Pub Date : 2022-10-24DOI: 10.29259/sijdeb.v6i3.255-276
K. Sodji
This paper estimates the magnitude of capital flight and analyzes its impact on economic growth in the West African Economic and Monetary Union countries. Over the period from 1970 to 2019, total real capital flight from these countries is positive and significant with a magnitude that amounts to $31,075.26 million in constant dollars, or 17.40 percent of investment. Six countries have experienced significant real capital flight over the past four decades: Ivory Coast, Guinea Bissau, Mali, Niger, Burkina Faso, and Senegal. Using dynamic fixed-effects estimation, the paper finds that, in the long run, capital flight significantly reduces economic growth in countries where capital flight is positive and that the negative effect does not appear to be cumulative with investment in the case of these groups of countries. In addition, the paper recommends that the authorities commit to reducing capital flight by improving governance and strengthening the quality of institutions.
{"title":"Extent of Capital Flight and Its Impact on Economic Growth: The Case of WAEMU countries","authors":"K. Sodji","doi":"10.29259/sijdeb.v6i3.255-276","DOIUrl":"https://doi.org/10.29259/sijdeb.v6i3.255-276","url":null,"abstract":"This paper estimates the magnitude of capital flight and analyzes its impact on economic growth in the West African Economic and Monetary Union countries. Over the period from 1970 to 2019, total real capital flight from these countries is positive and significant with a magnitude that amounts to $31,075.26 million in constant dollars, or 17.40 percent of investment. Six countries have experienced significant real capital flight over the past four decades: Ivory Coast, Guinea Bissau, Mali, Niger, Burkina Faso, and Senegal. Using dynamic fixed-effects estimation, the paper finds that, in the long run, capital flight significantly reduces economic growth in countries where capital flight is positive and that the negative effect does not appear to be cumulative with investment in the case of these groups of countries. In addition, the paper recommends that the authorities commit to reducing capital flight by improving governance and strengthening the quality of institutions.","PeriodicalId":32395,"journal":{"name":"Sriwijaya International Journal of Dynamic Economics and Business","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-10-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42921078","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-26DOI: 10.29259/sijdeb.v6i3.291-308
M. Abbas, J. Kustiandi, Amin Syaifudin, Achmad Nurdiono
This study aims to determine the interaction effect of democracy and economic freedom on corruption in ASEAN, 2012-2021. The tool analysis used in this study is typology analysis to determine the position of each ASEAN country based on the level of Corruption, democracy, and economic freedom, and it was amplified by panel data regression with a fixed effect. Typology analysis shows that the higher the level of democracy and economic freedom, the better the Corruption Perception Index (CPI). Regression analysis also shows that when a country possesses economic freedom level below 6.25, then democracy has a negative effect on corruption. Likewise, when the level of democracy of a country is below 4.4 then a change of economic freedom will reduce the CPI instead. This corresponds to the typology analysis in which Malaysia and Singapore have levels of democracy and economic freedom over 4.4 and 6.25—on average—during 2012-2021.
{"title":"The Role of Democratization and Economic Freedom on Corruption: A Case study of ASEAN","authors":"M. Abbas, J. Kustiandi, Amin Syaifudin, Achmad Nurdiono","doi":"10.29259/sijdeb.v6i3.291-308","DOIUrl":"https://doi.org/10.29259/sijdeb.v6i3.291-308","url":null,"abstract":"This study aims to determine the interaction effect of democracy and economic freedom on corruption in ASEAN, 2012-2021. The tool analysis used in this study is typology analysis to determine the position of each ASEAN country based on the level of Corruption, democracy, and economic freedom, and it was amplified by panel data regression with a fixed effect. Typology analysis shows that the higher the level of democracy and economic freedom, the better the Corruption Perception Index (CPI). Regression analysis also shows that when a country possesses economic freedom level below 6.25, then democracy has a negative effect on corruption. Likewise, when the level of democracy of a country is below 4.4 then a change of economic freedom will reduce the CPI instead. This corresponds to the typology analysis in which Malaysia and Singapore have levels of democracy and economic freedom over 4.4 and 6.25—on average—during 2012-2021.","PeriodicalId":32395,"journal":{"name":"Sriwijaya International Journal of Dynamic Economics and Business","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47642287","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-25DOI: 10.29259/sijdeb.v6i3.277-290
Jean Richard Jokhu, Avita Melinia Rahmawati
The rapid development of online food delivery applications in Indonesia currently makes Shopee launch a new feature, Shopee Food. By joining the online food delivery application market in Indonesia, Shopee Food must be able to compete with other online food delivery applications. This study aims to analyzed the factors that influencing purchase intention in Shopee Food. Using Brand Image as the mediating factor for Perceived Ease of Us and Electronic Word-of-mouth, this study tries to explain customer intention to purchase food in shopeefood. This study used quantitate method with purposive sampling to draw the espondent, with total 345 respondents. The findings of this study found that word-of-mouth, perceived ease of use plays significant role on user purchase intention in Shopeefood, and brand image also significantly mediate the relationship of perceived ease of use and word of mouth toward intention to use.
