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Book part
Publication date: 26 November 2019

Dipyaman Pal, Chandrima Chakraborty and Arpita Ghose

The present study aims to determine the existence of simultaneous relationship between economic growth, income inequality, fiscal policy, and total trade of the 13…

Abstract

The present study aims to determine the existence of simultaneous relationship between economic growth, income inequality, fiscal policy, and total trade of the 13 emerging market economies as a group for the period 1980–2010. After establishing the existence of simultaneity between the above relationships, a simultaneous panel model has been formulated and estimated incorporating the nonlinearity among the variables as suggested by the existing literature. An inverted U-shape relationship is evident between (1) economic growth, income inequality, and total trade in economic growth equation, (2) income inequality, economic growth, and per capita income in income inequality equation, and (3) total trade and economic growth in total trade equation. Thus, the existence of a two-way nonlinear relationship is highlighted between economic growth, income inequality, and total trade. Apart from these nonlinear relationships, positive and significant effect of (1) gross capital formation, inflation, population growth, human capital, fiscal policy, monetary policy, and domestic credit to private sector on economic growth; (2) civil liabilities on income inequality; (3) gross capital formation and inflation on total trade; (4) total trade, population growth of those aged 65 years and above, political system on fiscal policy is highlighted. Also, negative and significant effect of (1) fiscal policy on income inequality and (2) income inequality on fiscal policy is revealed.

Details

The Gains and Pains of Financial Integration and Trade Liberalization
Type: Book
ISBN: 978-1-83867-004-7

Keywords

Book part
Publication date: 15 August 2007

Ritab S. Al-Khouri

This paper presents new evidence of the relationship between financial market development (banking sector) and economic growth for a set of seven Middle East and North…

Abstract

This paper presents new evidence of the relationship between financial market development (banking sector) and economic growth for a set of seven Middle East and North African economies over the period 1965–2002. We find evidence that in six of the seven countries, banking-sector development Granger causes increases in economic growth. However, in three of those six countries, economic growth also Granger causes banking development. Our co-integration analysis reveals that there is a stable long-run equilibrium relationship between banking-sector development and economic growth for all our countries. However, based on vector error-correction models, there is limited evidence that banking-sector development boosts economic growth in the short run.

Details

Issues in Corporate Governance and Finance
Type: Book
ISBN: 978-1-84950-461-4

Open Access
Article
Publication date: 22 December 2020

Taiyan Huang

The purpose of this paper is based on China’s economic fundamentals. Factor input, structural optimization and institutional reform, which determine the fundamentals of…

1398

Abstract

Purpose

The purpose of this paper is based on China’s economic fundamentals. Factor input, structural optimization and institutional reform, which determine the fundamentals of China's economic development, will actively prop up long-term, sustained and stable growth of the Chinese economy and keep China's potential economic growth rate stabilized within a reasonable growth range in the long term.

Design/methodology/approach

The fundamentals of economic development of a country are the basic situation of economic operation determined by the country's main factors and the long-term trend thereof, and they have such characteristics as stability, internality and persistence.

Findings

Stability refers to economic operation that remains relatively stable within a reasonable growth range at a certain stage of development, and this does not rule out exceptional economic fluctuations in certain years due to the impact of unexpected short-term factors. For instance, the fundamentals of the Chinese economy during the period after the reform and opening-up are characterized by a sustained high growth rate.

Originality/value

Internality refers to the intrinsic quantity and quality of all factors supporting the economic development of a country, especially the quantity and quality of the factors that play a decisive role in the economic development of a country at a specific stage. For instance, demographic dividend and capital formation have bolstered the high-speed growth of the Chinese economy since the reform and opening-up.

Details

China Political Economy, vol. 3 no. 2
Type: Research Article
ISSN: 2516-1652

Keywords

Article
Publication date: 31 August 2012

William R. DiPeitro and Emmanuel Anoruo

The purpose of this paper is to examine the impact of the size of government and public debt on real economic growth, for a panel of 175 countries around the world.

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Abstract

Purpose

The purpose of this paper is to examine the impact of the size of government and public debt on real economic growth, for a panel of 175 countries around the world.

Design/methodology/approach

The paper utilizes the fixed‐effects and random‐effects techniques to estimate the panel regressions.

Findings

The results indicate that both the size of government and the extent of government indebtedness have negative effects on economic growth.

Practical implications

The findings suggest that the authorities ought to take the necessary steps to curtail excessive government spending and public debts, in order to promote economic growth.

Originality/value

The contribution of the paper is its application of the fixed‐ and random‐effects techniques in modeling the relation of real economic growth to the size of government and public debt, for a panel of 175 countries around the world.

