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1 – 10 of over 1000This study aims to explore the relationship between the growth threshold effect on renewable energy consumption (REC) in the major oil-producing countries in sub-Saharan Africa…
Abstract
Purpose
This study aims to explore the relationship between the growth threshold effect on renewable energy consumption (REC) in the major oil-producing countries in sub-Saharan Africa (SSA) over the period 1990–2018.
Design/methodology/approach
This article used a dynamic panel threshold regression model introduced by Hansen (1996, 1999 and 2000) threshold (TR) models. The procedure is achieved using 5,000 bootstrapping replications and the grid search to obtain the asymptotic distribution and p-values. For the long-run relationship among our variables, the author followed the process in Pesaran et al. (1999) pooled mean group (PMG) for heterogeneous panels. Furthermore, for the robustness of our empirical results due to the sensitivity of the results to outliers, the author used the approach by Cook (1979) distance measure. The author applied quantile (QR) regression to explore the distribution of dependent variables following Bassett and Koenker (1982) and Koenker and Bassett (1978) approaches.
Findings
The results from the threshold effect test and threshold regression revealed a significant single threshold effect of growth level on REC. Furthermore, the result from the PMG estimation showed the growth of the variable, energy intensity, consumer prices and CO2 emissions play a significant role in REC in major oil-producing countries in SSA. The growth threshold estimation results indicated one significant threshold value of 1.013% at one period lagged of real growth. The outlier’s sensitivity detention greatly influenced our empirical results.
Originality/value
The article filled the literature gap by applying a combined measure that is robustness to detect outliers in the data, which none of the studies in the literature addresses hitherto. Further, the article extends the quantile regression to growth – REC literature.
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This study aims to investigate the impact of government support on the coupling coordination degree of innovation chain and capital chain in integrated circuit (IC) enterprises…
Abstract
Purpose
This study aims to investigate the impact of government support on the coupling coordination degree of innovation chain and capital chain in integrated circuit (IC) enterprises and to explore the mechanism for considering talent in the influence path.
Design/methodology/approach
This paper uses coupling coordination degree model to estimate the coupling of two chains, and applies dynamic panel system generalized method of moments (system-GMM) to analyze the impact of government support on coupling of two chains and conducts dynamic panel threshold regression to explore the threshold effect of talent in the influence of government support on coupling coordination degree.
Findings
Serious imbalance in the coupling of two chains is a major obstacle in IC enterprises. Government support significantly reduces the coupling coordination degree. The talent in IC enterprises has a significant threshold effect. When the number of talent is lower than the threshold value, government support has a negative impact. Once the number of talent reaches a certain level, government support can significantly enhance the coupling of two chains. Compared with state-owned enterprises, government support has a greater negative impact on the coupling of the two chains in non-state-owned enterprises. The former needs more talent to take advantage of government support.
Originality/value
This paper applies the concept of coupling into enterprises and deeply studies the coupling coordination degree of two chains. The influence mechanism of government support and talent on the coupling of two chains is explored, which reveals that government support cannot achieve the expected incentive effect without the support of talent. We also discuss the heterogeneous effect of government support and of talent in enterprises of different ownership types.
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Idris Abdullahi Abdulqadir and Soo Y. Chua
The purpose of this article is to investigate the asymmetric impact of exchange rate pass-through (ERPT) on employees' wages via consumer prices in 15 major oil-exporting…
Abstract
Purpose
The purpose of this article is to investigate the asymmetric impact of exchange rate pass-through (ERPT) on employees' wages via consumer prices in 15 major oil-exporting countries from sub-Saharan Africa over the period 1996-2017 using the panel threshold regression model.
Design/methodology/approach
The methodology used in this article was built on non-linear panel threshold regression models developed by Hansen (1996, 1999) threshold regression. The authors first tested for the existence of threshold-effect in ERPT and wage nexus using 1,000 bootstrap replications and 400 grid searches to obtain an optimal threshold. We also estimated that asymmetric ERPT on employees' wages reacts differently when the inflation-threshold exceeds beyond a 15.12% threshold level.
Findings
Our findings showed that asymmetric ERPT is incomplete and indicates that an increase by one standard deviation in real exchange rate causes a decline in employees' wages by 2.69%.
Research limitations/implications
The policy implications of our results are drawn from the significant threshold estimates. However, a significant threshold value of 15.12 is an inflation-threshold estimates that split our 330 observations into the lower (upper) regimes. Further, an inflation rate beyond the threshold value is likely to have an asymmetric ERPT on employees' wages in the 15 major oil-exporting sub-Saharan African (SSA) countries.
