The nexus between economic growth and energy consumption is essential in energy economics and economic development literature. The recent urgency in accelerating the decarbonization processes of economies has enhanced relevance to analyzing this empirical relationship in the face of technological advances, regulatory changes, and the expanding uptake of renewable energy technologies worldwide. This article presents a bibliometric analysis of the literature on economic growth, energy consumption, and renewable energies in Brazil using clustering as a support tool. Between 1995 and 2022, 177 Energy-Growth, Brazil, and Sustainability studies were published. It was found that China leads the ranking of publications, taking part in 28.84% of the production related to the link between economic growth and consumption of renewable energy in Brazil, followed by Turkey (21.52%) and Brazil (21.31%). The participation of other countries in the literature adds up to 32.29%. Keywords such as “ecological footprint,” “environmental sustainability,” “environmental Kuznets curve,” and “emissions” show how in recent years, the literature has been guided by a discussion related to economic-environmental factors. Another result was that the Granger causality test is a research frontier with the most significant associated strength.
{"title":"A Bibliometric Study on the Nexus of Economic Growth and Renewable Energy in Brazil","authors":"M. L. V. Marques, D. R. D. Santos","doi":"10.5539/ijef.v15n4p47","DOIUrl":"https://doi.org/10.5539/ijef.v15n4p47","url":null,"abstract":"The nexus between economic growth and energy consumption is essential in energy economics and economic development literature. The recent urgency in accelerating the decarbonization processes of economies has enhanced relevance to analyzing this empirical relationship in the face of technological advances, regulatory changes, and the expanding uptake of renewable energy technologies worldwide. This article presents a bibliometric analysis of the literature on economic growth, energy consumption, and renewable energies in Brazil using clustering as a support tool. Between 1995 and 2022, 177 Energy-Growth, Brazil, and Sustainability studies were published. It was found that China leads the ranking of publications, taking part in 28.84% of the production related to the link between economic growth and consumption of renewable energy in Brazil, followed by Turkey (21.52%) and Brazil (21.31%). The participation of other countries in the literature adds up to 32.29%. Keywords such as “ecological footprint,” “environmental sustainability,” “environmental Kuznets curve,” and “emissions” show how in recent years, the literature has been guided by a discussion related to economic-environmental factors. Another result was that the Granger causality test is a research frontier with the most significant associated strength.","PeriodicalId":37166,"journal":{"name":"International Journal of Economics and Finance Studies","volume":"15 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-03-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84733055","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}
This study investigated financial crimes in Somali public sector. It intended to explicitly assess public workers’ perception of financial crimes, as well as the primary causes and effects of financial crimes in Somali Public Sector. A descriptive research approach was used in this study, and a questionnaire was used to gather data from 160 participants. This research was guided by the Fraud Triangle Theory and Fraud Dimond Theory which describe pressure, opportunity, rationalization and capability as key factors for conducting financial crimes. Although these elements have a significant influence, the findings showed that opportunity mainly representing improper internal audit and control, poor governance and improper duty segregation is the most contributing element to financial crimes in Somali public sector. The findings also revealed that financial crimes disturb resource allocation, wealth distribution and socioeconomic development, resulting in poverty and loss of public trust in government institutions. The study concludes that the financial crimes in public sector of Somalia is alarming and is affecting the economy, quality of life, wellbeing, integrity and social progress. However, this study recommends that the Somali government should establish effective control mechanisms, apply appropriate budgetary strategies to ensure government financial soundness and establish/activate government anti-corruption bodies to combat any form of corruption and financial crimes. Furthermore, the government should develop strong legal frameworks to promote accountability and deter perpetrator. The research also recommends that the government implement e-government with the purpose of increasing transparency and public trust. Finally, the study recommends that international donors should help Somalia to develop strong public institutions by providing administrative and technical support, particular, public financial management system.