{"title":"Would You Like to Buy Food via Ecommerce App? The Mediating Role of Brand Image in Electronic Word of Mouth, Perceived Ease of Use, and Purchase Intention","authors":"Jean Richard Jokhu, Avita Melinia Rahmawati","doi":"10.29259/sijdeb.v6i3.277-290","DOIUrl":"https://doi.org/10.29259/sijdeb.v6i3.277-290","url":null,"abstract":"The rapid development of online food delivery applications in Indonesia currently makes Shopee launch a new feature, Shopee Food. By joining the online food delivery application market in Indonesia, Shopee Food must be able to compete with other online food delivery applications. This study aims to analyzed the factors that influencing purchase intention in Shopee Food. Using Brand Image as the mediating factor for Perceived Ease of Us and Electronic Word-of-mouth, this study tries to explain customer intention to purchase food in shopeefood. This study used quantitate method with purposive sampling to draw the espondent, with total 345 respondents. The findings of this study found that word-of-mouth, perceived ease of use plays significant role on user purchase intention in Shopeefood, and brand image also significantly mediate the relationship of perceived ease of use and word of mouth toward intention to use. ","PeriodicalId":32395,"journal":{"name":"Sriwijaya International Journal of Dynamic Economics and Business","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46960094","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-11DOI: 10.29259/sijdeb.v6i3.321-340
Joy Esosa Egbon–Aghaleleghian, David Jerry Oziegbe
This study examined fair value measurement and firm performance of quoted manufacturing companies in Nigeria. The study used data from thirty-one (31) selected quoted manufacturing companies in Nigeria for a period of 16 years that were split into eight (8) years of historical cost accounting method (2004-2011) and eight (8) years of fair value measurement valuation technique method (2012-2019). The study utilized the paired sample t-test framework in analyzing the data. Findings revealed that there are significant differences between the impact of historical cost accounting and fair value measurement valuation technique on firm performance. Thus, the study recommended among others that the Financial Reporting Council of Nigeria should focus on the compliance level of companies with fair value accounting in addition to taking necessary steps to improving the understandability and usage of fair value accounting.
{"title":"Fair Value Measurement and Firm Performance of Quoted Manufacturing Companies in Nigeria","authors":"Joy Esosa Egbon–Aghaleleghian, David Jerry Oziegbe","doi":"10.29259/sijdeb.v6i3.321-340","DOIUrl":"https://doi.org/10.29259/sijdeb.v6i3.321-340","url":null,"abstract":"This study examined fair value measurement and firm performance of quoted manufacturing companies in Nigeria. The study used data from thirty-one (31) selected quoted manufacturing companies in Nigeria for a period of 16 years that were split into eight (8) years of historical cost accounting method (2004-2011) and eight (8) years of fair value measurement valuation technique method (2012-2019). The study utilized the paired sample t-test framework in analyzing the data. Findings revealed that there are significant differences between the impact of historical cost accounting and fair value measurement valuation technique on firm performance. Thus, the study recommended among others that the Financial Reporting Council of Nigeria should focus on the compliance level of companies with fair value accounting in addition to taking necessary steps to improving the understandability and usage of fair value accounting.","PeriodicalId":32395,"journal":{"name":"Sriwijaya International Journal of Dynamic Economics and Business","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42492922","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-05DOI: 10.29259/sijdeb.v6i2.197-210
Dwi Nurvita, Siti Rohima, Abdul Bashir, M. Mardalena
This study investigates the effect of economic growth, education expenditures, and health expenditures on human development index (HDI) in Jambi Province. This study used panel data of 11 district/cities from 2012 to 2019. The analytical approach was quantitative by applying panel data regression models. The findings of the study indicated that the economic growth, education expenditure, and health expenditure had a significant and positive influence on the human development index. The implication of the model in this study shows that the efforts made by the Jambi provincial government are effective and optimal in allocating education and health spending to encourage increased human capital as measured by a high human development index. This is input in structural reforms in the education and health sectors to ensure that skilled human resources are developed in areas critical to economic development.