Practical implications
The practical implication of the study is when ERPT exceeds the threshold, the effect of real exchange rate variations is passed on to employees' wages. It is widely believed that labor productivity increase with increased minimum wages. Nevertheless, there is contention as regards the effects on employment and poverty. As rising goods prices make the minimum wage increased homogeneous of degree zero.
Social implications
Considerable increased ERPT on imported goods reduces employees' wages purchasing ability from import-dependent countries through import prices. Once it has documented, this also reduces welfare via deteriorations of marginal propensity to consume (MPC) and marginal propensity to savings (MPS).
Originality/value
This article integrates labor purchasing power into the analysis of ERPT using non-linear dynamic panel heterogeneous threshold regression. It extends the Hansen (1996, 1999) dynamic panel threshold models to exchange rate pass-through in SSA economies.
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Olumide Olusegun Olaoye, Ambreen Noman and Ezekiel Olamide Abanikanda
The study examines whether the growth effect of government spending is contingent on the level of institutional environment prevalent in Economic Community of West African States…
Abstract
Purpose
The study examines whether the growth effect of government spending is contingent on the level of institutional environment prevalent in Economic Community of West African States (ECOWAS).
Design/methodology/approach
The study adopts the more refined and more appropriate dynamic threshold panel by Seo and Shin (2016) and made applicable be Seo et al. (2019). The technique models a nonlinear asymmetric dynamics and cross-sectional heterogeneity simultaneously in a dynamic threshold panel data framework.
Findings
The results show that there is a threshold effect in the government spending-growth relationship. Specifically, the authors found that the impact of government spending on economic growth is positive and statistically significant only above a certain threshold level of institutional development. Below that threshold, the effect of government spending on growth is insignificant and negative at best. The findings suggest that government spending-growth nexus is contingent on the level of Institutional quality.
Originality/value
Unlike previous studies that adopt the linear interaction model which pre-impose a priori conditional restrictions, this study adopts the dynamic threshold panel framework which allows the lagged dependent variable and endogenous covariates.
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This study aims to examine the nexuses between economic growth, trade openness, renewable energy consumption and environmental degradation among organization of petroleum…
Abstract
Purpose
This study aims to examine the nexuses between economic growth, trade openness, renewable energy consumption and environmental degradation among organization of petroleum exporting countries (OPEC) members over the period 1990–2019.
Design/methodology/approach
The empirical strategy for the study includes dynamic heterogeneous panel pooled mean group (PMG), mean group (MG) estimators and dynamic panel threshold regression (TR) analysis. For clarity, PMG and MG are used to explore the long-run relationship between the variables, whereas TR is used to uncover the actionable and complementary policy thresholds in the nexuses between green growth and environmental degradation.
Findings
The empirical evidence is based on the significant estimates from PMG and TR. First, using PMG, the study finding revealed a long-run relationship between economic growth and environmental degradation via the PMG estimator. Second, using TR, the study revealed an actionable threshold for carbon dioxide emissions (CO2) metrics tons per capita (mtpc) not beyond a critical mass of 4.88mtpc, and the complementary policy threshold of 85% of the share of trade to gross domestic product, respectively.
Research limitations/implications
The policy relevance of the thresholds is apparent to policymakers in the cartel and for policy formulation. The policy implication of this study is straightforward.
Originality/value
The novelty of this study stalk in the extant literature on providing policymakers with an actionable threshold for CO2 emissions with the corresponding complementary threshold for trade policies in the nexuses between green growth and the environment.
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This chapter develops robust panel estimation in the form of trimmed mean group estimation for potentially heterogenous panel regression models. It trims outlying individuals of…
Abstract
This chapter develops robust panel estimation in the form of trimmed mean group estimation for potentially heterogenous panel regression models. It trims outlying individuals of which the sample variances of regressors are either extremely small or large. The limiting distribution of the trimmed estimator can be obtained in a similar way to the standard mean group (MG) estimator, provided the random coefficients are conditionally homoskedastic. The authors consider two trimming methods. The first one is based on the order statistic of the sample variance of each regressor. The second one is based on the Mahalanobis depth of the sample variances of regressors. The authors apply them to the MG estimation of the two-way fixed effects model with potentially heterogeneous slope parameters and to the common correlated effects regression, and the authors derive limiting distribution of each estimator. As an empirical illustration, the authors consider the effect of police on property crime rates using the US state-level panel data.
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Idris Abdullahi Abdulqadir, Soo Y. Chua and Saidatulakmal Mohd
The purpose of this paper is to investigate the optimal inflation targets for an appropriate exchange rate policy in 15 major oil exporting countries in Sub-Saharan African (SSA).
