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This paper assesses the environment of legitimacy by determining the role of institutional quality and policy uncertainty on the performance of five major South Asian stock markets (India, Pakistan, Bangladesh, Sri Lanka, and Nepal) using 21 years data from 2000 to 2020. The focus of this study is to approach the issue of the environment of legitimacy that leads to sustained market returns.

Panel cointegration tests of Kao and Pedroni are applied, and the Dynamic Panel Vector Autoregressive (PVAR) model is used to determine the estimates.

ADF P-Values of both Kao and Pedroni tests show that the panels are cointegrated; the statistical significance of the results of the Kao and Pedroni panel cointegration test confirms cointegration among the variables. After determining the most appropriate lag, the analysis is done using PVAR. The results indicate that institutional quality, policy uncertainty, and GDP positively affect stock market return. Meanwhile, government actions and inflation negatively affect stock market returns. On the other hand, stock market return positively affects institutional quality, government action, policy uncertainty, and GDP. While stock market return negatively affects inflation.

The sample is taken only from a limited number of South Asian countries, and the period is also limited to 21 years.

Based on our research findings, we have identified several policy implications recommended to enhance and sustain the performance of stock markets.

This paper uses a unique analytical tool, which gives a better insight into the problem. The value of this work lies in its findings, which also have practical implications and theoretical significance.

The objective is to assess the relationship between financial inclusion and bank profitability in emerging economies, i.e. “Bangladesh, Egypt, Indonesia, Mexico, Nigeria, Pakistan, Philippines, and Vietnam”.

The second-generation econometrics of panel data has been applied to examine the cross-section independence and control the heterogeneity between cross sections. Additionally, the authors employ the following tests for the analysis: “the unit root test, Westerlund's (2007) bootstrap cointegration, Pedroni cointegration, fully modified ordinary least square (FMOLS), and heterogeneous panel causality techniques”. The annual data consist of the period from 2000 to 2019.

The findings reveal that financial inclusion fosters bank profitability. Therefore, easier access to financial services and products will maximize banks' profitability. Additionally, the association between financial inclusion and bank profitability is unidirectional.

This research is a first attempt to bring a novel contribution to the subject of emerging economies by investigating the association between financial inclusion and bank profitability. Another unique addition to the literature is the use of a novel financial inclusion index. At last, a panel cointegration technique, FMOLS and heterogeneous panel non-causality tests are taken into consideration for the in-depth analysis.

The purpose of this research is to systematically scrutinize the influence of macroeconomic determinants on trade openness, through the lens of various trade theories, with a particular focus on the economies of the GIPSI countries – Greece, Ireland, Portugal, Spain and Italy.

This study investigates the macroeconomic factors influencing trade openness in the GIPSI economies from 1995 to 2020. Methods include stepwise regression (SR) for model selection, Pedroni panel cointegration test and panel regression results. The analysis uses advanced panel regressions, including FMOLS, Panel OLS and FEM. The long-term dynamics were tested using Pedroni cointegration, while Granger causality testing was used to examine the causal direction between the trade openness ratio and trade determinant.

The results show both long-term and short-term relationships between trade openness and (1) foreign direct investment, (2) labor force participation rate, (3) trade reserves and (4) trade balance. The researchers also detected unidirectional and bidirectional causality relationships between trade openness and these four factors. The study also revealed that trade reserves (TR) emerge as the most influential determinant of trade openness, and per capita income does not exhibit economic significance concerning the trade openness of GIPSI economies.

This research is conducted within the context of the GIPSI nations (Greece, Ireland, Portugal, Spain and Italy). As such, the outcomes may not be universally applicable to other economic systems due to the distinct institutional settings and governance structures across different economic groups. Future investigations may explore the relationship between trade openness and its determinants by incorporating different variables.

To the best of the authors' knowledge, this is the first study investigating the theory that suggested trade drivers drive the trade openness of GIPSI countries context. By focusing on GIPSI countries, the study offers a unique perspective on the dynamics of trade openness in economies that have experienced financial crises and stringent austerity measures.

This study undertakes a comprehensive investigation into the far-reaching repercussions of Covid-19 stimulus packages and containment policies on stock returns, meticulously examining a diverse array of 14 distinct markets.

This study employed the Panel SVAR model to analyze the relationships between various policies and stock market performance during the Covid-19 outbreak. The sample comprises 5432 daily observations spanning from December 2020 to January 2022 for the 14 selected markets, with missing data excluded.

