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1 – 10 of 243Barbara Deladem Mensah and Abdallah Abdul-Mumuni
While several existing panel studies have focused on the linear specifications of the effect of remittances and financial development on carbon emissions, nonlinear panel studies…
Abstract
Purpose
While several existing panel studies have focused on the linear specifications of the effect of remittances and financial development on carbon emissions, nonlinear panel studies on this subject remain thin on the ground. The purpose of this paper is to examine the asymmetric effect of remittances and financial development on carbon emissions in 31 selected sub-Saharan African countries for the period spanning from 1996 to 2018.
Design/methodology/approach
The Kao, Pedroni and Johansen–Fisher co-integration tests were conducted to ascertain a long-run relationship among the studied variables, whereas the nonlinear panel autoregressive distributed lag approach was applied to account for asymmetries.
Findings
The study revealed, among other things, that remittances and financial development asymmetrically influence carbon emissions in the selected panel of sub-Saharan African countries. In the long run, the positive shock in remittances on carbon emissions is greater than in the negative shock in remittances. Additionally, both positive and negative shocks in financial development mitigate carbon emissions.
Research limitations/implications
The implications of this study include the need to provide tax incentives to remitters and encourage them to invest in clean technologies so as to maintain sustainable development and low carbon emissions in the environment. There is also the need for governments and policymakers to formulate policies aimed at improving the functioning of the financial sectors in sub-Saharan Africa.
Originality/value
The positive and negative shocks of remittances and financial development on carbon emissions are examined to ascertain their asymmetric relationships.
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John Kwaku Amoh, Abdallah Abdul-Mumuni and Richard Amankwa Fosu
While some countries have used debt to drive economic growth, the asymmetric effect on sub-Saharan African (SSA) countries has received little attention in the empirical…
Abstract
Purpose
While some countries have used debt to drive economic growth, the asymmetric effect on sub-Saharan African (SSA) countries has received little attention in the empirical literature. This paper therefore examines the asymmetric effect of external debts on economic growth.
Design/methodology/approach
The panel nonlinear autoregressive distributed lag (NARDL) approach was employed in the study for 29 sub-Saharan African countries from 1990 to 2021. The cross-sectional dependence test was used to determine the presence of cross-sectional dependence, while the second-generation panel unit root tests was used to examine the unit-root properties.
Findings
The empirical results show that external debt has an asymmetric effect on economic growth in both the short and long run. In the long run, a positive shock in external debts of 1% triggers an upturn in economic growth by 0.216% while a negative shock triggers 0.354% decline in economic growth. This implies that the negative shock of external debts has a much stronger impact on economic growth than the positive shock. In the short run, a positive shock in external debts by 1% triggers a decline in economic growth by 0.641%, while a negative shock of 1% triggers a fall in economic growth of 0.170%.
Originality/value
The paper used the NARDL model to examine the asymmetric impact of external debt on the economic growth of SSA countries, which has not been extensively studied. It is recommended that governments in the selected countries in sub-Saharan Africa should drive economic growth by promoting domestic revenue mobilization since external debts impede economic growth.
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Abdallah Abdul-Mumuni, Barbara Deladem Mensah and Richard Amankwa Fosu
While there are enormous studies on the determinants of environmental degradation, empirical studies on the effect of renewable energy consumption and economic growth on the…
Abstract
Purpose
While there are enormous studies on the determinants of environmental degradation, empirical studies on the effect of renewable energy consumption and economic growth on the environment remain limited. The purpose of this paper is to examine the asymmetric effect of renewable energy consumption and economic growth on environmental degradation in 31 selected sub-Saharan African countries spanning from 1990 to 2018.
Design/methodology/approach
To examine possible asymmetric effects of the exogenous variables on environmental degradation, we used the panel nonlinear autoregressive distributed lag approach and secondary data was sourced from the World Bank (2021).
Findings
The cointegration test results suggest that there is a long-run cointegration among the variables whereas our main findings indicate that environmental degradation responds asymmetrically to changes in renewable energy consumption and economic growth. The results further reveal that both positive and negative shocks in renewable energy consumption reduce environmental degradation. On the other hand, positive and negative shocks in economic growth increase environmental degradation in the long run.
Research limitations/implications
The implications of this study include the need for policymakers in sub-Saharan Africa to encourage the utilization of renewable energy as it reduces environmental degradation. Also, governments in the subregion should gradually replace the usage of fossil fuels by adapting renewable energy sources so as to achieve higher economic growth.
Originality/value
The positive and negative shocks of renewable energy consumption and economic growth on environmental degradation are examined to ascertain their asymmetric relationships.
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Abdallah Abdul-Mumuni, Kwaku Amakye, Abdul-Lateef Abukari and Michael Insaidoo
While several existing panel studies have focused on the linear specifications of the nexus between trade openness and unemployment, nonlinear panel studies on this subject remain…
Abstract
Purpose
While several existing panel studies have focused on the linear specifications of the nexus between trade openness and unemployment, nonlinear panel studies on this subject remain less explored. This paper examines the asymmetric nexus between trade openness and unemployment in 34 selected sub-Saharan Africa (SSA) countries for the period spanning from 1991 to 2020.
