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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 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.

This paper develops a cross-sectionally augmented distributed lag (CS-DL) approach to the estimation of long-run effects in large dynamic heterogeneous panel data models with cross-sectionally dependent errors. The asymptotic distribution of the CS-DL estimator is derived under coefficient heterogeneity in the case where the time dimension (T ) and the cross-section dimension (N ) are both large. The CS-DL approach is compared with more standard panel data estimators that are based on autoregressive distributed lag (ARDL) specifications. It is shown that unlike the ARDL-type estimator, the CS-DL estimator is robust to misspecification of dynamics and error serial correlation. The theoretical results are illustrated with small sample evidence obtained by means of Monte Carlo simulations, which suggest that the performance of the CS-DL approach is often superior to the alternative panel ARDL estimates, particularly when T is not too large and lies in the range of 30–50.

The continuous increase in the negative gap between biocapacity and ecological footprint has remained globally persistent since early 1970. The purpose of this study is to examine the effect of foreign capital, domestic capital formation, institutional quality and democracy on ecological footprint within a global panel of 101 countries from 1995 to 2017.

The empirical procedure is based on data mix. To this end, this study uses a battery of testing and estimation approaches both conventional (no cross-sectional dependence [CD]) and novel approaches (accounting for CD). Among the battery of estimation techniques used, there are the dynamic ordinary least square, the mean group, the common correlation effect mean group technique, the augmented mean group technique, the Pooled mean group and the dynamic common correlation effect technique with the desire to obtain outcomes robust to heteroskedasticity, endogeneity, cross-correlation and CD among others.

The estimated outcomes indicate that using different estimators’ domestic capital formation consistently degrades the environment through an increase in ecological footprint, while institutional quality consistently enhances the quality of the environment. Further, the outcome reveals that, though foreign capital inflow degrades the environment, the time period is essential, as it shows a short-run environmental improvement and a long-run environmental degradation. Democratic activities show a mixed outcome with short-run degrading effect and a long-run enhancement effect on environmental quality.

Green investment should be the policy target of all economies, and these policies should be adopted to target both domestic capital and foreign capital alike. Second, the adoption of democratic practices will produce good leaders that will not just design short-term policies to blindfold the populace temporary but those that will produce long-term-oriented practices that will better and enhance the quality of the environment through the reduction of the global footprint. Equally, enhancing the institutional framework like respect for the rule of law in matters of abatement should be encouraged.

Although much research on the role of macroeconomic indicators on environmental quality has been done this far, democratic practices, intuitional quality and domestic capital have been given little attention. This research fills this gap by considering robust empirical techniques.

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.

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

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.

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

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.

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.

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.

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.

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.

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.

After the adoption of unconventional monetary policies (UMPs) in advanced economies (AEs) there were many studies of monetary spillovers to asset prices in emerging market economies (EMEs) but the extent of contribution of EMEs and AEs, respectively, in real exchange rate (RER) misalignments has not been addressed. This paper addresses the gap in a cross-country panel set-up with country specific controls.

Fixed effects, pooled mean group (Pesaran et al., 1999) and common correlated effects (Pesaran, 2006) estimations are used to examine the relationship. Multiway clustering is taken into account to ensure robust statistical inferences.

Robust evidence is found for significant monetary spillovers over 1998–2017 in the form of RER overvaluation of EMEs against AEs, especially through the portfolio rebalancing channel. EME RER against the US saw significantly more overvaluation in UMP years indicating greater role of the US in monetary spillovers. However, in the long-run monetary neutrality holds. EMEs did pursue mercantilist and precautionary policies that undervalued their RERs. Precautionary undervaluation is more evident with bilateral EME US RER.

It may be useful for large EMEs to monitor the impact of foreign portfolio flows on short-run deviations in RER. Export diversification reduces EME mercantilist motives against the US. That AE monetary policy significantly appreciates EME RER has implications for future policy cooperation between EMEs and AEs.

To the best of the author's knowledge such a comparative analysis between AE and EME policy variables on RER misalignment has not been done previously.

The purpose of this paper is to empirically analyse how different exchange rate regimes affect the links between monetary fundamentals and exchange rates in Sub-Saharan Africa.

Using the Pedroni method for panel cointegration, mean group and pooled mean group and the panel vector autoregressive technique, this study empirically investigates whether monetary fundamentals impact exchange rates similarly in both regimes. Thus, the author acquires needed and credible empirical data.

The result suggests that the impact is dissimilar. In the floating regime, an increase in relative money supply and relative real output depreciates and appreciates the nominal exchange rate in the long run whereas in the non-floating regime, the evidence is mixed. Thus, exchange rates bear a theoretically consistent relationship with monetary fundamentals across SSA countries with floating regimes but fails under non-floating regimes. This provides evidence that regime choice is important if the relationship between monetary fundamentals and exchange rates in SSA are to be theoretically consistent.