{"title":"The Role of Public Spending on Education, Health, and Economic Growth toward Human Development Index in the Local Economy","authors":"Dwi Nurvita, Siti Rohima, Abdul Bashir, M. Mardalena","doi":"10.29259/sijdeb.v6i2.197-210","DOIUrl":"https://doi.org/10.29259/sijdeb.v6i2.197-210","url":null,"abstract":"This study investigates the effect of economic growth, education expenditures, and health expenditures on human development index (HDI) in Jambi Province. This study used panel data of 11 district/cities from 2012 to 2019. The analytical approach was quantitative by applying panel data regression models. The findings of the study indicated that the economic growth, education expenditure, and health expenditure had a significant and positive influence on the human development index. The implication of the model in this study shows that the efforts made by the Jambi provincial government are effective and optimal in allocating education and health spending to encourage increased human capital as measured by a high human development index. This is input in structural reforms in the education and health sectors to ensure that skilled human resources are developed in areas critical to economic development.","PeriodicalId":32395,"journal":{"name":"Sriwijaya International Journal of Dynamic Economics and Business","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-07-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45475165","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-05DOI: 10.29259/sijdeb.v6i2.131-146
Lee En En, Balakrishnan Balakrishnan
Purchasing a new smartphone for online learning purposes was unprecedented during the Covid-19 pandemic and it has shifted the customers' purchase intention for a niche purpose. There are many options to choose a suitable smartphone for online learning and this has made smartphone retailers press the actual need and understand the purpose and preferences. This paper analyses the smartphone purchase intention for online learning purposes and factors that influence the purchase intention by a specific market segment of the university student. The study analyses the significant relationship between the brand, price, social influence, relative advantage and purchase intention. The study extends the previously study literature and methods to assess and determine the influence factors. The data was collected from Nilai University students lining in the city of Nilai Negeri Sembilan Malaysia. A convenience sampling method was adopted and SPSS software was used to analyse the samples. There is various research on smartphone purchase intentions, this study focuses on a specific market segment of university students living in small-town which is about 50 kilometres from the Kuala Lumpur city centre. The study provides an insight into the market segment’s online learning requirement for a new smartphone for those living and studying in small towns. The research provides insight into rural marketing strategy’s adoption.
{"title":"Smartphone Purchase Intention by Nilai University Students Living in the City of Nilai Malaysia","authors":"Lee En En, Balakrishnan Balakrishnan","doi":"10.29259/sijdeb.v6i2.131-146","DOIUrl":"https://doi.org/10.29259/sijdeb.v6i2.131-146","url":null,"abstract":"Purchasing a new smartphone for online learning purposes was unprecedented during the Covid-19 pandemic and it has shifted the customers' purchase intention for a niche purpose. There are many options to choose a suitable smartphone for online learning and this has made smartphone retailers press the actual need and understand the purpose and preferences. This paper analyses the smartphone purchase intention for online learning purposes and factors that influence the purchase intention by a specific market segment of the university student. The study analyses the significant relationship between the brand, price, social influence, relative advantage and purchase intention. The study extends the previously study literature and methods to assess and determine the influence factors. The data was collected from Nilai University students lining in the city of Nilai Negeri Sembilan Malaysia. A convenience sampling method was adopted and SPSS software was used to analyse the samples. There is various research on smartphone purchase intentions, this study focuses on a specific market segment of university students living in small-town which is about 50 kilometres from the Kuala Lumpur city centre. The study provides an insight into the market segment’s online learning requirement for a new smartphone for those living and studying in small towns. The research provides insight into rural marketing strategy’s adoption.","PeriodicalId":32395,"journal":{"name":"Sriwijaya International Journal of Dynamic Economics and Business","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-07-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42788108","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-05DOI: 10.29259/sijdeb.v6i2.165-184
Emma Rani Nuristya, D. Ratmono