Details

Journal of Economic Studies, vol. 39 no. 4
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 28 October 2013

Abdullah Alam

The paper aims to study the relationship between economic growth, nuclear energy consumption and carbon dioxide (CO2) emissions for a panel of 25 countries over a period…

2083

Abstract

Purpose

The paper aims to study the relationship between economic growth, nuclear energy consumption and carbon dioxide (CO2) emissions for a panel of 25 countries over a period of 1993-2010. Through this study, the author has provided an insight into one of the available sources of energy, i.e. nuclear energy and its impact on economic growth and CO2 emissions.

Design/methodology/approach

Separate panels are created for developing and developed economies. Short- and long-run causalities between the variables are established using error correction mechanism.

Findings

For the developed countries, short-run causality running from CO2 emissions to economic growth was estimated, whereas strong form of causality indicated the dependence of CO2 emissions on economic growth and nuclear energy consumption was seen to impact CO2 emissions. For the developing countries, both the short-run and strong-form causality estimates indicate that economic growth causes CO2 emissions.

Practical implications

On policy front, developing countries can safely adopt CO2 cut-back policies as they are not found to impact economic growth. For the developed countries, such policies may impede growth in the short run, but in the long run these policies do not affect the economic growth.

Originality/value

Keeping in mind the significance of nuclear energy consumption in economic growth and less/no GHG emissions generated by nuclear energy, this study validates its significance. This study, to the best of the author's knowledge, considers the largest panel (i.e. 25 countries) to date and the only study that focuses on studying three different panels (complete dataset, developed countries, developing countries) in one study and applies the vector error correction mechanism to study the causal relationship between nuclear energy consumption, CO2 emissions and economic growth.

Details

Journal of Economic Studies, vol. 40 no. 6
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 30 January 2004

Jaehwa Lee

This paper considers a broader concept of economic integration in order to analyze the impact of integration on economic growth within the context of the knowledge-driven…

Abstract

This paper considers a broader concept of economic integration in order to analyze the impact of integration on economic growth within the context of the knowledge-driven endogenous economic growth model. The equilibrium growth rate derived from the model implies that while increasing the flow of ideas from integration speeds up the long-run rate of growth, impact of trade liberalization is complicated and not decisive. The overall impact of economic integration on • economic growth depends on various aspects of the economy which are related to its R&D investment such as knowledge spillovers, and industrial and market structures. The results of this paper suggest that policy makers need to consider international economic policy, market structure and industrial policy all at once, with special emphasis on the effect affirms' R&D activities when making decisions on economic integration.

Details

Journal of International Logistics and Trade, vol. 1 no. 2
Type: Research Article
ISSN: 1738-2122

Keywords

Article
Publication date: 1 March 2002

Fouad K. AINajjar

This study examines the cross‐sectional relationship between economic growth and variables suggested by the economic literature as affecting economic growth. The results…

Abstract

This study examines the cross‐sectional relationship between economic growth and variables suggested by the economic literature as affecting economic growth. The results show that economic freedom, in addition to known macroeconomic variables, is significantly related to economic growth.

Details

Review of Accounting and Finance, vol. 1 no. 3
Type: Research Article
ISSN: 1475-7702

Article
Publication date: 18 May 2010

Stanislav Ivanov and Craig Webster

The aim of this paper is to present a methodology for the decomposition of economic growth by industry which allows interindustry comparisons.

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Abstract

Purpose

The aim of this paper is to present a methodology for the decomposition of economic growth by industry which allows interindustry comparisons.

Design/methodology/approach

The paper uses the growth decomposition methodology developed by Ivanov and Ivanov and Webster for tourism and generalizes it for all industries in the national economy.

Findings

The methodology is exemplified with analysis of the contribution of specific industries to economic growth in Bulgaria for the period 2000‐2005. However, the model presents an approach that is general and can be applied to other countries and industries.

Research limitations/implications

The methodology identifies the direct impacts of specific industries on the per capita growth of real gross domestic product/gross value added. Future research might integrate indirect and induced effects in the analysis. The methodology could be further refined by decomposing the gross domestic product/gross value added to their constituent elements.

Practical implications

The paper identifies the industries in the Bulgarian economy that generate economic growth.

Originality/value

The paper introduces a new methodology for measuring the contribution of specific industries to economic growth. It might be of value to both academics and macroeconomic policy makers.