Design/methodology/approach
The Pedroni and Westerlund panel cointegration tests were conducted to ascertain a long run relationship among the studied variables, while the panel nonlinear autoregressive distributed lag approach was applied to account for asymmetries.
Findings
The study revealed among other things that trade openness asymmetrically influences unemployment in the selected panel of SSA countries. In the long run, the positive shock in trade openness on unemployment is greater as compared to the negative shock.
Research limitations/implications
The implications of this study include the need to (1) ensure the effective monitoring and supervision of trade flows in the sub-region so that their full benefits are maximized in terms of job creation and (2) ensure that a positive trade balance is maintained in the selected SSA countries.
Originality/value
The positive and negative shocks in trade openness are examined to determine their asymmetric effects on unemployment.
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Apostolos G. Katsafados, Sotirios Nikoloutsopoulos and George N. Leledakis
Using textual analysis the authors study the relationship between social media sentiments and stock markets during the COVID-19 pandemic.
Abstract
Purpose
Using textual analysis the authors study the relationship between social media sentiments and stock markets during the COVID-19 pandemic.
Design/methodology/approach
The study analysis is based on a sample of 1,616,007 tweets over the period January to June 2021 for seven countries. The authors process the tweets via the VADER analyzer thereby producing both positive and negative sentiment measures.
Findings
Particularly, the authors prove that higher positivism is associated with a short-term increase in stock prices. On the other side, negativism relates inversely to stock prices with long-term impact, in the case of English-spoken countries. Notably, the study results remain robust to the inclusion of various control variables, including virtual fear and Google vaccine indexes. Finally, the authors prove that positivism is associated with higher returns and lower volatility in the short-run, while negativism is linked with lower returns in the short run.
Practical implications
The study analysis also has significant policy implications for researchers, investors and policymakers. First, researchers can employ our measures to quantify market sentiments and expand their research arsenal to incorporate social media trends, thus providing better explanatory power. Second, during times of severe uncertainty such as in a pandemic period, investors could beneficially take into account our textual measures and empirical results when using asset pricing models or constructing their portfolios. Third, the finding that the stock market is heavily governed by sentimental behaviors, especially during crisis periods, implies that policymakers including central banks, governments and capital market commissions must consider these sentiments before exerting their policies. In this regard, governments can effectively develop policy tools and approaches to manage recovery from the pandemic, which translates to greater long-term economic resilience. Moreover, central banks should accordingly adjust their monetary policy measures in order to stabilize financial markets, and by extension, to stop the pandemic from turning into a renewed financial crisis. For example, asset purchase program is considered the main instrument of this kind of intervention.
Originality/value
The authors confirm that this work is original and has not been published elsewhere, nor is it currently under consideration for publication elsewhere. The paper should be of interest to readers in the areas of finance.
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Naif Alsagr and Stefan van Hemmen
This paper aims to assess the asymmetric impact of corruption on financial development in BRICS economies context.
Abstract
Purpose
This paper aims to assess the asymmetric impact of corruption on financial development in BRICS economies context.
Design/methodology/approach
The authors have adopted the novel panel non-linear autoregressive distributed lag (PNARDL) model of Shin et al. (2014), covering the period 1991–2018.
Findings
The findings confirm that corruption asymmetrically impacts financial development in BRICS economies. More precisely, long-run negative shocks of the control of corruption index have significant negative impacts on financial development. However, long-run positive shocks of the control of corruption index are insignificant. Moreover, both positive and negative shocks of corruption in short-run results are insignificant. Generally, the findings are robust having carried out several robustness checks and in favor of “sand in the wheels” hypothesis.
Originality/value
This study makes a novel contribution by developing insight on how corruption asymmetrically impacts financial development. To the best of the authors’ knowledge, this is the first attempt to use the PNARDL, which decompose the main independent variable (corruption) into positive and negative shocks. The PNARDL approach is a dynamic robust estimate that controls for the problem of endogeneity, which is a common phenomenon in such studies. Additionally, it is believed that the findings are important for policy makers, scholars and practitioners. Finally, the authors used the most recent available dataset covering the BRICS context.
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Alexander Chudik, Kamiar Mohaddes, M. Hashem Pesaran and Mehdi Raissi
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…
Abstract
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 (
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Adamu Braimah Abille and Oytun Meçik
Motivated by recent rapid exchange rate depreciations, shrank economic growth, high inflation, and persistent trade deficits, this study examines the trade balance (TB) in the…
Abstract
Purpose
Motivated by recent rapid exchange rate depreciations, shrank economic growth, high inflation, and persistent trade deficits, this study examines the trade balance (TB) in the face of the recent dynamics of the stated macroeconomic factors, which are also important determinants of the TB. The symmetric test of the J-curve phenomenon for the selected Sub-Saharan African (SSA) countries is revisited in this regard. The study uses panel data from 1970 to 2020 for ten of these countries for the longitudinal panel analysis with the TB as the dependent variable and the real exchange rate, foreign and domestic national incomes, and trade openness as the set of independent variables.