This paper examines the effect of auditor switching and financial distress on financial statement fraud with audit report lag as the intervening variable. This research used 26 fraud companies and 45 non-fraud companies listed by Indonesia Stock Exchange that break the article VIII.G.7 and IX.E.2 issued by Financial Services Authority in 2020. This quantitative research used Partial Least Square (PLS) with WarpPLS 7.0 tools. We conclude that financial distress and audit report lag directly affect Financial Statement fraud. It also shows that audit report lag partially mediates the relationship between financial distress and financial statement fraud
{"title":"The Role of Audit Report Lag in Mediating the Effect of Auditor Switching and Financial Distress on Financial Statement Fraud","authors":"Emma Rani Nuristya, D. Ratmono","doi":"10.29259/sijdeb.v6i2.165-184","DOIUrl":"https://doi.org/10.29259/sijdeb.v6i2.165-184","url":null,"abstract":"This paper examines the effect of auditor switching and financial distress on financial statement fraud with audit report lag as the intervening variable. This research used 26 fraud companies and 45 non-fraud companies listed by Indonesia Stock Exchange that break the article VIII.G.7 and IX.E.2 issued by Financial Services Authority in 2020. This quantitative research used Partial Least Square (PLS) with WarpPLS 7.0 tools. We conclude that financial distress and audit report lag directly affect Financial Statement fraud. It also shows that audit report lag partially mediates the relationship between financial distress and financial statement fraud","PeriodicalId":32395,"journal":{"name":"Sriwijaya International Journal of Dynamic Economics and Business","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-07-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45709001","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-05DOI: 10.29259/sijdeb.v6i2.147-164
Vietha Devia SS, Yulia Kusuma Wardani Putri
This study aims to determine the effect of Paylater convenience in the form of user age at registration, payment tenor flexibility, interest rates or fees and consumer satisfaction with purchasing decisions using Pay Later. This study compares the use of Paylater on Shopee and Gojek. The consideration of comparing the two Paylater platforms is because these two platforms rank the most used by Paylater users in Indonesia. The author uses primary data by using a sample of Paylater users in Malang City as research material and using PLS in analyzing the data. The results showed that user age, credit interest rates and consumer satisfaction had a significant effect on purchasing decisions at Shopee Paylater. While on Gojek Paylater, the variables that have a significant effect are credit interest rates and purchase satisfaction.
{"title":"Purchase Decision: Do the Paylater Ease and Consumer Satisfaction Affect It? (Case Study on Shopee Paylater and Gojek Paylater)","authors":"Vietha Devia SS, Yulia Kusuma Wardani Putri","doi":"10.29259/sijdeb.v6i2.147-164","DOIUrl":"https://doi.org/10.29259/sijdeb.v6i2.147-164","url":null,"abstract":"This study aims to determine the effect of Paylater convenience in the form of user age at registration, payment tenor flexibility, interest rates or fees and consumer satisfaction with purchasing decisions using Pay Later. This study compares the use of Paylater on Shopee and Gojek. The consideration of comparing the two Paylater platforms is because these two platforms rank the most used by Paylater users in Indonesia. The author uses primary data by using a sample of Paylater users in Malang City as research material and using PLS in analyzing the data. The results showed that user age, credit interest rates and consumer satisfaction had a significant effect on purchasing decisions at Shopee Paylater. While on Gojek Paylater, the variables that have a significant effect are credit interest rates and purchase satisfaction.","PeriodicalId":32395,"journal":{"name":"Sriwijaya International Journal of Dynamic Economics and Business","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-07-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44205303","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-05DOI: 10.29259/sijdeb.v6i2.185-196
Ichsan Hamidi, Liliana Liliana, Gustriani Gustriani, Dirta Pratama Atiyatna, D. Sari
This study determined to examines zakat empowerment in mustahiq economic recovery during the covid-19 pandemic. This study uses quantitative approaches using primary and secondary data through interviews, observation, and documentation. Methodology used in this study is a quantitative approach with multiple regression model. Population are mustahiq zakat who become a member in zakat productive program. Findings of this study indicated that zakat productive and length of business has a significant effect and positive correlation on mustahiq income during the covid-19 pandemic. On this point the empowerment of zakat to recovery the mustahiq economic during this pandemic can be developed with more innovation, so that more mustahiq zakat got a better living through this program. This research is expected to maximizing the role of zakat empowerment to improve mustahiq welfare and can be a reference in developing sustainable programs in zakat empowerment in Indonesia.
