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This study examines the impact of trade openness, human capital, public expenditure and institutional performance on unemployment in various income groups of Organization of Islamic Cooperation (OIC) countries.

Traditional panel data methodologies neglect the issue of cross-sectional dependence and provide ambiguous outcomes. A novel approach, “dynamic common correlated effects (DCCE)”, is utilized in this study to tackle with aforementioned issue. Pooled mean group (PMG) estimation is also applied to verify the robustness of the findings.

The long-run estimates show that trade openness has a significant and negative relationship with the unemployment rate in overall and lower-income OIC economies and a positive correlation with unemployment in higher-income OIC countries. Public expenditure is negatively and significantly correlated with unemployment in higher-income and overall OIC economies. Moreover, human capital reduces unemployment in higher-income and overall OIC countries while increases unemployment in lower-income OIC economies.

The research tends to endorse the argument for continuous trade openness policy along with efficient use of public expenditure and improved institutional performance to reduce unemployment in OIC countries.

The DCCE approach in this research considers heterogeneity and cross-sectional dependence between cross-sectional units and thus gives robust outcomes.

The Organization for Economic Cooperation and Development (OECD) countries are facing unprecedented challenges related to climate change and population aging. The purpose of the analysis is to explore the relationship between population aging and environmental degradation, accounting for human capital, using a sample of 19 OECD countries over the period 1980–2019.

On the empirical methodology, the analysis uses panel estimators with heterogenous coefficients and an error structure that takes into consideration cross-country heterogeneity and cross-sectional dependence for a panel of 19 OECD countries over the period 1980–2019. To examine the relationship between population aging and environmental degradation, the authors employ two alternative measures of environmental degradation that is energy consumption and CO2 emissions in metric tons per capita. Concerning the regressors, the authors account for two alternative aging indicators, namely the elderly population and the old-age dependency ratios to confirm robustness.

The analysis provides evidence that population aging and human capital development (IHC) lead to lower energy consumption in the OECD sample. Overall, the growing number of elderly people in the OECD seems to act as a mitigating factor for energy consumption. The authors view these results as conveying the message that the evolution of population aging along with channeling government expenditures towards human capital enhancement are important drivers of curbing energy consumption and ensuring environmental sustainability. The authors' research is of great significance for environmental policymakers by illuminating the favorable energy consumption patterns that population aging brings to advanced economies.

The main limitation of this study concerns data availability. Future research, and subject to greater data availability in the future, could dig deeper into understanding the dynamics of this complex nexus by incorporating additional control variables. Similarly, the authors focus on aggregate renewable energy consumption, and the authors do not explicitly model the sources of renewable energy (wind, hydropower, solar power, solid biofuels and other). Additional analysis of the breakdown of renewable energy sources would be insightful – subject to data availability – especially for meeting the recently agreed new target of 42.5% for European Union (EU) countries by 2030. A deep transformation of the European energy system is needed for the EU to meet the target. Finally, extending the model to include a range of non-OECD countries that are also experiencing demographic transformations is a promising avenue for future research.

To the best of the authors' knowledge, this study is the first to examine the effects of population aging and human capital on environmental degradation using a broad set of OECD countries and advanced spectrum estimation methods. Given cross-sectional dependencies and cross-country heterogeneity, the authors' empirical results underline the importance of cross-OECD policy spillovers and knowledge diffusions across the OECD countries. The new “energy culture” calls for concerted policy action even in an aging era.

The purpose of this paper is to find the effects of human capital inequality on economic growth.

Thailand Labor Force Survey has been used to generate provincial average years of schooling and Gini coefficient of years of schooling for the years 1995‒2012. Econometric techniques have been employed to identify the effects of human capital inequality on economic growth.

Economic growth is inversely affected by the distribution of human capital in Thailand. The coefficient of human capital inequality suggests that if Gini coefficient increases by 0.01 points, gross provincial product (GPP) decreases by about 2 percentage points in the long run. However, the effect of average years of schooling in GPP is not significant.

There is a lack of strong theoretical background for the relationship between human capital inequality and economic growth to support the empirical study.

The findings of the study help to design and evaluate education policies in developing countries like Thailand and other low- and middle-income countries.

This paper is among the first attempts to analyze the effect of human capital inequality on economic growth with sub-national level annual data. In addition, it considers cross sectional dependence in panel model.

