Search results
1 – 10 of over 3000Onyinye Imelda Anthony-Orji, Ikenna Paulinus Nwodo, Anthony Orji and Jonathan E. Ogbuabor
This paper aims to examine Nigeria’s dynamic output and output volatility connectedness with USA, China and India using quarterly data from 1981Q1 to 2019Q4.
Abstract
Purpose
This paper aims to examine Nigeria’s dynamic output and output volatility connectedness with USA, China and India using quarterly data from 1981Q1 to 2019Q4.
Design/methodology/approach
The study adopted the network approach of Diebold and Yilmaz (2014) and used the normalized generalized forecast error variance decomposition from an underlying vector error correction model to build connectedness measures.
Findings
The findings show that the global financial crisis (GFC) increased the connectedness index far more than the 2016 Nigeria economic recession. The moderate effect of the 2016 Nigeria economic recession on the connectedness index underscores the fact that Nigeria is a small, open economy with minimal capacity to spread output shock. For both real output and its volatility, the total connectedness index rose smoothly and systematically through time, thereby leaving the economies more connected in the long run.
Originality/value
To the best of the authors’ knowledge, this paper is among the first to examine Nigeria’s dynamic output and output volatility connectedness with the USA, China and India using new empirical insights from the GFC versus 2016 Nigerian recession. The study, therefore, concludes that the Nigerian economy should be diversified immediately as a hedge against future real output shocks, while the USA, China and India should maintain and sustain their current policy frameworks to remain less vulnerable to real output shocks.
Details
Keywords
Luccas Assis Attílio, Joao Ricardo Faria and Mauricio Prado
The authors investigate the impact of the US stock market on the economies of the BRICS and major industrialized economies (G7).
Abstract
Purpose
The authors investigate the impact of the US stock market on the economies of the BRICS and major industrialized economies (G7).
Design/methodology/approach
The authors construct the world economy and the vulnerability between economies using three economic integration variables: bilateral trade, bilateral direct investment and bilateral equity positions. Global vector autoregressive (GVAR) empirical studies usually adopt trade integration to estimate models. The authors complement these studies by using bilateral financial flows.
Findings
The authors summarize the results in four points: (1) financial integration variables increase the effect of the US stock market on the BRICS and G7, (2) the US shock produces similar responses in these groups regarding industrial production, stock markets and confidence but different responses regarding domestic currencies: in the BRICS, the authors detect appreciation of the currencies, while in the G7, the authors find depreciation, (3) G7 stock markets and policy rates are more sensitive to the US shock than the BRICS and (4) the estimates point out to heterogeneities such as the importance of industrial production to the transmission shock in Japan and China, the exchange rate to India, Japan and the UK, the interest rates to the Eurozone and the UK and confidence to Brazil, South Africa and Canada.
Research limitations/implications
The results reinforce the importance of taking into account different levels of economic development.
Originality/value
The authors construct the world economy and the vulnerability between economies using three economic integration variables: bilateral trade, bilateral direct investment and bilateral equity positions. GVAR empirical studies usually adopt trade integration to estimate models. The authors complement these studies by using bilateral financial flows.
Details
Keywords
Amrita Kulshreshtha, Sk Raju, Sai Manasa Muktineni and Devlina Chatterjee
The purpose of this study was to investigate the relationship between income shock suffered during the coronavirus pandemic and subsequent financial well-being (FWB) of Indian…
Abstract
Purpose
The purpose of this study was to investigate the relationship between income shock suffered during the coronavirus pandemic and subsequent financial well-being (FWB) of Indian adults, mediated by financial resilience (FR) and psychological resilience (PR).
Design/methodology/approach
The authors propose a conceptual model for the relationship between income shock and FWB, with FR and PR as mediator variables. The authors consider four dimensions of financial resilience: economic resources, financial inclusion, financial knowledge and social capital. This study uses a unidimensional scale for PR. Data were collected from 370 respondents from 11 cities across India. Structural equation models were built to test the proposed hypotheses.
Findings
Income shock was negatively associated with FWB. Estimated path coefficients for FR and PR were statistically significant and confirmed a mediating role. Among the four dimensions of financial resilience, only economic resources were positively associated with FWB. The mediation relation between economic resources and FWB was larger than PR.
Research limitations/implications
Since convenience sampling was used to collect data, the results of this study are indicative but not generalizable.
Social implications
For individuals who suffered income shocks during the pandemic, adequate economic resources are crucial for FWB. Governmental disbursements, personal savings and medical or life insurance could provide an adequate safety net.
Originality/value
There are no extant studies that examine the association between income shocks and FWB in the pandemic, and this study contributes to the literature.