Design/methodology/approach
Because the underlying data set involves a heterogeneous panel of relatively short N and long T, the pooled mean group (PMG) and mean group (MG) heterogeneous panel models are employed based on the Hausman test for parameter consistency in heterogeneous panels.
Findings
The findings largely support the domestic income growth– TB worsening and the foreign income growth– TB improvement hypotheses. Trade openness is found to mostly augment the TB performance of the countries. The results also validated the J-curve effect for only 3/10 and 2/10 countries in the PMG and MG models, respectively. The divergence for most of the countries is attributed to possible import compression and institutional structure of SSA countries.
Practical implications
Given the favorable effects of trade openness on the TB performance of SSA countries, it is recommended that SSA countries place much emphasis on import-substitution industrialization and value addition to their natural resources as well as investment-driven growth policies to improve the competitiveness of their exports and reverse the chronic deficits in their TBs.
Originality/value
This paper is unique for invoking heterogeneous panel models to analyze the TB in light of recent dynamics of its determinants, as well as providing an update on the symmetric test of the J-curve phenomenon for the selected SSA countries.
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Ismail Aliyu Danmaraya, Aminu Hassan Jakada, Suraya Mahmood, Bello Alhaji Ibrahim and Ahmad Umar Ali
The purpose of this paper is to look at the asymmetric effect of oil production on environmental degradation in OPEC member countries from 1970–2019.
Abstract
Purpose
The purpose of this paper is to look at the asymmetric effect of oil production on environmental degradation in OPEC member countries from 1970–2019.
Design/methodology/approach
The authors build a nonlinear panel ARDL–PMG model using the Shin et al. (2014) nonlinear autoregressive distributed lag (ARDL) approach in panel form to assess both the short- and long-run impact of positive and negative oil production movements on CO2 emissions.
Findings
The result demonstrates that the variables are cointegrated. According to the linear long run coefficients, oil production, FDI inflows and economic growth both have a positive and significant relationship with CO2 emissions, implying that they deteriorate environmental quality in OPEC countries, while renewable energy has a negative relationship with CO2, implying that increasing renewable energy improves environmental quality. The asymmetric findings prove that positive and negative shocks of oil production exert a positive effect on carbon emissions in short run and long run.
Research limitations/implications
To begin with, the empirical assessments do not include all OPEC member nations; researchers are advised to resolve this constraint by looking at the economies of other OPEC members. Albeit the lack of data for other energy sources may serve as another constraint of this research, future research is expected to broaden the current framework via other energy sources such as nuclear, electricity, biomass, solar as well as wind.
Originality/value
The research adds to the body of knowledge as many of the prevailing studies in the literature failed to look at the asymmetric effect of oil production on the quality of environment. This is another gap in the literature that the current study is set out to fill. This study adds oil production as an explanatory variable and helps to extend the existing literature for OPEC countries, which could propose a solution to deal with ensuing environmental issues.
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Bisharat Hussain Chang and Suresh Kumar Oad Rajput
The purpose of this paper is to examine whether macroeconomic variables have a symmetric or asymmetric effect on stock prices (SP) of Karachi Stock Exchange 100 index in the…
Abstract
Purpose
The purpose of this paper is to examine whether macroeconomic variables have a symmetric or asymmetric effect on stock prices (SP) of Karachi Stock Exchange 100 index in the context of Pakistan. It also examines whether the asymmetric impact of macroeconomic variables on SP has been affected by tail events such as the global financial crisis.
Design/methodology/approach
This study uses linear and nonlinear autoregressive distributed lag models for the full sample period as well as in pre- and post-crisis periods. The whole sample period covers the data from June 2004 to June 2016 which include 145 observations in total. The pre-crisis period covers data from June 2004 to December 2007 and the post-crisis period covers the data from January 2009 to June 2016 where these periods include 43 and 90 observations, respectively.
Findings
The findings suggest that the relationship between macroeconomic variables and SP is asymmetric in the short run whereas this effect is symmetric in the long run when the whole sample period is selected. However, when pre- and post-crisis periods are selected this effect becomes asymmetric in the long run as well; that is, positive and negative shocks in macroeconomic variables do not affect the SP in the same way.
Practical implications
Investors, governments and other stakeholders are advised to consider the asymmetric behavior of macroeconomic variables and SP while making an investment or other decisions. They may consider the financial crisis as well since the asymmetric behavior of the underlying variables change as a result of the financial crisis.
Originality/value
This study extends previous studies by examining the asymmetric effect of macroeconomic variables and also contributes to the existing literature by discussing how this relationship changes as a result of the financial crisis.
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