price elasticities from a long term perspective. In addition, the results from this study highlight the differences between the two countries at the city level in an integrated long run equilibrium framework.

scholarly journals Moderating Effect of Political Instability on ICT and Economic Growth Nexus in Kenya: ARDL Bound - Co-Integration Approach

2021 ◽  
Vol 04 (10) ◽  
Author(s):  
Matundura Erickson ◽  
Keyword(s):  
Economic Growth ◽  
Political Instability ◽  
Political Stability ◽  
Moderating Effect ◽  
High Interest ◽  
Long Run ◽  
The Government ◽  
The Impact ◽  
Adf Test ◽  
The Relationship

The government has attempted to target specific macroeconomic factors in order to stimulate economic growth in Kenya through monetary and fiscal policies. Despite these efforts, Kenya's GDP growth is hampered by high interest rates and high interest rate volatility. Kenya's ability to address macroeconomic instability hinges on its ability to increase economic growth. Auxiliary evidence shows that perspectives on the relationship between ICT and economic growth are segmented. The goal of this study was to determine the impact of ICT on economic growth in Kenya, as well as the moderating effect of political instability on the relationship. The research was based on Solow's theory of growth. An explanatory research design was used, with data spanning from 1990-2020 obtained from Kenya Bureau of Statistics. In the empirical analysis, the study used the bound test to test for a long-run relationship and the Autoregressive Distributed Lag model (ARDL) to evaluate the relationship between the variables. The data was subjected to an Augmented Dickey Fuller (ADF) test to determine stationarity.The long run ARDL results indicated that the coefficients of; ICT rate were insignificant . However with the introduction of political instability as the moderator ICT was significant and positively affected economic growth. Political instability moderated the relationship between ICT ( and economic growth. As a result, promoting effective governance should help to improve political stability. The findings of this study will help the government figure out how to address the problem of low economic growth. According to the study, the government should invest in the ICT sector to improve its accessibility and affordability. Additionally, the government should work to improve political stability and good governance by gradually establishing institutions that uphold the rule of law and provide security.

scholarly journals Population and Economic Growth Under Different Growth Engines

2017 ◽  
Vol 18 (2) ◽  
pp. 182-211 ◽  
Author(s):  
Alberto Bucci ◽  
Xavier Raurich
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Human Capital ◽  
Population Growth ◽  
Capital Accumulation ◽  
Capital Investment ◽  
Human Capital Investment ◽  
Physical Capital ◽  
Long Run

Abstract Using a growth model with physical capital accumulation, human capital investment and horizontal R&D activity, this paper proposes an alternative channel through which an increase in the population growth rate may yield a non-uniform (i.e., a positive, negative, or neutral) impact on the long-run growth rate of per-capita GDP, as available empirical evidence seems mostly to suggest. The proposed mechanism relies on the nature of the process of economic growth (whether it is fully or semi-endogenous), and the peculiar engine(s) driving economic growth (human capital investment, R&D activity, or both). The model also explains why in the long term the association between population growth and productivity growth may ultimately be negative when R&D is an engine of economic growth.

Foreign direct investments, democracy, and economic growth in Turkey

2017 ◽  
Vol 44 (2) ◽  
pp. 232-252 ◽  
Author(s):  
Nazif Durmaz
Keyword(s):  
Positive Impact ◽  
Small Sample Size ◽  
Emerging Market ◽  
Spillover Effects ◽  
Small Sample ◽  
Cointegration Analysis ◽  
Foreign Direct Investments ◽  
Bounds Testing ◽  
Content Type ◽  
Long Run

Purpose In the last decade, foreign direct investment (FDI) flows have increased dramatically in the world, especially in the emerging economies. Some of these countries make changes in their market conditions that will improve the civil rights and liberties to attract better FDI flows. The purpose of this paper is to test the linkage between democracy and FDI flows to Turkey. Design/methodology/approach The present study employs a bounds testing procedure developed (Pesaran et al., 2001) for cointegration analysis on six different long-run models with selected determinants of FDIs with yearly data from 1977 to 2011. Findings The intuition the paper empirically provides how improvements in democracy have a significant positive impact on FDI flows to Turkey. The results may also put forward that, in the long run, FDI inflows will have spillover effects in Turkey’s economy. Research limitations/implications Although one drawback in the study is having a small sample size of 35 observations, estimating six different long-run models is one way to overcome it. Thus presented results may be in short of simplification for some readers. This, however, opens an opportunity for future studies to further the proposal by employing in different models and/or longer data sets if possible. Practical implications A stable government policies, more civil freedom, and sustained institution politics should not be ignored in Turkey given its geopolitical location. Originality/value This paper satisfies the established need to study of democracy and FDI flows link is necessary in an emerging market such as Turkey.

