Export and economic growth: Further time series evidence from less-developed countries

The purpose of this paper is to examine the role of export-growth linkage in India, Pakistan, the Philippines, Malaysia, and Thailand on the basis of time series data from 1973 to 1993. The empirical results indicate that exports have a positive and significant impact on economic growth when a country has achieved some level of economic development. The result also signifies the importance of liberal market policies by pursuing export expansion strategies and by attracting foreign investments.     

Capital flows and economic growth revisited: evidence from five Sub-Saharan African countries

The study examines the differential effects of capital flows on economic growth in five Sub-Saharan African (SSA) countries over the period 1970–2014. Using the autoregressive distributed lag methodology, the findings show that in the long-run capital flows (i.e. foreign direct investment (FDI), aid, external debt, and remittances) have different effects on economic growth. FDI has a significant positive effect in Burkina Faso and negative effects in Gabon and Niger whereas the impact of debt is negative in all countries. Aid, however, promotes growth in Niger and Gabon whiles it deters growth in Ghana. Remittances, on the other hand, have a significant positive effect in Senegal. Finally, gross capital formation is significant in most of the countries and the impact of trade is mixed. These results suggest that the benefits of capital flows in SSA have been overemphasized.     

The relation between capital formation and economic growth: evidence from sub-Saharan African countries

This paper examines the causal relationship between capital formation and economic growth in Sub-Saharan African countries using recent panel cointegration and causality testing techniques. We find that causality is bi-directional, suggesting that higher economic growth leads to higher capital formation and that in turn, increases in capital formation results in higher economic growth. These results hold irrespective of whether capital formation is measured with private fixed capital formation or by gross capital formation.     

Financial development and economic growth nexus: a time-series evidence from India

This study examines the relationship between financial development and economic growth in India for the period 1951–52 to 1995–96. The long-run equilibrium and short-run dynamic models are estimated using financial interrelations ratio and new issue ratio as the measures of financial development, a la Goldsmith (1969 Goldsmith, RW. 1969. Financial Structure and Development, New Haven: Yale University Press.  [Google Scholar]). The Johansen (1991 Johansen, S. 1991. Estimation and hypothesis testing of cointegration vectors in Gaussian vector autoregressive models’. Econometrica, 59: 1551–80. [Crossref], [Web of Science ®] , [Google Scholar]) estimator rejects the null of zero cointegrating vector and shows the presence of long-run equilibrium relationship between financial development and economic growth. The error correction model, impulse response and variance decomposition analyses (Sims, 1980 Sims, CA. 1980. Macroeconomics and reality. Econometrica, 48: 1–48. [Crossref], [Web of Science ®] , [Google Scholar]), and the Toda and Yamamoto (1995 Toda, HY and Yamamoto, T. 1995. Statistical inference in vector autoregressions with possibly integrated processes. Journal of Econometrics, 66: 225–50. [Crossref], [Web of Science ®] , [Google Scholar]) estimator show the presence of bidirectional Granger-causality between financial development and economic growth. The presence of bidirectional Granger-causality suggested by these estimators points towards the possible problem of endogeneity and simultaneity bias in the growth models that examine the contemporaneous effect of financial development on economic growth. The economic reforms that started since July 1991 emphasized on the liberalization and development of financial sector to supplement the efforts aimed at achieving high economic growth in India.     

Export revenue and quality: Firm‐level evidence from developing countries

I combine firm‐level export data from eight low‐income and middle‐income countries to test the relation between export price and export revenue. Across‐firm estimations show a strong positive association between export price and export revenue. Within‐firm estimations show that firms generate larger export revenue from their high‐price products. The positive correlation between export price and export revenue is strong for manufactures, weak for primary commodities, and nonexistent for extractables. Results are robust to using an alternative quality measure and controlling for exporters’ market power.     

Violent conflict and economic growth: Some time-series evidence

This paper uses time-series methods to examine interrelationships between growth and violent conflict in Sub-Saharan Africa. Results show bidirectional causalities, but the key determinant of conflict risk is prior conflict experience, not fluctuations in economic growth.     

