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Article
Publication date: 21 April 2020

Nura Sani Yahaya, Mohd Razani Mohd‐Jali and Jimoh Olajide Raji

This study examines the role of financial development and its interaction with corruption in the environmental degradation of eight Sub-Saharan African countries from 2000–2014.

Abstract

Purpose

This study examines the role of financial development and its interaction with corruption in the environmental degradation of eight Sub-Saharan African countries from 2000–2014.

Design/methodology/approach

The study utilizes Pedroni cointegration and fully modified ordinary least squares (FMOLS) techniques for the estimation of the models.

Findings

The results of the cointegration test reveal that there exist long-run relationships among the variables in the model with the interaction of financial development and corruption, and in the model without interaction. The FMOLS estimates show that in the former model, the interaction of financial development with corruption is positively significant in determining the level of environmental degradation in those countries. Moreover, in the latter, financial development, trade openness, and corruption have a positive effect on their environmental degradation

Research limitations/implications

Unavailability of data, the study was limited to only eight Sub-Saharan African nations

Practical implications

The finding that financial development and its interaction with corruption have an adverse effect on the environments of the Sub-Saharan African countries implies the need to focus on how efficient credits are being allocated in those countries. For better management of environmental quality, this may require the implementation of policies that enhance credit allocation to users with energy-efficient technology and appliances that promote the quality of environments. In addition, stringent policies could be embarked upon to curtail all acts of corruption in the region for an efficient credit allocation and a better environment in the development of Sub-Saharan African society.

Originality/value

The dearth in empirical studies on the Sub-Saharan African countries motivates this study. In particular, little is known about the interaction effect of corruption and financial development on the environmental degradation of those countries, as the work on this is limited in the existing literature.

Details

Management of Environmental Quality: An International Journal, vol. 31 no. 4
Type: Research Article
ISSN: 1477-7835

Keywords

Article
Publication date: 16 October 2020

Rana Muhammad Adeel-Farooq, Jimoh Olajide Raji and Bosede Ngozi Adeleye

The purpose of this study is to analyze the Environmental Kuznets Curve (EKC) hypothesis within the methane (CH4) emission–economic growth nexus among the six Association…

Abstract

Purpose

The purpose of this study is to analyze the Environmental Kuznets Curve (EKC) hypothesis within the methane (CH4) emission–economic growth nexus among the six Association of Southeast Asian Nations (ASEAN) countries from 1985 to 2012.

Design/methodology/approach

The study employs dynamic panel data estimation approaches such as mean group (MG) and pooled MG (PMG) techniques.

Findings

The findings reveal that the EKC hypothesis for the CH4 emission in these economies proves to be valid. In other words, economic growth causes CH4 emissions to decrease. Nevertheless, energy consumption is deteriorating the environment by enhancing CH4 emissions in these countries.

Originality/value

The ASEAN region has experienced substantial economic growth over the previous few decades. Nevertheless, pollution has also increased manifolds in this region. Methane is a more potent greenhouse gas (GHG) as compared to carbon dioxide (CO2) and a major source of socio-economic issues in the ASEAN region. This study is the first in the existing literature on the EKC hypothesis examining the role of economic growth on CH4 emissions in the selected ASEAN countries. The outcomes of this study could be really beneficial for the policymakers in this region regarding sustainability and economic development.

Details

Management of Environmental Quality: An International Journal, vol. 32 no. 2
Type: Research Article
ISSN: 1477-7835

Keywords

Article
Publication date: 11 June 2018

Jimoh Olajide Raji, Rihanat Idowu Abdulkadir and Bazeet Olayemi Badru

The purpose of this paper is to investigate the dynamic relationship between Nigeria-US exchange rate (XR) and crude oil price (OILP) using daily data from 1 January 2001…

Abstract

Purpose

The purpose of this paper is to investigate the dynamic relationship between Nigeria-US exchange rate (XR) and crude oil price (OILP) using daily data from 1 January 2001 to 31 December 2015.

Design/methodology/approach

The study uses alternative methods, including vector autoregressive-generalised autoregressive conditional heteroskedasticity (VAR-GARCH) within the framework of Baba-Engle-Kraft-Kroner model, constant conditional correlation (CCC)-GARCH and dynamic conditional correlation (DCC)-GARCH models.

Findings

The results from the VAR-GARCH model indicate unidirectional cross-market mean spillovers from oil market (OILM) to foreign exchange market (FXM). In addition, the results show a positive effect of OILP on XR, suggesting that an increase in OILP appreciates Nigerian currency relative to US dollar and a fall in OILP depreciates it. The authors find that the effects of cross-volatility spillovers between the OILM and FXM are bidirectional. The CCC results indicate positive correlations of returns of 16 per cent between the FXM and OILM. Finally, the DCCs results indicate positive correlations between the two markets since the fourth quarter of 2008 (the world financial crisis period) until the recent period of world oil glut and slow demand for crude oil.