Details

Journal of Economic Studies, vol. 37 no. 2
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 19 October 2022

Peterson K. Ozili, Adekemi Ademiju and Semia Rachid

The impact of financial inclusion on economic growth is a topic that is generating widespread interest among researchers and practitioners. In this paper, the authors…

Abstract

Purpose

The impact of financial inclusion on economic growth is a topic that is generating widespread interest among researchers and practitioners. In this paper, the authors review the existing literature to highlight the state of research in the literature and identify new opportunities for innovative research.

Design/methodology/approach

The authors used a thematic literature review methodology which involves dividing the review along relevant themes.

Findings

The authors find that significant research on the topic emerged in the post-2016 years. Most of the existing studies are from developing countries and from the Asian and African regions. Existing studies have not utilized relevant theories in explaining the impact of financial inclusion on economic growth. Most studies report a positive impact of financial inclusion on economic growth while very few studies show a negative impact. The most common channel through which financial inclusion affects economic growth is through greater access to financial products and services offered by financial institutions that increases financial intermediation and translates to positive economic growth. The common empirical methodology used in the literature are causality tests, cointegration and regression methods. Multiple proxies of financial inclusion and economic growth were used in the literature which partly explains the conflicting result among existing studies. The review paper concludes by identifying some directions for future research.

Originality/value

This paper presents the first rigorous thematic review of the existing literature on the impact of financial inclusion on economic growth. It highlights the main approach that researchers have taken on this topic and identifies some important research areas for future investigation.

Peer review

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-05-2022-0339.

Details

International Journal of Social Economics, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 11 November 2022

Özcan Karahan and Olcay Çolak

The direction of the causality relationship between Foreign Direct Investment (FDI) and economic growth is a highly controversial issue in the literature. There are two…

Abstract

Purpose

The direction of the causality relationship between Foreign Direct Investment (FDI) and economic growth is a highly controversial issue in the literature. There are two basic approaches advocating different causal directions between FDI and growth, which are called hypotheses of FDI-led Growth and Growth-led FDI. The aim of this study is to analyze the causality relationship between FDI and economic growth in RCEP countries and thus make a new contribution to the discussions in the relevant literature. In addition, the results of the study are expected to provide important implications for the policies to be designed for economic growth based on FDI flows to RCEP countries. Thus, by examining the direction of causality between FDI and economic growth in RCEP countries, we aim to provide a new contribution to related literature and make some implications for the policy design process of economic growth in the RCEP area.

Design/methodology/approach

We empirically examined the direction of a causal link between FDI and economic growth in the context of Regional Comprehensive Economic Partnership (RPEC) countries in order to test the hypothesis of FDI-led growth and Growth-led FDI. Accordingly, as our main variables of interest, we incorporated the inward foreign direct investment stock to gross domestic product ratio (FDI) and gross domestic product per capita (GDP). Hatemi-J (2012) asymmetric causality test has been employed in the investigation of the direction of causality between FDI and GDP over the period of 1980–2020. Thus, unlike most of the studies investigating the direction of causality between FDI and growth using the linear causality analysis method, our study performed a nonlinear causality analysis.

Findings

Empirical results reveal that the causal relationship between FDI and national income in RPEC countries is non-linear or asymmetric . The results of the symmetric causality test for both from FDI to national income and from national income to FDI are statistically insignificant for all countries. Therefore, this finding obtained from the study provided an important guide to the econometric methods to be used in other studies to be conducted in the same region in the future. Concerning the asymmetric causality relationship from FDI to growth, positive FDI shocks are an important cause of national income in most RCEP countries. However, the effect of negative FDI shocks on national income is quite weak compared to positive shocks. Regarding the asymmetric causality relationship from growth to FDI, positive national income shocks do not create a significant causal relationship with FDI. Similarly, the effects of negative national income shocks on FDI are statistically insignificant. Overall, asymmetric causality test results reveal that positive FDI shocks have an important causal impact on economic growth in most RCEP countries. Thus, the results of econometric analysis mostly support the argument that the FDI-led growth hypothesis rather than the Growth-led FDI hypothesis in RCEP countries. Accordingly, policy-makers in most of the RCEP countries should continue to provide more incentives and facilities to multinational companies in order to ensure constant economic growth.

Originality/value

Our study brings a significant difference in the econometric method used compared to most of the other studies in the literature. Existing empirical studies on the direction of causality between FDI and growth mostly use standard Granger-linear causality-type tests to detect the direction of causality among FDI and growth. Unlike most of the studies in the literature, our study adopted a different methodological approach, namely the Hatemi J test to detect the non-linear causality between FDI and economic growth in RCEP countries. Therefore, this paper made a new methodological contribution significantly to the literature focusing on the causal relationship between FDI and economic growth by using a non-linear causality method rather than a linear causality one.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1026-4116

Keywords

1 – 10 of over 133000