Economic growth and carbon emissions: evidence from CIVETS countries

ABSTRACT

This paper examines whether a long-run relationship exists between CO₂ emissions and selected variables: real gross domestic product per capita, inward stock of foreign direct investments, gross fixed capital formation, industry, value added and energy use per capita for Colombia, Indonesia, Viet Nam, Egypt, Turkey and South Africa countries in the period of 1989–2016. We used panel unit root testing, followed by panel cointegration tests and panel causality. The results clearly prove the existence of a bidirectional long-run causal relationship between all the variables except between CO₂ emissions and GDP and CO₂ emissions and GFCF. Major finding of the short-run causality analysis is that CO₂ emission in the short run does not result in changes of other variables. On the other hand, all variables except foreign direct investments (FDI) cause the changes in the CO₂ emissions, and there is a positive bidirectional causal relationship between GDP and FDI, between GFCF and FDI, and between GFCF and IVA. Finally, positive unidirectional causal relationship also exists, running from GDP to IVA, GDP to ENUSE, IVA to FDI and ENUSE to FDI.     

Export growth performance of less-developed countries

This paper has two purposes: (1) to estimate own-price, cross-price, and income elasticities of export demand for a sample of 41 LDCs; and (2) to test whether relative export growth performance of LDCs can be explained in terms of differing values of these elasticities. The study finds that, in conformance with the theory specified, export growth is enhanced by a smaller ownprice elasticity, a larger cross-price elasticity, and a larger income elasticity.     

Foreign education and international trade: empirical evidence from selected Latin American countries

Social ties among university students – of friendship, mutual trust and attachment to the alma mater – tend to be robust and enduring. Through information-diffusion and behaviour-enforcement mechanisms, they can boost the economic exchanges between countries. This paper tests the influence of Latin American people with a tertiary education in OECD countries on the bilateral trade between the home economy and the country of the alma mater, taking into account potential endogeneity concerns. Results show that Latin American student networks exert strong, positive and significant effects on bilateral imports and exports. A 10% increase in the number of Latin American students in the OECD economy boost bilateral trade by about 3%. At a more disaggregated level, their impact on differentiated goods is significantly higher than on homogenous products. Their incidence is lower in the presence of bilateral trade agreements and economic integration between countries. Results are robust to the deep economic and political transformations of the period considered, and to the use of different regressors and specifications.     

Response of inflation to shocks: New evidence from Sub-Saharan African countries

In this paper, we investigate whether or not the inflation rate of 17 Sub-Saharan African countries can be modelled as a stationary process. We achieve this goal through using univariate and panel stationarity tests for data over the period 1966 to 2002. We use the Kwiatkowski, Phillips, Schmidt and Shin (KPSS, 1992) univariate test and allow for multiple structural breaks. We find that except for Burkina Faso, Burundi and Gambia, the inflation rate is stationary for the rest of the 14 countries. We then apply the panel version of the KPSS test, developed by Carrion-i-Silvestre et al. (2005), which accounts for multiple structural breaks. We find strong evidence of panel stationarity of the inflation rate. However, for a panel consisting of Burkina Faso, Burundi and Gambia, we could not find evidence that the inflation rate is stationary.     

A structural analysis of external debt and economic growth: some evidence from selected countries in Asia and the Pacific

In an attempt to resolve the existing controversy about the cause and effect relationship between external dept and economic slowdown, Granger causality tests are conducted with data on indebted developing countries of Asia and Pacific. The results of these tests indicate that the Bulow–Rogoff proposition that the external debts of developing countries are a symptom rather than a cause of economic slowdown is rejected. They also indicate that the Dornbush–Krugman proposition that external dept leads to economic slowdown is also rejected. Moreover, a feedback-type relationship is not rejected for two countries. In view of the mixed results, this paper also estimates the nexus of inter-relationship between public and private external dept accumulation, capital accumulation and production within a simultaneous equation system. The estimation results indicate that the full effects of the public and private external depts on GNP are small and of an opposite sign, whereas an increase in the GNP level raises substantially the public and private external depts. These findings support Bulow–Rogoff's proposition that the external debts of developing countries are not a primary cause of economic slowdown.     

Government expenditure and economic growth: evidence from G7 countries

This paper examines Wagner's Law of Public Expenditure, which emphasizes economic growth as the fundamental determinant of public sector growth, using time series data drawn from the G7 industrialized countries over the sample period 1960 1993. It presents evidence on both the short- and long-run effects of growth in national income on government expenditure by resorting to recent developments in the theory of cointegrated processes. An attempt is also made in this study to examine if Wagner's Law holds between certain key components of government expenditure and income.     