This study empirically incorporates the dissimilarities in exchange rate regimes in a panel framework and study the links between exchange rates and monetary fundamentals. The focus on how exchange rate regimes might alter the equilibrium relationships between exchange rates and monetary fundamentals in SSA is a pioneering experiment.

The present paper seeks to investigate the impact of International Financial Reporting Standards (IFRS) adoption on the foreign direct investment (FDI) in the Gulf Cooperation Council (GCC) region for the period 1980–2017. This study relies on the information asymmetry theory, according to which IFRS adoption, as a positive signal for investors, should attract more FDI. This research is crucial and presents an interesting framework for providing a major motivation for empirical insights since the macroeconomic evidence on the impact of IFRS adoption on FDI is still unclear in the GCC region and no empirical evidence has been provided in the existing related literature.

The analysis was conducted based on panel data from GCC countries over the period 1980–2017 and using the autoregressive distributed lag (ARDL) modeling approach and the pooled mean group (PMG) estimation method.

The findings indicate that the decision of adopting IFRS in GCC countries has a positive impact of 3% on FDI inflows in the short run. However, the adoption of IFRS in the region leads to a decrease of 10.4 % in FDI inflows in the long run.

These findings should be of a major interest to regulators and policymakers in GCC countries, practitioners and academic researchers, international investors, managers and any other interested groups about the accounting environment in GCC countries and other developing countries having an interest in the economic consequences of IFRS adoption, as a driver of FDI, in developing countries.

This investigation provides original empirical evidence on the effect of IFRS adoption on FDI inflows within the context of the GCC area. In fact, the current international literature is lacking empirical evidence on the effect of IFRS adoption on FDI inflows for the GCC countries as a whole. Furthermore, this study offers an original methodological contribution to the macroeconomic impact of IFRS adoption literature by using the PMG estimator since there has been no research works to date that has used this method of estimation.

This study aims to examine the relationship between exchange rate risk and export at commodity level for the Indian case.

The monthly panel data used for analysis are at a disaggregated level, which cover around 100 products, encompassing all merchandize sectors for the period spanning from 2012:12 to 2017:11. To measure the exchange rate volatility, the authors use real as well as nominal exchange rate concepts and predict the volatility of exchange rate using the autoregressive conditional heteroscedastic-based model. They use pooled mean group, mean group and common correlated effects mean group estimator that is suitable for the objectives and data frequency.

The empirical analysis indicates both short- and long-term negative effects of exchange rate variations on exporting. Specifically, in the long run, real exchange rate as well as nominal exchange rate volatility has significant effects on export performance, yet, the effects of uncertainty of nominal exchange rate is much severe and intense. In the short run, it is the nominal exchange rate uncertainty that hurts exports from India. Nevertheless, the short-run effect is much lesser than the long-run, supporting the argument that the short-term exchange rate risk can be hedged, at least partially, through financial instruments; however, uncertainty of the long-term horizon cannot be hedged easily and cost-effectively.

Reducing uncertainty and attaining stability in exchange rate and price level should be an important policy objective in developing countries such as India to achieve higher export growth, both in the short and long run.

Unlike previous studies, this paper tests the relationship using micro-level data and uses advanced econometric techniques that are likely to provide more precise information regarding the association between exchange rate volatility and trade flows.

The search for more effective policies, choice of optimal implementation strategies for achieving defined policy targets (e.g., cost-containment, improved access, and quality healthcare outcomes), and selection among the metrics relevant for assessing health system policy change performance simultaneously pose continuing healthcare sector challenges for many countries of the world. Meanwhile, research on the core drivers of healthcare costs across the health systems of the many countries continues to gain increased momentum as these countries learn among themselves. Consequently, cross-country comparison studies largely focus their interests on the relationship among health expenditures (HCE), GDP, aging demographics, and technology. Using more recent 1980–2014 annual data panel on 34 OECD countries and the panel ARDL (Autoregressive Distributed Lag) framework, this study investigates the long- and short-run relationships among aggregate healthcare expenditure, income (GDP per capita or per capita GDP^_HCE), age dependency ratio, and “international co-operation patents” (for capturing the technology effects). Results from the panel ARDL approach and Granger causality tests suggest a long-run relationship among healthcare expenditure and the three major determinants. Findings from the Westerlund test with bootstrapping further corroborate the existence of a long-run relationship among healthcare expenditure and the three core determinants. Interestingly, GDP less health expenditure (GDP^_HCE) is the only short-run driver of HCE. The income elasticity estimates, falling in the 1.16–1.46 range, suggest that the behavior of aggregate healthcare in the 34 OECD countries tends toward those for luxury goods. Finally, through cross-country technology spillover effects, these OECD countries benefit significantly from international investments through technology cooperations resulting in jointly owned patents.