{"title":"Zakat Empowerment in Mustahiq Economic Recovery During the Covid-19 Pandemic","authors":"Ichsan Hamidi, Liliana Liliana, Gustriani Gustriani, Dirta Pratama Atiyatna, D. Sari","doi":"10.29259/sijdeb.v6i2.185-196","DOIUrl":"https://doi.org/10.29259/sijdeb.v6i2.185-196","url":null,"abstract":"This study determined to examines zakat empowerment in mustahiq economic recovery during the covid-19 pandemic. This study uses quantitative approaches using primary and secondary data through interviews, observation, and documentation. Methodology used in this study is a quantitative approach with multiple regression model. Population are mustahiq zakat who become a member in zakat productive program. Findings of this study indicated that zakat productive and length of business has a significant effect and positive correlation on mustahiq income during the covid-19 pandemic. On this point the empowerment of zakat to recovery the mustahiq economic during this pandemic can be developed with more innovation, so that more mustahiq zakat got a better living through this program. This research is expected to maximizing the role of zakat empowerment to improve mustahiq welfare and can be a reference in developing sustainable programs in zakat empowerment in Indonesia.","PeriodicalId":32395,"journal":{"name":"Sriwijaya International Journal of Dynamic Economics and Business","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-07-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46154837","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-05DOI: 10.29259/sijdeb.v6i2.211-226
D. Umoru, Rafat Hussaini
There have been concerns raised over the low-capacity utilisation of resources in developing countries. Countries within this cadre tend to have high untapped areas of investment despite existing potentials and the open economy operated. Certain macroeconomic variables and shocks that arise from variance over specified periods may be responsible for changes in investment values. The study aimed at determining effect of exchange rate devaluation and interest rate volatility on investment growth in selected ECOWAS nations. The study made use of secondary data from 1991 to 2020 which were obtained from publications of the United Nations, IMF and World Bank. Panel Unit root and panel co-integration tests were conducted to ascertain stationarity of variables and existence of long-term relationship between variables respectively. The data were found to be stationary at first differencing at the most. Long term relationship was found among study variables. We estimated the Structural Vector Auto Regressive (SVAR) model in order to identify the influence of policy shocks in exchange rate devaluation and interest rate volatility. The SVAR results revealed that investment growth responds to shocks from exchange rate devaluation negatively at first, but stabilises over time. For interest rate volatility, investment rate continues to grow but at a diminishing rate over the periods. Investment growth was also found to react largely to its internal shocks from its values in lagged periods. The study recommended among others, that devaluation of currency should be a last resort to salvaging the economy to reduce the inflationary pressure and at least, sustain current living standards.
{"title":"Exchange Rate Devaluation, Interest Rate Volatility, and Investment Growth: ECOWAS Evidence","authors":"D. Umoru, Rafat Hussaini","doi":"10.29259/sijdeb.v6i2.211-226","DOIUrl":"https://doi.org/10.29259/sijdeb.v6i2.211-226","url":null,"abstract":"There have been concerns raised over the low-capacity utilisation of resources in developing countries. Countries within this cadre tend to have high untapped areas of investment despite existing potentials and the open economy operated. Certain macroeconomic variables and shocks that arise from variance over specified periods may be responsible for changes in investment values. The study aimed at determining effect of exchange rate devaluation and interest rate volatility on investment growth in selected ECOWAS nations. The study made use of secondary data from 1991 to 2020 which were obtained from publications of the United Nations, IMF and World Bank. Panel Unit root and panel co-integration tests were conducted to ascertain stationarity of variables and existence of long-term relationship between variables respectively. The data were found to be stationary at first differencing at the most. Long term relationship was found among study variables. We estimated the Structural Vector Auto Regressive (SVAR) model in order to identify the influence of policy shocks in exchange rate devaluation and interest rate volatility. The SVAR results revealed that investment growth responds to shocks from exchange rate devaluation negatively at first, but stabilises over time. For interest rate volatility, investment rate continues to grow but at a diminishing rate over the periods. Investment growth was also found to react largely to its internal shocks from its values in lagged periods. The study recommended among others, that devaluation of currency should be a last resort to salvaging the economy to reduce the inflationary pressure and at least, sustain current living standards.","PeriodicalId":32395,"journal":{"name":"Sriwijaya International Journal of Dynamic Economics and Business","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-07-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48558408","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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