The size and growth of banks: evidence from four European countries

This paper tests for mimicry in local tax setting, by using a panel data set of the English non-metropolitan districts in the 1980s — when property tax rate variability across districts was highest. The results confirm the presence of large and significant spatial interactions among districts. Even after allowing for district-specific and time effects, a district appears to be significantly affected by its neighbours' policies. A 10% increase in the local property tax rate of a district's neighbours leads to an increase of 4–5% in its own property tax rate. On the other hand, the absence of correlation in tax rates between lower tier (district) authorities and upper tier (county) authorities suggests that the spatial pattern in district tax rates is not simply driven by spatially auto-correlated shocks.     

Export expansion and economic growth: Further empirical evidence

This paper examines the relationship between export expansion and economic growth in a sample of seventy-three developing countries, using data for the period 1960–1978. It shows that in both groups of low- and middle-income countries, export expansion is associated with better economic performance and that an important cause of this association is the favorable impact of exports on total factor productivity. The paper also demonstrates that the effect of commodity composition of exports on the relationship between export expansion and economic growth is substantial in more advanced developing economies.     

Economic growth and urbanization: A cross-section and time-series analysis of thirty-five developing countries

In this paper, we discuss the influence of urbanization and urban primacy on the economic growth rates of developing nations. Included in the paper is preliminary evidence, from cross-section and time-series analyses, that while urbanization is an inevitable product of economic development, the process of urbanization is best achieved when the urbanization is managed and gradual. Time-series and cross-section analyses indicate a negative relationship between urbanization and urban primacy and economic growth. However, further cross-section analysis shows that all industrialized economies are highly-urbanized. The dichotomy is explained in that urbanization is inevitable with economic growth, but the pace and character of urbanization also matters. We present a basic model that predicts the economic growth rates of developing nations. The tests performed could only follow the general tone of the model because of the limitations of the data sources. (JEL: O10, O18, O40)     

Export and import composition as determinants of bilateral trade in goods: evidence from Russia

Conventional theory and several empirical studies state that incomes and exchange rates are the key determinants of the trade balance. Here, we argue that export and import composition are also key explanatory variables because some goods are inelastic and/or with a high added value, directly and indirectly affecting income and price elasticities and trade balance. Thus, if exports and/or imports significantly consist of price inelastic products, then, a positive and a negative effect, respectively, should be expected on the trade balance. Using bilateral trade data and dynamic panel models, we found that the ratio of exports of crude petroleum and natural gas (price inelastic goods) to total exports is significantly and positively associated with the Russian trade balance in goods. For its part, Russian imports of high-tech goods (income elastic and price inelastic with a high added value) show a negative association. The goods balance of Russia also responded to changes in relative income, but there is only weak evidence of reactions to changes in the exchange rate. These findings partially explain the persistent surplus in the Russian trade balance and current account.     

Causal interactions among tourism,foreign direct investment,domestic credits,and economic growth: evidence from selected Mediterranean countries

Portuguese Economic Journal - This study explores the nexus between tourism and economic growth in countries bordering the Mediterranean Sea while controlling for foreign direct investment and...     

The impact of public employment on labour market performance: evidence from African countries

Using census data for Ghana, Mali and Mozambique, we study the long-term impact of public sector employment on local labour markets. We find that the public sector crowds out private employment and induces skilled workers to queue for a public job, thus increasing their unemployment rate. In addition, a growing public sector fosters employment in the tradable and nontradable sectors, remarkably for the unskilled, and the reallocation of unskilled workers away from agriculture.     

Prospect theory for stock markets: Empirical evidence with time-series data

Based on the loss aversion model of asset pricing, this paper explores empirical evidence on the prospect theory for stock markets with time-series data. The analysis, using a state-space model, shows that previous gains and losses may have asymmetric effects on investment behavior, pointing to the possibility of break-even effects ignored by asset-pricing models using prospect theory.     

Unit root and trend breaks in per capita output: evidence from sub-Saharan African countries

This article examines the nonstationary properties of per capita real output in 28 sub-Saharan African (SSA) countries, covering the period 1960–2014. The sequential testing approach proposed by Kejriwal and Lopez (2013, Econometric Reviews 32(8), 892–927) is used to categorize SSA countries into growth shift, level shift and linear trend hypotheses based on the presence or not of breaks in slope and/or level of the trend function. The break dates are associated to major historical or economic events such as sociopolitical crisis, commodity price fluctuations on international market, the discovery and the exploitation of mineral deposits or unfavourable environmental and climatic conditions. The empirical evidences of appropriate unit root tests fail to reject the unit root hypothesis in all the countries, suggesting that a shock would have a permanent effect on growth process, and stabilization policies may be implemented in dealing with income fluctuations.