scholarly journals Why So Serious about Foreign Capital?

2019 ◽  
Vol 7 (3) ◽  
pp. 47 ◽  
Author(s):  
Ashish Kumar Sedai
Keyword(s):  
Economic Growth ◽  
Causal Effect ◽  
Capital Inflows ◽  
Sub Saharan Africa ◽  
Real Effective Exchange Rate ◽  
Gdp Growth ◽  
Causality Test ◽  
Effective Exchange ◽  
Short Run ◽  
Sub Saharan

This study examines the cost and benefits of capital inflow in emerging economies and delineates equity and debt to examine the nature and trends of capital inflows in Brazil, Russia, India, China, South Africa (BRICS), East Asia and Sub-Saharan Africa since their economic reforms. We adopt a two-step process to address endogeneity and to tease out the causal effect of capital flow on economic growth and vice versa. First, we run the panel Granger causality test to examine the precedence of causality between per capita GDP growth, Foreign Direct Investment (FDI) inflows, portfolio inflows and the real effective exchange rate. We follow this test with a fixed-effect panel regression model to test for the magnitude of causality between the variables. The study finds the presence of a strong causality between FDI equity flows and a weak and lagged causality between short term capital flows and economic growth. In the short-run, there is bi-directional causality in growth and equity flows. In the longer run, the effects of equity fade away, but the effect of sustained debt kicks in. Among other results, an average currency appreciation for one-year causes equity inflow and causes GDP growth for two years.

Nutrition and economic growth in sub-Saharan Africa: a causality test using panel data

2017 ◽  
Vol 16 (2) ◽  
pp. 174-189
Author(s):  
Kolawole Ogundari ◽  
Adebayo Aromolaran
Keyword(s):  
Economic Growth ◽  
Design Methodology ◽  
Sub Saharan Africa ◽  
Dynamic Panel ◽  
Causality Test ◽  
Panel Causality ◽  
Content Type ◽  
Causality Tests ◽  
Short Run ◽  
Sub Saharan

Purpose This study aims to investigate the causal relationship between nutrition and economic growth in sub-Saharan Africa. Design/methodology/approach A dynamic panel causality test based on the Blundell-Bond’s system generalized methods-of-moment was used. To make efficient inference for the estimates, the authors check for the panel unit root and co-integration relationship amongst the variables. Findings The variables were found to be non-stationary at level, stationary after first difference and co-integrated. The results of the causality tests reveal evidence of long and short-run bidirectional causality between nutrition and economic growth, which implies that nutritional improvement is a cause and consequence of economic growth and vice versa. Originality/value This is the first study to consider causality between nutrition and economic growth in the region.

scholarly journals Does the Number of Hajj Pilgrims Boost Economic Growth in Saudi Arabia?

2021 ◽  
Vol 18 (2A) ◽  
pp. 468-488
Author(s):  
Khalid Al Atwi
Keyword(s):  
Economic Growth ◽  
Saudi Arabia ◽  
Real Effective Exchange Rate ◽  
Gdp Growth ◽  
Long Run ◽  
Causality Tests ◽  
Effective Exchange ◽  
Short Run ◽  
Effective Exchange Rate ◽  
Important Policy Implication

This paper uses the multivariate Johansen cointegration approach and Granger causality tests to study the causal relationship between the number of pilgrims and the non-oil GDP growth in Saudi Arabia over the period 1980–2016 by integrating the real effective exchange rate index as an additional variable. Our findings indicate that there is only one long-run relationship between the three variables when the non-oil GDP growth is the dependent variable. There is a unidirectional long-run causality from the number of pilgrims to non-oil GDP growth.  Besides, we find no short-run causal relationships between the three variables. Therefore, an important policy implication resulting from this study is that pilgrims can be a led growth factor to economic growth in Saudi Arabia in the long run. The pilgrimage event can, therefore, be an excellent opportunity for Saudi Arabia to boost its economic activity as stated by its 2030 vision.

scholarly journals Trade Policy and Economic Growth in Sub-Saharan Africa: A Panel Data Approach