The findings reveal three consistent impacts across all 14 markets. Firstly, stock returns immediately reversed and decreased within a day when Governments tightened containment policies. Secondly, economic stimulus packages led to a fall in stock returns. Thirdly, an increasing death rate caused the stock return to decrease in the following two days. These findings are supported by the uniform impulse responses in all three shocks, including common, composite and idiosyncratic shocks. Furthermore, all inverse root tests satisfy the stability conditions, indicating the stability and reliability of Panel SVAR estimations.

One vital implication is that all government decisions and measures taken against the shock of Covid-19 must consider economic impacts to avoid unnecessary financial losses and support the effective functioning of stock markets during similar shocks. Secondly, investors should view the decline in stock returns due to Covid-19 effects as temporary, resulting from anxiety about the outbreak. The study highlights the importance of monitoring the impact of policies on financial markets and the broader economy during crises. Overall, these insights can prove helpful for investment decisions and policymaking during future crises.

This study constitutes a noteworthy addition to the literature on behavioural finance and the efficient market hypothesis, offering a meticulous analysis of the multifaceted repercussions of Covid-19 on market interactions. In particular, it unveils the magnitude, duration and intricate patterns of market volatilities linked to significant shock events, encompassing a comprehensive dataset spanning 14 distinct markets.

This study aims to investigate the interrelationships and elasticities between the production of renewable energy (RE) and three key variables: oil prices, gross domestic product (GDP) and carbon dioxide (CO₂) emissions.

The research uses panel data and time-series analyses for 10 developed and 16 emerging countries for the period 1976–2018, to identify panel and country-specific elasticity of RE production and dynamic causal relationships between these variables. The study uses an autoregressive distributed lag model to determine the long- and short-run dynamics between RE production and the three variables in each country.

Results show a long-run elasticity between RE and GDP, and short-run dynamics between RE and oil prices and CO₂ emissions in the developed countries. Whereas in the emerging countries category, there were long-run relationships between RE and GDP, CO₂ emissions and oil prices.

Results of this study are in fact crucial and can be applied in the drafting of resilience policies to tackle energy vulnerability as well as sustainable growth. The study results will inform and guide governments on the right policies to stimulate RE production in their own countries in the interests of both their national security and sustainable development globally.

This paper attempts to contribute to the literature in at least two ways. First, research on identifying common determining factors, including socioeconomic factors, in both emerging and advanced economies is considerably scarce. Most of the previous research in this field has focused only on the absolute value of RE production in a particular geographical area. Second, many studies have focused on RE consumption. This research differs from them by focusing on the production of RE. Thus, the main contribution of this study is to fill these gaps. The study also presents novel empirical evidence to determine RE production elasticity from 26 countries.

Higher economic growth accompanied by rising energy demand poses severe challenges to the long-term environmental sustainability of E7 economies, including Brazil, China, India, Indonesia, Mexico, Russia and Turkey. Thus, this paper explores the influence of foreign direct investment (FDI) inflows on energy diversification for E7 economies.

The dataset is panel data for emerging seven (E7) economies, covering the period 1992–2017. The empirical investigation relies on econometric techniques: panel cointegration test and panel autoregressive distributed lag model.

The findings reveal that energy diversification and FDI inflows are cointegrated. In the long run, higher FDI inflows encourage energy diversification, but energy efficiency improvements discourage energy diversification. In the short run, the effects of FDI inflows on energy diversification vary across E7 economies, highlighting the role of country-specific factors in determining the short-run influence of FDI inflows on energy diversification.

The findings suggested that FDI policies should encourage the adoption of nonconventional energy resources to stimulate energy diversification in E7 economies. Besides, better coordination between energy diversification and energy efficiency policies is required in the long run for a successful transition towards low-carbon economy goals.

This study is a unique empirical exercise that uncovers a cointegrating relationship between energy diversification and FDI inflows for E7 economies. Moreover, the analysis provides homogenous long-run and heterogeneous (country-specific) short-run coefficient estimates for the effect of FDI inflows on energy diversification.

This paper aims to examine the impact of information and telecommunication technologies (ICT-proxied by mobile phone subscription and Internet usage) on carbon dioxide (CO2) emissions in the Organization for Economic Cooperation and Development (OECD) countries from 1990 to 2018.

The Cross-section Autoregressive Distributed Lag (CS-ARDL) model is employed to address the potential cross-section dependence problem. Common Correlated Effects Mean Group (CCEMG) and Augmented Mean Group (AMG) estimators are used to test for robustness of results.