scholarly journals Ethics de' Competitiveness in Finance: An Emancipative Structured Assessment and Evaluation of Indian Finance Industry

2021 ◽  
pp. 28-42
Author(s):  
Emel Siklar ◽  
Ilyas Siklar
Keyword(s):  
Money Demand ◽  
Transition Period ◽  
Cointegration Analysis ◽  
Demand Model ◽  
Demand For Money ◽  
Economic Agents ◽  
Finance Industry ◽  
Long Run ◽  
Money Holding ◽  
Macroeconomic Determinants

The details of a central bank’s monetary policy are based on assumptions about the money demand. This requires researches that aim to investigate money demand dynamics. Knowing these dynamics will support the identification of risks that may pose a threat to price stability in the long run. This study aims to analyze the changes observed in the demand for money during the last 35 years (1986-2020) in Turkey. When the analyzing period is considered as a whole in the study, it is determined that the demand for money is not stable. However, the nonlinear cointegration analysis used within the framework of soft transition models indicates that the money demand model can be divided into two different regimes with stability. In this case, it is possible to talk about the existence of a transition period in which stability is lost in the demand for money. The analyzing technique used allows the coefficients obtained for money demand to change over time according to the regime in which the economy operates. Nonlinear estimation results indicate that there is a long-term relationship between the demand for money and its macroeconomic determinants such as price level, income, interest rate, and money holding preferences of economic agents.

scholarly journals The Need to Approach the Management of the Tourist Destination by the Central and Local Public Authorities in Romania

2017 ◽  
Vol 12 (3) ◽  
pp. 141-158
Author(s):  
Virgil Nicula ◽  
Simona Spânu
Keyword(s):  
Professional Associations ◽  
Living Standards ◽  
Social Categories ◽  
Tourist Destination ◽  
Public Authorities ◽  
Economic Agents ◽  
Long Run ◽  
Anthropogenic Resources ◽  
Private Investors

Abstract In the medium and long term, priorities in the development of tourism aim to develop a complex tourist offer, making the most of the natural and anthropogenic resources existing in connection with the preservation of the environment and the heritage. On the long run, it will contribute to raising the living standards of the population, especially social categories with lower chances of reintegration into the labour market (people made redundant in industry, elderly people etc.). Implementation of the strategy at regional level must be achieved through an active partnership between Romanian public authorities, economic agents and private investors, with the involvement of the federation of employers in the sector and of the professional associations.

scholarly journals Long-run inflation expectations in the ECB survey of professional forecasters: what do the survey responses tell us?

Equilibrium ◽  
2020 ◽  
Vol 15 (4) ◽  
pp. 675-695
Author(s):  
Sami Oinonen ◽  
Matti Viren
Keyword(s):  
Value Added ◽  
Point Of View ◽  
Inflation Expectations ◽  
Survey Of Professional Forecasters ◽  
Long Run ◽  
Relevant Variables ◽  
Policy Credibility ◽  
Survey Responses ◽  
Real Returns

Research background: At the background, there are issues related to policy credibility and policy targets. For these issues, long-term forecasts can provide important information. Of course, long-term forecasts are needed also e.g. for evaluation of real returns. Purpose of the article: This paper tries to find out how informative the ECB Survey of Professional Forecasters data on long-term inflation prospects are from the point of view of the overall quality of the survey and on the other hand from the point of view of monetary policy credibility. Methods: The analysis makes use of individual forecaster level quarterly panel data for the period 1999Q1?2018Q4. Conventional panel econometrics tools are used to find out whether forecasts are sensitive to changes in actual inflation and other relevant variables. Findings & Value added: We find some weaknesses considering the size of the survey, the selection of the sample (more precisely the participation to the survey) and the inertial responses of forecasters which suggest that the survey values are not actively updated. Moreover, we find that towards the end of the sample period, the survey values are related to actual inflation and to short-term expectations, which is not consistent with the credibility of the official inflation target. 

scholarly journals Innovation and Sustainable Development: Does Aid and Political Instability Impede Innovation?