2014 ◽  
Vol 1 (3) ◽  
pp. 95-102 ◽  
Author(s):  
Henok Arega Asfaw
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Trade Policy ◽  
Sub Saharan Africa ◽  
Real Effective Exchange Rate ◽  
Trade Policies ◽  
Data Sets ◽  
Economic Policies ◽  
Effective Exchange ◽  
Sub Saharan

Despite a number of multi-country case studies utilizing comparable analytical frameworks, numerous econometric studies using large cross-country data sets, and important theoretical advances in growth theory, there is still disagreement among economists concerning how a country's international economic policies and its rate of economic growth interact. The central objective of this paper is to empirically assess the link between trade policy and economic growth in Sub-Saharan Africa countries. Apart from reviewing different literatures, this study also provides empirical evidence on the relationship between economic growth and trade policies. In doing so, the study used a panel data covering 47 Sub-Saharan Africa countries over the periods 2000 – 2008. The estimation support claims that openness to international trade stimulates both economic growth and investment. Besides, trade policies such as average weighted tariff rate and real effective exchange rate have both direct and indirect impacts on economic growth.  

scholarly journals Implications of Governance, Natural Resources, and Security Threats on Economic Development: Evidence from Sub-Saharan Africa

2021 ◽  
Vol 18 (12) ◽  
pp. 6236
Author(s):  
Husam Rjoub ◽  
Chuka Uzoma Ifediora ◽  
Jamiu Adetola Odugbesan ◽  
Benneth Chiemelie Iloka ◽  
João Xavier Rita ◽  
...  
Keyword(s):  
Economic Development ◽  
Natural Resources ◽  
Causal Effect ◽  
Sub Saharan Africa ◽  
Security Threats ◽  
African Countries ◽  
Significance Level ◽  
Long Run ◽  
Short Run ◽  
Sub Saharan

Sub-Saharan African countries are known to be bedeviled with some challenges hindering the economic development. Meanwhile, some of these issues have not been exhaustively investigated in the context of the region. Thus, this study aimed at investigating the implications of government effectiveness, availability of natural resources, and security threats on the regions’ economic development. Yearly data, spanning from 2007 to 2020, was converted from low frequency (yearly) to high frequency (quarterly) and utilized. Data analysis was conducted using Dynamic heterogeneous panel level estimators (PMG and CS-ARDL). Findings show that while PMG estimator confirms a long-run causal effect of governance, natural resources, and security threats on economic development, only natural resources show a short-run causal effect with economic development, while the CS-ARDL (model 2) confirms the significance of all the variables both in the long and short-run. Moreover, the ECT coefficients for both models were found to be statistically significant at less than 1% significance level, which indicates that the systems return back to equilibrium in case of a shock that causes disequilibrium, and in addition, reveals a stable long-run cointegration among the variables in the model. Finally, this study suggests that the policy makers in SSA countries should place more emphasis on improving governance, managing security challenges, and effectively utilizing rents from the natural resources, as all these have severe implications for the economic development of the region if not addressed.

scholarly journals The Dynamic Relationship between Tourism and Economy: Evidence from Nepal

2018 ◽  
Vol 5 ◽  
pp. 16-22 ◽  
Author(s):  
Dipendra Karki
Keyword(s):  
Economic Growth ◽  
Real Effective Exchange Rate ◽  
Dynamic Relationship ◽  
Long Run ◽  
International Tourist ◽  
Augmented Dickey Fuller ◽  
Effective Exchange ◽  
Short Run ◽  
Effective Exchange Rate ◽  
Adf Test

The objective of this paper is to analyse the role of tourism in the Nepalese economic growth. I use a trivariate model of real Gross Domestic Product (GDP), international tourist arrivals and real effective exchange rate to investigate the long-run and short-run relationship between tourism and economic growth. The Augmented Dickey-Fuller ( ADF) test is used to determine the order of integration of the series, and I employ the Engle- Granger cointegration procedure to test for the presence of long-run relationship. By using annual macroeconomic data for Nepal for the period of 1962-2011, results reveal that there is a cointegrating relationship between tourism and economic growth.