Considering the inherent relationship between environmental degradation and the process of economic development, the latter is particularly reliant on the accumulation of human capital, which also emerges as one of the fundamental principles underlying green growth. However, this relationship tends to overlook varying levels of human capital. Hence, the purpose of this study is to examine the enduring associations between the stock of high human capital and green economies in terms of environmental sustainability among the key countries in the Asia Pacific region, namely Australia, Japan, Singapore, and South Korea, spanning the period from 1990 to 2022.

This paper employs second-generation techniques. The long-term relationships were estimated using two constantly updated models - fully modified and bias corrected, CUP-FM and CUP-BC, respectively, to guarantee the robustness of our conclusions for the presence of cross-sectional dependency.

There is a long-term relationship between the stock of high human capital and the sustainability of the environment, in the same way that we have also found the same relationship between the development of socioeconomic practices of green economies. Finally, we conclude that, in the same way as the environmental Kuznets curve, the countries in our sample incur less environmental pollution as their level of income increases. This relationship may be motivated by a process of technological substitution and investment in the development of new techniques and technology to improve the efficiency of productivity with respect to the environment.

We suggest that investing in education and promoting green economies can be powerful tools in the fight against climate change and promoting environmental sustainability. By prioritizing investments in renewable energy and sustainable technologies, policymakers can promote long-term economic and environmental health. Moreover, the findings suggest that promoting education in countries with high levels of environmental pollution can develop the knowledge and skills needed to implement sustainable practices and technologies. Ultimately, these efforts can contribute to improving income, productivity, and society's living conditions while reducing the environmental impact.

This research studies for the first time the load capacity curve hypothesis in determining the effects of the stock of high human capital and green economies on the environment. Consequently, limited papers have used the load capacity factor in the study of the relationships that we propose, especially that of human capital, which has scarcely been studied in relation to its contribution to the environmental fight.

The purpose of this paper is to examine the relationship between the quality of different dimensions of institutional and economic growth in a panel of 15 member ECOWAS.

The study adopts Driscoll and Kraay′s nonparametric covariance matrix estimator, and the spatial error model to account for cross-section dependency, cross-country heterogeneity and spatial dependence inherent in empirical modelling, which has largely been ignored in previous studies. This is because, the likelihood that corruption and human capital cluster in space is very high because factors that affect these phenomena disperse across borders. Similarly, to test the threshold effect, the study adopts the more refined and more appropriate dynamic panel data which models a nonlinear asymmetric dynamics and cross-sectional heterogeneity, simultaneously, in a dynamic threshold panel data framework.

The empirical evidence supports findings by previous researchers that better-quality political and economic institutions can have positive effects on economic growth. Similarly, our results support a nonlinear relationship between political institutions and economic institution, confirming the “hierarchy of institution hypothesis” in ECOWAS. Specifically, the findings show that economic institutions will only have the desired economic outcome in ECOWAS, only when political institution is above a certain threshold.

Unlike previous studies which assume cross-sectional and spatial independence, the authors account for cross-section dependency and cross-country heterogeneity inherent in empirical modelling.

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-10-2019-0630

Development has been a long-age phenomenon from the millennium to sustainability. This is because the new millennium ushered in the episode of development in the global economy from the role of inputs to the role of productivity and knowledge. Thus, understanding the forefront of initiatives to develop better policies for better lives and to find fact-based answers to social, economic, and environmental problems becomes unavoidable.

The study therefore assesses the impact of labor productivity and investment decisions on human development. A modified production theory was adopted for OECD economies. To address the problem of endogeneity and cross-sectional dependence, a two-step system generalized method of moments, Driscoll–Kraay estimator, and Panel Corrected Standard Error were used.

The findings reveal that the impact of labor productivity on human development differs significantly from the impact of investment decisions. The result shows that investment decisions will have a positive impact on human development when there is an insignificant capital fixed formation to boost the productivity of OECD economies. Further, the result shows that the organization governments through the provision of social security and essential services have a positive impact on the OECD human development.

This study has contributed significantly to assessing the drivers of human development within the purview of labor productivity, investment decisions and government expenditure in OECD countries.

This study aims to assess the impact of foreign direct investment (FDI) on growth in presence of host country characteristics, namely, economic stability, human capital, financial development and trade openness, in the fastest emerging Brazil, Russia, India, China, South Africa (BRICS) economies, considered to be significant FDI destinations.

The panel data for the variables under study, collected from World Investment Reports published by World Bank, are analyzed using feasible generalized least squares method to examine the relationship between the dependent and explanatory variables over the period 1987–2018. The interaction effect has been studied to examine the growth impact of FDI in presence of host country characteristics.