Details
Keywords
Opeoluwa Adeniyi Adeosun, Richard O. Olayeni, Mosab I. Tabash and Suhaib Anagreh
This study investigates the nexus between the returns on oil prices (OP) and unemployment (UR) while taking into account the influences of two of the most representative measures…
Abstract
Purpose
This study investigates the nexus between the returns on oil prices (OP) and unemployment (UR) while taking into account the influences of two of the most representative measures of uncertainty, the Baker et al. (2016) and Caldara and Iacovello (2021) indexes of economic policy uncertainty (EP) and geopolitical risks (GP), in the relationship.
Design/methodology/approach
The authors use data on the US, Canada, France, Italy, Germany and Japan from January 2000 to February 2022 and the UK from January 2000 to December 2021. The authors then apply the continuous wavelet transform (CWT), wavelet coherence (WC), partial wavelet coherence (PWC) and multiple wavelet coherence (MWC) to examine the returns within a time and frequency framework.
Findings
The CWT tracks the movement and evolution of individual return series with evidence of high variances and heterogenous tendencies across frequencies that also align with critical events such as the GFC and COVID-19 pandemic. The WC reveals the presence of a bidirectional relationship between OP and UR across economies, showing that the two variables affect each other. The authors’ findings establish the predictive influence of oil price on unemployment in line with theory and also show that the variation in UR can impact the economy and alter the dynamics of OP. The authors employ the PWC and MWC to capture the impact of uncertainty indexes in the co-movement of oil price and unemployment in line with the theory of “investment under uncertainty”. Taking into account the common effects of EP and GP, PWC finds that uncertainty measures significantly drive the co-movement of oil prices and unemployment. This result is robust when the authors control for the influence of economic activity (proxied by the GDP) in the co-movement. Furthermore, the MWC reveals the combined intensity, strength and significance of both oil prices and the uncertainty measures in predicting unemployment across countries.
Originality/value
This study investigates the relationship between oil prices, uncertainty measures and unemployment under a time and frequency approach.
Highlights
Wavelet approaches are used to examine the relationship between oil prices and unemployment in the G7.
We account for uncertainty measures in the dynamics of oil prices and unemployment.
We observe a bidirectional relationship between oil prices and unemployment.
Uncertainty measures significantly drive oil prices and unemployment co-movement.
Both oil prices and uncertainty measures significantly drive unemployment.
Wavelet approaches are used to examine the relationship between oil prices and unemployment in the G7.
We account for uncertainty measures in the dynamics of oil prices and unemployment.
We observe a bidirectional relationship between oil prices and unemployment.
Uncertainty measures significantly drive oil prices and unemployment co-movement.
Both oil prices and uncertainty measures significantly drive unemployment.
Details
Keywords
Thi Thanh Xuan Pham and Thi Thanh Trang Chu
This study undertakes a comprehensive investigation into the far-reaching repercussions of Covid-19 stimulus packages and containment policies on stock returns, meticulously…
Abstract
Purpose
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.
Design/methodology/approach
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.
Findings
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.
Practical implications
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.
Originality/value
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.
Details
Keywords
Ezekiel Olamide Abanikanda and James Temitope Dada
Motivated by the negative effect of external shocks on the domestic economy, this study explores the role of financial sector development in absorbing the effect of external…
Abstract
Purpose
Motivated by the negative effect of external shocks on the domestic economy, this study explores the role of financial sector development in absorbing the effect of external shocks on macroeconomic volatility in Nigeria.
Design/methodology/approach
Autoregressive distributed lag and fully modify ordinary least square are used to examine the moderating effect of financial development in the link between external shocks and macroeconomic volatilities in Nigeria between 1986Q1 and 2019Q4. External shock is proxy using oil price shock, and financial development is proxy by domestic credit to the private sector and market capitalisation. At the same time, macroeconomic volatility is proxy by output and inflation volatilities. Macroeconomic volatilities are generated using generalised autoregressive conditional heteroskedasticity (GARCH 1,1).
Findings
The results indicate that domestic credit to the private sector significantly reduces output and inflation volatilities in Nigeria in the short and long run. However, market capitalisation promotes macroeconomic volatility. More specifically, financial development indicators play different roles in curtaining macroeconomic volatilities. The results also reveal that external shocks stimulate macroeconomic volatility in Nigeria in the short and long run. Nevertheless, the effects of external shocks on macroeconomic volatilities are reduced when the role of financial development is incorporated.
Practical implications
This study, therefore, concludes that strong financial sector development serves as a significant shock absorber in reducing the adverse effect of external shock on the domestic economy.
Originality/value
This study contributes to the extant studies by introducing a country-specific analysis into the empirical examination of how financial development can moderate the influence of external shock on macroeconomic volatilities.