Research limitations/implications

Following the depreciation of the Nigerian currency vis-á-vis US dollar since the onset of the recent world oil glut and lower oil prices, Nigerian authorities should embark on subsidy reform, such as reduction in fuel subsidies. This may enable the release of fiscal resources that may be used to either rebuild fiscal space lost or finance investment in non-oil sectors in order to reduce overdependence on oil income. Lower fiscal revenues, coupled with the risk that crude oil maintains its low price for some time, imply that government should reduce its expenditure, and continue to draw on available accumulated funds from the excess crude account for some time until the real depreciation required for adjustment is achieved.

Originality/value

Studies on volatility spillovers between OILM and FXM are limited in the literature, particularly in Nigerian case. Moreover, the study employs different approaches for broader analysis. These alternative methods, a clear departure from the previous studies, provide comprehensive dynamic nature of the relationship between the FXM and OILM.

Details

African Journal of Economic and Management Studies, vol. 9 no. 2
Type: Research Article
ISSN: 2040-0705

Keywords

Article
Publication date: 2 October 2017

Rana Muhammad Adeel-Farooq, Nor Aznin Abu Bakar and Jimoh Olajide Raji

The purpose of this paper is to empirically examine the effects of financial liberalization and trade openness on the economic growth of two countries, namely, Pakistan…

Abstract

Purpose

The purpose of this paper is to empirically examine the effects of financial liberalization and trade openness on the economic growth of two countries, namely, Pakistan and India for the period 1985-2014.

Design/methodology/approach

This study uses the autoregressive distributed lag technique, which allows mixed order of integration. In addition, it uses the principal component method to create an index for financial liberalization to examine how it affects the economic growth of the selected countries.

Findings

The findings reveal that in the short and long run, trade openness has positive effect on the Pakistan’s economic growth while the financial liberalization has positive impact only in the long run. In the case of India, both financial liberalization and trade openness positively and significantly influence the economic growth in the short and long run.

Practical implications

By comparing the results of both countries, trade openness and financial liberalization increase the economic growth of India more than that of Pakistan. These results suggest that Pakistan should consider appropriate positive policies regarding financial liberalization and trade openness to achieve high and stable economic growth in the future.

Originality/value

This study creates financial liberalization index by using the principal component analysis method to explain the role of financial liberalization in the economic growth of Pakistan and India. In addition, it makes comparison of the results based on which country benefits most from the liberalization of trade and financial sectors. Only very few studies have examined these countries, yet their results have remained inconclusive as well.

Details

South Asian Journal of Business Studies, vol. 6 no. 3
Type: Research Article
ISSN: 2398-628X

Keywords

Article
Publication date: 29 May 2018

Yusnidah Ibrahim and Jimoh Olajide Raji

This paper aims to examine the influence of key macroeconomic factors on the inward and outward acquisition activities of six ASEAN (ASEAN: Association of Southeast Asian…

1467

Abstract

Purpose

This paper aims to examine the influence of key macroeconomic factors on the inward and outward acquisition activities of six ASEAN (ASEAN: Association of Southeast Asian Nations) countries, namely, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, over the 1996-2015 period.

Design/methodology/approach

The study uses alternative panel data methods, including pooled mean group, mean group and dynamic fixed-effect estimators.

Findings

The results indicate that gross domestic product (GDP), interest rate, exchange rate, money supply and inflation rate are the most important macroeconomic factors explaining the trends of cross-border mergers and acquisition outflows of the ASEAN-6 countries. Specifically, GDP, money supply and inflation rate have significant positive relationships with acquisition outflows, while interest rate and exchange rate exert significant negative influence. On the other hand, the authors find four significant macroeconomic factors explaining the trends of the inward acquisitions. Essentially, GDP, money supply and inflation rate have significant positive impacts on inward acquisitions, while the impact of exchange rate is negatively significant.

Research limitations/implications

Unavailability of data limits this study to pool six sample countries from ASEAN, instead of ten representative member countries.

Practical implications

The results of this study can signal to firms or investors, involving in cross-border mergers and acquisitions, where to direct foreign resources flows. Moreover, having the knowledge about the relative levels of market size and other macroeconomic factors in both home and host countries can be of great importance for investment decision. Therefore, policymakers of ASEAN countries should make appropriate macroeconomic policies that can stimulate inward and outward acquisitions.

Originality/value

The main contribution of this paper is that it is the first to present the analysis of macroeconomic influences on the trends of inward and outward merger and acquisition activities in six ASEAN countries.

Details

Studies in Economics and Finance, vol. 35 no. 2
Type: Research Article
ISSN: 1086-7376

Keywords

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