The findings revealed that FDI does not exert a significant impact on the economic growth of BRICS individually but has a significant growth impact only in presence of host country characteristics. FDI on interacting with financial development, trade openness and human capital exerts a positive impact on the economic growth of BRICS economies, and on interacting with economic instability (inflation), FDI has a negative impact on growth.

The study has implications for policy makers of BRICS countries who are suggested to work toward the development of financial markets, trade liberalization and human capital development to realize the positive growth impact of FDI.

Very few studies have been conducted to examine the growth effect of FDI in BRICS economies, which are considered to be the fastest-growing economies and dominant players in the global investment landscape. Assessing the interaction of FDI with absorptive capacities/host country characteristics to study its growth impact in BRICS using long data and robust panel data methodology is an original contribution of this paper toward the existing body of knowledge.

This chapter advances a panel vector autoregressive/vector error correction model (PVAR/PVECM) framework for purposes of examining the sources and determinants of cross-country variations in macroeconomic performance using large cross-country data sets. Besides capturing the simultaneity of the potential determinants of cross-country variations in macroeconomic performance and carefully separating short- from long-run dynamics, the PVAR/PVECM framework advanced allows to capture a variety of other features typically present in cross-country macroeconomic data, including model heterogeneity and cross-sectional dependence. We use the PVAR/PVECM framework we advance to reexamine the dynamic interrelation between investment in physical capital and output growth. The empirical findings for an unbalanced panel of 90 countries over the time period from at most 1950 to 2000 suggest for most regions of the world surprisingly strong support for a long-run relationship between output and investment in physical capital that is in line with neoclassical growth theory. At the same time, the notion that there would be even a long-run (let alone short-run) causal relation between investment in physical capital and output (or vice versa) is strongly refuted. However, the size of the feedback from output growth to investment growth is estimated to strongly dominate the size of the feedback from investment growth to output growth.

Financial inclusion is a critical component of financial development, which disseminates accessible financial services to benefit all parts of society and consequently promotes economic growth. The study explores the dynamic common correlated effects of financial inclusion on economic growth in Organization of Islamic Cooperation (OIC) countries.

The conventional econometric techniques overlook heterogeneity and cross-sectional dependence and provide false results. Hence, a unique methodology, ‘Dynamic Common Correlated Effects (DCCE)’, is used, which can efficiently tackle the above-mentioned issues.

The DCCE estimation indicates a positive and significant impact of financial inclusion on economic growth in overall and higher-income OIC economies. Moreover, in the lower-income OIC group, financial inclusion is inversely correlated with economic growth, which converts into a positive linkage by including an interaction term of financial inclusion and institutional quality.

Based on the research outcomes, it is recommended that policymakers and governments of OIC economies seek to increase financial inclusion to achieve sustainable, optimal and inclusive economic growth.

The DCCE technique in this study considers heterogeneity and cross-sectional dependence among countries and thus provides robust findings.

The study examined the impact of financial development, foreign direct investment, market size and trade openness on domestic investment for 119 countries divided into four panels that are low-income countries (LIC), lower middle-income countries (LMIC), upper middle-income countries (UMIC) and high-income countries (HIC) between 1995 and 2019.

The present study bases its empirical procedure on the bases of the data mix. To this end, based on the presence of cross-sectional dependence, covariate-augmented Dickey–Fuller unit root and Westerlund cointegration second-generation tests were employed to validate the stationarity and cointegration of the variables, respectively. The novel Dynamic Common Correlation Effects estimator was employed to estimate the heterogeneous parameters while the Dumitrescu and Hurlin test was used to test for causality direction of the highlighted variables.

The empirical results show that market size and trade openness had a positive and statistically significant effect on domestic investment for all the income groups. Results also show that financial development had a positive and statically significant effect on domestic investment only for LMIC and HIC economies, while a positive and statistically insignificant effect was obtained for LIC, UMIC and the global panel. The causality results revealed a bidirectional relationship between domestic investment and the exogenous variables – financial development, foreign direct investment, market size and trade openness.

It is therefore, recommended that LIC and LMIC need to consider harmonising the financial system to lower credit limitations and adopt business-friendly policies. HIC and UMIC should seek more outward FDI policies and harmonise their trade policy, to reap more benefits from FDI and international trade.

On novelty, previous studies have been criticised for the effect on technical innovation of bank financing and institutional quality. This research tackles the deficiency using systematic institutional quality indicators and by taking other variables into account.