Details
Keywords
This study investigates the observed resurgence in religious beliefs seen across many societies during the COVID-19 pandemic. Using the economic theory of religious clubs, the…
Abstract
Purpose
This study investigates the observed resurgence in religious beliefs seen across many societies during the COVID-19 pandemic. Using the economic theory of religious clubs, the author models religious participation during the pandemic as a mechanism for alleviating the financial distress associated with the health distress from the pandemic.
Design/methodology/approach
Using data from the COVID-19 National Longitudinal Phone Survey (NLPS) in Nigeria, the author investigates the economic motivation for religious intensity during the COVID-19 pandemic. To address endogeneity concerns, the author exploits geographic variables of temperature and longitudes as sources of COVID-19 risk.
Findings
Overall, health distress stimulates religious intensity. Consistent with the economic theory of religious clubs, adverse health shocks stimulate financial distress, and the effect is stronger among religious participants. Similarly, people see God and not the government as a source of protection against COVID-19.
Research limitations/implications
The study’s model sees religious organizations as public goods providers, especially when governments and markets are inefficient.
Practical implications
The study’s recommendations support an expanded role for religious networks in healthcare delivery and more public funding to attenuate the post-pandemic resurgence of social violence in economically distressed regions.
Social implications
Despite the research interest in the COVID-19 pandemic, the long-term implications, many of which relate to social behavior adjustments that cause individuals to identify more closely with their social group, need greater understanding. Suppose religious intensity is linked to economic distress. In that case, this is a major source of worry for countries whose economies are subject to higher fluctuations and where the governments and markets are inefficiently organized. These regions may be more susceptible to a resurgence in religious fundamentalism associated with the economic shocks from the pandemic. Consequently, these regions would require more public funding to attenuate the potential for costly activities like organized violence, suicide attacks and terrorist activities in the aftermath of the pandemic.
Originality/value
Prompted by the observation of the increase in religious identity through religious intensity during the pandemic, the author contributes by developing theoretically-based hypotheses that are incentive-compatible to provide a rational justification for the observation. The author empirically validates the hypothesis by taking advantage of the COVID-19 National Survey in Nigeria by specifically using survey rounds 4 and 7 which have more comprehensive religious items included.
Peer review
The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-11-2022-0719
Details
Keywords
Amira Mohamed Emara and Nashwa Mostafa Ali Mohamed
This paper aims to investigate the relationship between global economic fluctuations and human development through four transmission channels (foreign direct investment (FDI)…
Abstract
Purpose
This paper aims to investigate the relationship between global economic fluctuations and human development through four transmission channels (foreign direct investment (FDI), official development aid (ODA), remittances and export earnings) in Egypt as an open developing economy, in the period 1990–2015.
Design/methodology/approach
The paper uses a vector autoregressive model, which implies examining the impulse response functions and variance decompositions.
Findings
The results indicate that human development is negatively affected by global economic fluctuations through the four channels, namely, ODA, FDI, export earnings and remittances. In addition, the most effective transmission channels are FDI in the short run and export earnings in the long run.
Originality/value
While a large body of literature addresses the direct impact of business cycles and economic shocks on human development, only some studies focus on the indirect impact. The contribution is to identify the indirect impact of global economic fluctuations on human development in a developing economy, considering four transmission channels and to determine the most important of these channels. Moreover, using the human development index is an addition in this paper as most previous literature depends on other human development indicators such as children’s health, employment and schooling.
Details
Keywords
Suzanna Elmassah, Shereen Bacheer and Eslam Hassanein
This research's main objective is to investigate the relationship between consumption expenditure and consumer confidence in the USA and to study their effects on US economic…
Abstract
Purpose
This research's main objective is to investigate the relationship between consumption expenditure and consumer confidence in the USA and to study their effects on US economic revivalism during and after the coronavirus disease 2019 (COVID-19) shock.
Design/methodology/approach
The authors use Michigan's monthly Consumer Sentiment Index and its five components from January 1978 to April 2020. The study is unique in quantifying the potential variations in US consumer confidence due to COVID-19 under different scenarios, by providing a projection until December 2021. It also estimates the time needed for recovery and offers guidance to policymakers on ways to contain the negative impacts of COVID-19 on the economy by restoring consumer confidence.
Findings
All scenarios show a gradual recovery of consumer confidence and consumption expenditure. This study recommends expansionary policies to encourage consumption expenditure to generate additional demand and boost economic growth and job creation.
Practical implications
Though this study is limited to the US consumer confidence index, it offers significant implications for marketers, customers and policymakers of other developed economies. The authors recommend expansionary economic policies to boost consumer confidence, raise economic growth and result in job creation.
Originality/value
The study is unique in quantifying the potential variations in US consumer confidence due to COVID-19 under different scenarios; by providing a projection until December 2021. It also estimates the time needed for recovery and guidance for policymakers on ways to contain the COVID-19 shock negative impacts on the economy by restoring consumer confidence.