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In this study, the authors examine how economic freedom mediates the impact of foreign direct investment (FDI) on economic growth in Africa.

By using data from 41 countries over the period 2000–2017, the authors invoke Seo and Shin's (2016) sample splitting approach while relying on the recently developed Seo et al.'s (2019) computationally robust bootstrap algorithm to achieve the purpose of this study.

The authors find evidence of economic freedom threshold that bifurcates the link between FDI and economic growth in Africa. More precisely, FDI does not improve overall economic growth for African countries whose economic freedom index is below the estimated threshold while significantly spurring growth for African countries with economic freedom above this threshold.

African countries need to strive towards improving their level of economic freedom through the strengthening of rule of law, reducing government size, promoting regulatory efficiency and further opening of the goods and capital markets.

The association between FDI and economic growth has been well documented. While the positive theoretical postulations are almost conclusive, empirical literature on the precise effect of FDI remains contentious and far from being settled. What is missing in the existing literature in Africa is whether countries' level of economic freedom mediates how FDI explains the variations in economic growth across African countries. The authors fill this research gap.

The purpose of this paper is to examine the nexus among economic growth, nonrenewable energy consumption and renewable energy consumption in India over the period 1971-2017.

This study uses nonlinear autoregressive distributed lags model and asymmetric causality test to explore nonlinearities in the dynamic interaction among the variables.

The findings indicate that the impact of nonrenewable energy consumption and renewable energy consumption on the economic growth is asymmetric in both long run and short run. In long run, a positive shock in nonrenewable energy consumption and renewable energy consumption exerts a positive impact on growth. However, the negative shocks in nonrenewable energy consumption produce larger negative effects on the growth. The results of nonlinear causality test indicate a unidirectional causality from nonrenewable energy consumption and renewable energy consumption to economic growth and thus support “growth hypothesis” in context of India.

The findings imply that policy measures to discourage nonrenewable energy consumption may produce deflationary effects on economic growth in India. Further, the findings demonstrate the potential role of renewable energy consumption in promoting economic growth.

To the best of the authors’ knowledge, this study is the first attempt to explore nonlinearities in the relationship between economic growth and the components of energy consumption in terms of renewable and nonrenewable energy consumption.

The world is nowadays facing major environmental damage and climate change everywhere. Carbon dioxide emissions are major causes of such change. It is in this respect that the current study provides a fresh insight into the dynamic nexus between energy consumption (EC), economic growth (EG) and CO₂ emissions in Algeria, as it is considered as one of the top CO₂ emitters in Africa.

The authors use the wavelet approaches and Breitung and Candelon (2006) causality test to gauge the association between EC, EG and CO₂ emissions over the period 1971–2018. Specifically, this study implements the wavelet power spectrum (WPS) to identify the power and variability of each variable at different time scales. The wavelet coherence, phase differences and partial wavelet coherence are also used to assess the co-movement and lead lag relationship between economic growth, energy consumption and CO₂ emissions over different time scale. Finally, Breitung and Candelon (2006) causality test is used to find the causality among variables.

The wavelet power spectrum results indicate that economic growth, energy consumption and CO₂ emissions share common strong variance in the medium and long run. Furthermore, the wavelet coherence results suggest that there is a significant co-movement between EG and CO₂ emissions, and EG is the leading variable for CO₂ emissions and EC. The results also unveil that both EG and EC cause CO₂ emissions both in short and long run. The results suggest that Algeria should take suitable measures towards the promotion of renewable energy sources.

The present empirical study filled the literature gap of applying the wavelet approach and frequency domain spectral causality test to examine this relevant issue for Algeria.

This study aims to examine the effect of economic growth and the moderating impact of inflation on financial development (FD) for six South Asian Association of Regional Countries (SAARC)es during the period of 1990–2020. Besides, the inflation threshold level and FD index are also estimated.

This study uses several cross-sectional dependency tests, pooled mean group and panel fully modified least squares method. This study also makes use of principle component analysis in index construction.