Abstract
Purpose
The purpose of this paper is to investigate the optimal inflation targets for an appropriate exchange rate policy in 15 major oil exporting countries in Sub-Saharan African (SSA).
Design/methodology/approach
Dynamic heterogeneous panel threshold techniques are used via threshold-effect test and threshold regression. This procedure is achieved through a grid search and bootstrapping replications method to stimulate the asymptotic distribution of the likelihood ratio test of the null hypothesis on no-threshold as against the alternative hypothesis. The p-values validate the threshold estimates.
Findings
Findings revealed that the optimal inflation target has a turning point and its impact on the real exchange rate is up to a threshold level of 14.47 per cent. Furthermore, the inflation rate above the threshold level overwhelmingly revealed its effect on real exchange regimes.
Research limitations/implications
It would have been a good idea to investigate optimal inflation targets for all African countries but due to inadequate data the selection criteria was narrowed to oil-exporting countries in Sub-Saharan Africa.
Practical implications
Inflation targeting beyond the threshold level would have serious implications on the monetary policy.
Originality/value
To the best of the knowledge, this is the first study to look at optimal inflation targets for 15 major oil exporting countries in general and SSA countries in particular. The findings provide a critical analysis of an inflation regime for a typical oil-producing country that oil exports being their source of revenue.
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María María Ibañez Martín, Mara Leticia Rojas and Carlos Dabús
Most empirical papers on threshold effects between debt and growth focus on developed countries or a mix of developing and developed economies, often using public debt. Evidence…
Abstract
Purpose
Most empirical papers on threshold effects between debt and growth focus on developed countries or a mix of developing and developed economies, often using public debt. Evidence for developing economies is inconclusive, as is the analysis of other threshold effects such as those probably caused by the level of relative development or the repayment capacity. The objective of this study was to examine threshold effects for developing economies, including external and total debt, and identify them in the debt-growth relation considering three determinants: debt itself, initial real Gross Domestic Product (GDP) per capita and debt to exports ratio.
Design/methodology/approach
We used a panel threshold regression model (PTRM) and a dynamic panel threshold model (DPTM) for a sample of 47 developing countries from 1970 to 2019.
Findings
We found (1) no evidence of threshold effects applying total debt as a threshold variable; (2) one critical value for external debt of 42.32% (using PTRM) and 67.11% (using DPTM), above which this factor is detrimental to growth; (3) two turning points for initial GDP as a threshold variable, where total and external debt positively affects growth at a very low initial GDP, it becomes nonsignificant between critical values, and it negatively influences growth above the second threshold; (4) one critical value for external debt to exports using PTRM and DPTM, below which external debt positively affects growth and negatively above it.
Originality/value
The outcome suggests that only poorer economies can leverage credits. The level of the threshold for the debt to exports ratio is higher than that found in previous literature, implying that the external restriction could be less relevant in recent periods. However, the threshold for the external debt-to-GDP ratio is lower compared to previous evidence.
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Thu-Ha Thi An, Shin-Hui Chen and Kuo-Chun Yeh
This study examines the role of financial development (FD) in enhancing the growth effect of foreign direct investment (FDI) in emerging and developing Asia from 1996 to 2019.
Abstract
Purpose
This study examines the role of financial development (FD) in enhancing the growth effect of foreign direct investment (FDI) in emerging and developing Asia from 1996 to 2019.
Design/methodology/approach
The study exploits the new broad-based Financial Development Index of the International Monetary Fund (IMF) and adopts panel smooth transition regression (PSTR) to perform alternative empirical models for a multidimensional analysis of the FD threshold effect in the growth–FDI nexus.
Findings
The results show two thresholds of FD mediating the nonlinear effect of FDI on growth. FD beyond a certain level will enhance the growth effect of FDI, but very high levels of FD will not induce foreign investment to benefit economic growth in emerging and developing Asian economies. The impact of financial institutions on the FDI–growth link is stronger than that of financial markets. Besides, FDI’s effect on growth has an inverted-U shape conditional on financial depth, whereas it is positively associated with the accessibility and efficiency of the financial system.
Practical implications
These results suggest policy implications for emerging and developing Asian countries, emphasizing the other side of “too much finance” and the potential for improvement in the access to and efficiency of the financial system to boost the effects of FDI and FD in the growth of these economies.
Originality/value
The study is the first multifaceted investigation into the influence of FD on the growth effect of FDI. Beyond the previous empirical evidence showing only the impact of credit from banking sector, this study shows different mediating effects of different financial sectors and three dimensions of financing (depth, access and efficiency). The study suggests essential implications for the region in adjusting long-run policies to enhance the FDI–FD–growth link.
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