Some dynamic macroeconomic perspectives for India’s economic growth

2020 ◽  
Vol 12 (4) ◽  
pp. 641-658
Author(s):  
Matiur Rahman ◽  
Anisul Islam
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Crude Oil ◽  
Real Effective Exchange Rate ◽  
Crude Oil Price ◽  
Content Type ◽  
Long Run ◽  
Effective Exchange ◽  
Short Run ◽  
Effective Exchange Rate

Purpose The purpose of this paper is to study impacts of changes in crude oil price, money supply, fiscal deficit and effective exchange rate on India’s economic growth (expressing all variables in real term). Design/methodology/approach First, a simple macroeconomic model is formulated to this effect. Next, linear autoregressive distributed lag procedure and vector error-correction model are applied for growth empirics. Annual data are used from 1977 through 2015. Findings Rises in real crude oil price and monetized real fiscal deficits have negative short-run and long-run effects on real economic growth. Increase in real money supply and real effective exchange rate appreciation helps promote real economic growth in both short run and long run. In all cases, there is evidence of net interactive positive feedback effects among the variables in the short run. Real effective exchange rate appreciation dampens exports, but it is helpful to imports of capital goods and crude oil that contribute to economic growth. So, the net effect on the economy may be conjecturally positive. Originality/value To the best of the authors’ knowledge, this paper is unique because of the formulation of macro-economic model pertaining to the topic and its subsequent empirical verification. Moreover, this paper seems more comprehensive than some other studies, cited in the literature review.

scholarly journals Real exchange rate behaviour and economic growth: evidence from Sierra Leone

2011 ◽  
Vol 13 (1) ◽  
pp. 8-25 ◽  
Author(s):  
Abu Tarawalie
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Sierra Leone ◽  
Real Effective Exchange Rate ◽  
Causality Test ◽  
The Real ◽  
Effective Exchange ◽  
Effective Exchange Rate ◽  
The Impact

The main focus of this paper is to examine the impact of the real effective exchange rate on economic growth in Sierra Leone. First an analytical framework is developed to identify the determinants of the real effective exchange rate. Using quarterly data and employing recent econometric techniques, the relationship between the real effective exchange rate and economic growth is then investigated. A bivariate Granger causality test was also employed as part of the methodology to examine the causal relationship between the real exchange rate and economic growth. The empirical results suggest that the real effective exchange rate correlates positively with economic growth, with a statistically significant coefficient. The results also indicate that monetary policy is relatively more effective than fiscal policy in the long run, and evidence of the real effective exchange rate causing economic growth was profound. In addition, the results showed that terms of trade, exchange rate devaluation, investment to GDP ratio and an excessive supply of domestic credit were the main determinants of the real exchange rate in Sierra Leone.

Foreign aid and economic growth in sub-Saharan Africa

2019 ◽  
Vol 11 (1) ◽  
pp. 147-168 ◽  
Author(s):  
Nihar Ranjan Jena ◽  
Narayan Sethi
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Sub Saharan Africa ◽  
Cointegration Test ◽  
Modeling Framework ◽  
Content Type ◽  
Long Run ◽  
Short Run ◽  
Sub Saharan ◽  
The Impact

Purpose The purpose of this paper is to empirically examine the effectiveness of foreign aid in improving economic growth prospects in the sub-Saharan Africa (SSA) region from 1993 to 2017. Design/methodology/approach A sample of 45 SSA countries for the period 1993–2017 is considered for this study. The study uses various econometrics tools such as Pedroni and Kao’s cointegration test, Johansen-Fisher Panel cointegration test, FMOLS and PDOLS in order to ascertain the long-run and short-run dynamics among the variables under consideration. Findings The empirical results find that long-run and short-run relationships exist among foreign aid, economic growth, investment, financial deepening, price stability and trade openness of the SSA economies. The authors also find unidirectional causality running from foreign aid to economic growth. The policymakers in these countries are well-advised to implement suitable policy measures to build on the growth momentum created by foreign aid inflows. Originality/value The study uses a dynamic macroeconomic modeling framework to assess the impact of aid flows on economic growth in the SSA region. Taking into account the diversity of level of growth experienced by the 45 countries in the region, the study uses an appropriate regression technique, i.e., panel dynamic OLS whose results are robust. The finding is also supported by the Granger-causality test and robust cointegration techniques.

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.

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