The results indicate that economic growth positively impacts regions’ FD. The mediating term has a negative impact on FD when the inflation rate rises. The finding indicates after the 3.5% threshold limit, inflation changes its positive effect on FD. The constructed index is a superior measurement of FD because it controls measurement sensitivity and offers significant results.

To the best of the authors’ knowledge, this is the first empirical study in the context of SAARC to analyse the interaction effect of inflation on the growth–finance relationship. This study’s novelty is further ensured by estimating the threshold level of inflation and construction index.

This study examines the impact of institutional quality (INQ) and human capital creation (HCC) on economic growth (EG) linkage in Bangladesh using an ARDL approach.

This study uses time-series annual data over the period 1990–2019. It formulates an INQ index based on international country risk guide (ICRG) data, employs public education outlay and expenditure on health data each as a portion of real gross domestic product (GDP) to measure HCC, while an increase in real GDP is used as a proxy for EG. It employs the ARDL technique and Toda–Yamamoto (T-Y) causality check to realize the study.

The ARDL analysis divulges that the variables have a long-run association; INQ affects long-run EG positively; expenditure on health stimulates EG rate in the long run, but does not impact the latter in the short-run; whilst government spending on education impacts long-term EG rate negatively but positively in the short-term. The T-Y causality test results reveal a feedback relationship between INQ and EG, and one-way causation from health expenditure to EG rate, and education outlay to EG rate and authenticate the ARDL estimation results.

The study is original. The novelty of the study is to employ an INQ index using the ICRG data on 12 different components which are converted into a single index through principal component analysis.

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-12-2021-0732

This article employs a panel vector autoregression (PVAR) model to examine the relationship between digital financial inclusion (DFI), economic growth (EG), and gender equality (GE) across different levels of financial development.

Based on the current financial development dynamics, this study applies the PVAR method to two groups of countries: the first group represents the high financial development group, and the second group represents the low financial development group, during the period from 2015 to 2021.

The findings from impulse response functions reveal that digital financial inclusion fosters economic growth in nations with advanced financial systems, while simultaneously mitigating gender inequality. Conversely, in countries with less developed financial infrastructures, digital financial inclusion stimulates economic growth but exacerbates gender disparities. Moreover, the variance decomposition analysis indicates that the linkage between economic growth, digital financial inclusion, and gender inequality is more intertwined in countries with limited financial development than in those with well-established financial systems.

Effective deployment of new technologies relies heavily on technological infrastructure. This policy focuses on constructing and developing information technology infrastructure to create favorable conditions for the implementation of new DFI technologies. This study also emphasizes promoting equitable education and training by ensuring that both women and men have equal opportunities to access quality education and training. This may involve investing in early childhood education, providing access to primary education, and offering scholarships to women in technology, science, and engineering fields.

The purpose of this paper is to examine the linkage between Islamic financing principles and economic growth (EG) by taking into consideration two Islamic Financing Principles: Risk Sharing and non-risk sharing separately.

The data for this study are obtained from the annual reports of all Islamic banks from Bangladesh using Bank scope database and annual report for the period 1984-2014. The research uses an Autoregressive Distributive Lags (ARDL) approach. For robustness, this study also employs a continuous wavelet transform approach.

The empirical findings reveal that the risk sharing instruments are positively related to the EG of the country. On the other hand, non-risk sharing instruments are negatively related to the EG of the country.

The dominant use of non-risk sharing-based financing has undermined the greater possibility of Islamic banking to contribute more to the EG of the country. Banks and other financial institutions need to pay greater attention to systemic risk created by risk transfer and apply risk sharing methods of financing more vigorously to achieve greater equity, efficient allocation of resources, stability and growth of the financial system and welfare of the society as a whole.

This study has advanced the knowledge by examining the issue of Islamic financing principles and EG. This is probably one of the first attempts to find the linkage between Islamic financing principles and EG by taking into consideration two portfolios: risk sharing and non-risk sharing separately and provide significant insights for policy makers, market players and academicians.