Results reveal contrasting effects of mobile phone subscription and Internet usage on CO2 emissions. While mobile phone penetration helps mitigate CO2 emissions, Internet usage tends to increase the emissions. Findings show that renewable energy is beneficial to the environment while economic growth is harmful to the environment. The effects of financial development and trade openness seem negligible.

This study offers practical implications for policymakers. As different proxies of ICT could have contradictory impact on CO2, governments should be cautious against utilizing ICT to mitigate CO2. Findings point to the benefits of renewable energy in alleviating CO2 emissions. Therefore, governments are strongly advised to implement policies facilitating renewable energy consumption.

Previous studies ignored the problem of cross-section dependence which could lead to biased results and cause misleading inferences. This study aims to fill this void in the literature.

In this paper, the authors investigate the inbound tourism demand elasticities of the Middle East and North African (MENA) countries. The authors emphasize the role of external and internal conflicts, world gross domestic product and relative prices over the period 1995–2017.

This study applies the heterogeneous panel data estimators based on the fully modified-OLS (FM-OLS), dynamic-OLS (DOLS) and the recently developed method of moments quantile regression (MMQR).

The empirical results indicate that the effect of external and internal conflicts on inbound tourism demand is negative and inelastic with external conflict having a stronger effect. The effect of both classifications of conflicts diminishes as the market share of the tourist destination increases. In addition, the role of the world GDP on tourism demand is positive and elastic, suggesting that tourism is a luxury good while an increase in relative prices diminishes inbound tourism demand.

The paper, therefore, concludes that if policy measures are not put in place to curtail incidences of conflicts, economic growth in these countries may suffer setbacks. This by implications could affect the attainment of the sustainable development goals (SDGs) targets.

The study's objective is to examine the relevance of globalization in affecting the size of the shadow economy in selected African nations.

To do this, the authors employ the KOF globalization index and implement both static and dynamic common correlated mean group estimators on a panel of 24 African nations from 1995–2017. This technique accommodates the issue of cross-sectional dependence, sample bias and endogenous regressors. Panel threshold analysis is also conducted to establish the nonlinearity between globalization and the shadow economy. To examine the causality between the variables, the study employs Dumitrescu and Hurlin's panel causality test.

The results show that globalization reduces the size of the shadow economy. The results of the nonlinear analysis suggest a U-shaped relationship. Overall globalization has a threshold impact of 48.837%, economic globalization has 45.615% and political globalization has 66.661% while social globalization has a threshold value of 35.744%. The results of the panel causality show that there is a bidirectional causality between the two variables.

The results suggest that the government and other relevant authorities need to introduce capital controls and other policy measures to moderate the degree of social, political and cultural diffusion. Appropriate policies should be formulated to monitor the extent of African economic openness to other continents to maximize the gains from globalization.

Apart from being the first study in the African region that evaluates the relevance of globalization in controlling the shadow economy, it also analyzes the dynamics and threshold analysis between the two variables using advanced panel econometrics which makes the study unique. The study suggests that globalization tools are useful for affecting the size of the shadow economy in Africa. This study provides fresh empirical evidence on the impact of globalization on the shadow economy in the case of Africa.

This paper aims to explore the asymmetric effect of liquidity risk (LR) and Shariah board size on bank financial stability for a panel of Islamic banks (IBs) based in Gulf Cooperation Council (GCC) and Southeast Asian countries over the 2006–2019 period.

This paper uses the asymmetric nonlinear autoregressive distributed lag (NARDL) error correction model insofar as it allows assessing not only whether IBs with large boards outperform their peers with reduced boardrooms but also unveiling the potential asymmetries between LR and stability.

The findings show that while increasing the number of the Shariah board members does not impact the financial stability of IBs in both the short and long runs its decrease appears to enhance their stability in the long run. The findings also show that a hike, as well as a fall in LR, significantly influences the stability in the long run, which underlines the role that LR plays in bank financial stability.

A prominent line of future research may consist in extending the country sample to cover more representative full-fledged IBs based on different regions, which allows the breakdown of the sample into GCC-based and non-GCC-based IBs. Doing so is interesting in terms of governance implications. Another extension would consist in considering additional sources of risk to stability.

IBs should enhance their expertise, which helps them diversify their funding strategy and cater for liquidity solutions. They also must establish a better Shariah governance framework to contain their risk-taking behavior that ultimately contributes to achieving financial stability.

This paper contributes to the empirical literature in Islamic banking by performing a model that simultaneously accounts for both short- and long-run asymmetries in the relationship between the financial stability of full-fledged IBs, the LR and the size of the Shariah supervisory board.