SAGE Open ◽  
2020 ◽  
Vol 10 (4) ◽  
pp. 215824402097302
Author(s):  
Muhammad Athar Nadeem ◽  
Zhiying Liu ◽  
Haji Suleman Ali ◽  
Amna Younis ◽  
Muhammad Bilal ◽  
...  
Keyword(s):  
Economic Growth ◽  
Political Instability ◽  
Political Stability ◽  
Policy Implications ◽  
Innovation Activities ◽  
Adverse Impacts ◽  
Long Run ◽  
Market Shares ◽  
Auto Regressive

Sound innovation capabilities help the nations not only to capture bigger market shares but also to sustain long-term economic growth. Innovation is of vital importance at all stages of a country’s development as it promotes productivity, value creation, employment, economic growth, and sustainability. Several factors can affect the innovation activities of a country. For example, peaceful and stable environment, effective macroeconomic designs, sound institutional quality, and efficient utilization of resources are of great significance for a country to nourish economic, business, and market activities. Applying the Auto Regressive Distributive Lag approach to cointegration, this study investigates the short- and long-run impacts of aid, political instability, and terrorism upon the innovation of a laggard economy, namely, Pakistan. Our findings reveal that aid, political instability, and terrorism all have adverse impacts on innovation. Results across robustness checks remain the same. This study is of strong policy implications for policymakers, governments and opposition parties, and security and intelligence agencies to develop sound macroeconomic designs and policies, bring harmony for political stability, and curb terrorism, respectively.

FOREIGN DIRECT INVESTMENTS AND MANUFACTURING SECTOR PERFORMANCE IN NIGERIA, (1970-2009)

2013 ◽  
Vol 03 (04) ◽  
pp. 39-56
Author(s):  
Adejumo Akintoye Victor
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Manufacturing Industry ◽  
Manufacturing Sector ◽  
Value Added ◽  
Foreign Direct Investments ◽  
Long Run ◽  
Negative Effect ◽  
Sector Performance ◽  
The Relationship

The study examined the relationship between foreign direct investment and the value added to the manufacturing industry in Nigeria, between the period 1970 and 2009. In view of the development and industrialising desires of Nigeria, as well as the foreign aid received in form of private investments, it is pertinent to examine the effect the presence of multinationals has had in shaping the Nigerian manufacturing industry. Using the autoregressive lag distribution technique to determine the relationship between foreign direct investment and manufacturing value added, it was discovered that in the long-run, foreign direct investments have had a negative effect on the manufacturing sub-sector in Nigeria.

Dış ticaret, ekonomik yardım, doğrudan yabancı yatırımlar ve göçmen dövizleri Türkiye'den olan göçü frenleyebilir mi? - Can trade, aid, foreign direct investments and remittances curb migration from Turkey?

2012 ◽  
Vol 9 (4) ◽  
pp. 311-327
Author(s):  
Sule Akkoyunlu
Keyword(s):  
Cointegration Analysis ◽  
Foreign Direct Investments ◽  
Gains From Trade ◽  
Income Differential ◽  
Long Run ◽  
Migration Flows

In this study we examine the macro-determinants of Turkish migration to Germany over the period 1969–2004 by means of cointegration analysis. We find that trade and factor flows indeed influence migration and play a role in managing Turkish migration in the short as well as in the long run. How-ever, the income differential between Turkey and Germany is the most important factor in determining migration flows and the effects of trade and factor flows on migration in the short as well as in the long run are mixed. Therefore, we argue that migration could be better managed when the dynamic gains from trade and factor flows are considered.[IN TURKISH]Bu çalışmada Türkiye'den Almanya’ya olan göçü etkileyen makro faktörleri 1969-2004 yılları için eşbütünleşme analizi ile incelemekteyiz. Dış ticaret ve fak-tör hareketlerinin göçü gerçekten etkilediğini, kısa ve uzun vadede Türkiye'den olan göçü tedvir etmekte önemli rol oynadığını bulduk. Fakat Türkiye ile Almanya arasındaki gelir farklılıklarının göçü etkileyen en önemli faktör ol-duğunu, ticaret ve faktör hareketliliğinin kısa ve uzun vade etkilerinin farklı olduğunu da bulduk. Bu nedenle göçü tedvir etmekte dış ticaret ve faktör hare-ketliliğinden kaynaklanacak olan dinamik kazancın göz önünde bulundurulması gerektiğini tartışmaktayız.

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