It is now widely recognized that human development (HD) and economic growth (EG) are intertwined in two‐way feedback processes either leading to an upward spiral of development or a poverty trap. This concept is used to overcome one of the limitations of a previous study by Qureshi which assumes exogenous gross domestic product (GDP). With endogenous GDP formulation, the impact of public expenditure on HD and EG in Pakistan is examined.

System dynamics approach is used to model, identify and help manage the development path of HD and EG in Pakistan given alternative policies for public expenditure on HD and EG. For this purpose the model endogenously determines path of population cohorts, and education, health and economic indicators.

The simulation results suggest that the current level of public expenditure on HD is extremely low and any further decrease will have irreversible negative impact on HD and economic indicators, even if the resources so saved are effectively invested in EG. Further, higher public expenditure on EG may neither result into better HD indicators nor economic indicators. On the contrary, higher public expenditure on HD not only improves HD indicators but also supplements EG. The results of this study conform to the results of earlier research and challenge the very basis of fiscal policy in Pakistan which has continually ignored HD over decades.

The model boundary excludes possible causal links of public expenditure, HD and income distribution. Identification and inclusion of these causalities may improve understanding of perpetuating asymmetric income distribution in Pakistan its role in HD and EG trade‐off.

This paper suggests reorientation of fiscal policy in Pakistan and to anchor it to HD by allocating more public funds.

The unique characteristic of this model is explicit modelling of population cohorts in a two‐way feedback relationship with economic development considering the delays and non‐linearities involved in this process.

The purpose of this study is to analyze the dynamic causal relationship between foreign direct investment (FDI), gross domestic product (GDP) and trade openness (TO) on a set of five selected South Asian countries.

This study used newly developed bootstrap auto regressive distributed lags (ARDL) cointegration test to examine the long-run relationship among FDI, GDP and TO for selected South Asian countries for 1975–2016.

The economic growth (EG) is significantly related to TO for Bangladesh, India and Sri Lanka and the expansion of TO is crucial for growth in these countries. The results show that all countries (except Bangladesh) found the existence of long-run cointegration between FDI, GDP and TO, whereas FDI is a dependent variable. These results concluded that FDI and TO are contributing to EG in these selected countries.

This study is one of the first attempts to investigate the causal relationship and address the short and long dynamic among FDI, GDP and TO regarding five south Asian countries such as Bangladesh, India, Nepal, Pakistan and Sri Lanka.

The purpose of this paper is to analyze the long-run as well as short-run nonlinear effect of foreign direct investment (FDI), economic growth (EG) and industrialization on environmental degradation (carbon dioxide (CO₂) emissions) in Pakistan.

The study applies a nonlinear autoregressive distributive lag methodology to examine the long-run and short-run relationship among the variables. FDI, EG and industrialization are decomposed into positive and negative variations to examine the nonlinear relationship with CO₂ emissions. Granger causality test is used to examine the direction of causality among the variables. The study uses annual time-series data of Pakistan from 1975 to 2016.

An increase in FDI has a positive and significant effect on CO₂ emissions in the long run, while a decrease in FDI has a negative and insignificant effect on CO₂ emissions. An increase in EG has a positive and significant effect, while a decrease in EG has a negative and insignificant effect on CO₂ emissions in the long run. An increase in industrialization has a positive and significant effect on CO₂ emissions, while a decrease in industrialization has a negative and insignificant effect on CO₂ emissions. Unidirectional causality flows from CO₂ emissions to a positive partial sum of FDI, EG, industrialization and a negative partial sum of EG in the short run.

The government has to establish the environmental regulation for industrial sectors. Research and development centers are required at government and private levels to control pollution through new technologies. Regulations and restrictions are required on the foreign investor to adopt friendly environmental policies.

This study contributes to the existing literature by analyzing the nonlinear effects of FDI, industrialization and EG on environmental pollution in Pakistan. The main significance of this investigation is to provide the essential evidence, information and better understanding to key stakeholders of the environment.