{"title":"Financial Crimes in Somali Public Sector: Causes and Consequences","authors":"Dayah Abdi Kulmie","doi":"10.5539/ijef.v15n4p18","DOIUrl":"https://doi.org/10.5539/ijef.v15n4p18","url":null,"abstract":"This study investigated financial crimes in Somali public sector. It intended to explicitly assess public workers’ perception of financial crimes, as well as the primary causes and effects of financial crimes in Somali Public Sector. A descriptive research approach was used in this study, and a questionnaire was used to gather data from 160 participants. This research was guided by the Fraud Triangle Theory and Fraud Dimond Theory which describe pressure, opportunity, rationalization and capability as key factors for conducting financial crimes. Although these elements have a significant influence, the findings showed that opportunity mainly representing improper internal audit and control, poor governance and improper duty segregation is the most contributing element to financial crimes in Somali public sector. The findings also revealed that financial crimes disturb resource allocation, wealth distribution and socioeconomic development, resulting in poverty and loss of public trust in government institutions. The study concludes that the financial crimes in public sector of Somalia is alarming and is affecting the economy, quality of life, wellbeing, integrity and social progress. However, this study recommends that the Somali government should establish effective control mechanisms, apply appropriate budgetary strategies to ensure government financial soundness and establish/activate government anti-corruption bodies to combat any form of corruption and financial crimes. Furthermore, the government should develop strong legal frameworks to promote accountability and deter perpetrator. The research also recommends that the government implement e-government with the purpose of increasing transparency and public trust. Finally, the study recommends that international donors should help Somalia to develop strong public institutions by providing administrative and technical support, particular, public financial management system.","PeriodicalId":37166,"journal":{"name":"International Journal of Economics and Finance Studies","volume":"5 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87361087","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}
Event study based statistical approach is applied within the paper to facilitate a macro analysis against the overall changes of China’s stock market. Sample statistics chosen to launch such empirical study are data from China’s Growth Enterprise Market (GME) and Small and Medium Enterprises Board (SMEs) as well as those collected from the Shenzhen Stock Exchange Component Index and Shanghai Securities Composite Index. The paper analyzed the applicability of Event Study within this research, chose the market mean constant model for calculating Chinese stock market returns, and analyzed the macro tendency for CAR variation. It then took construction, finance, cultural tourism, and catering and hotel as examples to analyze the magnitude of impact Covid-19 had on major industries in the stock market. It is concluded that the change of stock market return caused by the epidemic varies among different industries.
{"title":"A Research on Stock Market Changes in China Caused by Covid-19 -- An Event Study Based Statistical Approach","authors":"Li Cheng, Jermoe Kueh Swee Hui","doi":"10.5539/ijef.v15n4p1","DOIUrl":"https://doi.org/10.5539/ijef.v15n4p1","url":null,"abstract":"Event study based statistical approach is applied within the paper to facilitate a macro analysis against the overall changes of China’s stock market. Sample statistics chosen to launch such empirical study are data from China’s Growth Enterprise Market (GME) and Small and Medium Enterprises Board (SMEs) as well as those collected from the Shenzhen Stock Exchange Component Index and Shanghai Securities Composite Index. The paper analyzed the applicability of Event Study within this research, chose the market mean constant model for calculating Chinese stock market returns, and analyzed the macro tendency for CAR variation. It then took construction, finance, cultural tourism, and catering and hotel as examples to analyze the magnitude of impact Covid-19 had on major industries in the stock market. It is concluded that the change of stock market return caused by the epidemic varies among different industries.","PeriodicalId":37166,"journal":{"name":"International Journal of Economics and Finance Studies","volume":"149 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78893855","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}
This study analyses volatility connectedness at sectoral and regional level within and across the US, UK, EU and Japanese regions between the CDS and equity markets. Analysis is made on 32 sectors and 70 sub-sectors within the regions under study with each having 2,479 observations, covering the period between 2008 until June 2017. The sample is divided between crisis and after-crisis period and the novel connectedness index by Diebold-Yilmaz (2014) is proposed. The domestic and regional analysis show that connectedness between the two asset classes is in general higher during the crisis period. Although the static Gaussian results for the regional analysis show low levels of connectedness across the board, the dynamic analysis show significant connectedness levels, with levels being predominantly higher during the crisis period, signifying contagion effects also at regional level between the two asset classes. When considering the dynamic volatility connectedness between the two asset classes, equity is the asset class which transmits volatility the most. In the US and EU connectedness between the two asset classes in most sectors is predominantly large during disturbed periods, particularly the 2009 crisis and the EU sovereign crisis.
{"title":"Sectoral and Regional Volatility Connectedness: The Case of CDS Spreads and Equities","authors":"Christian Manicaro","doi":"10.5539/ijef.v15n4p8","DOIUrl":"https://doi.org/10.5539/ijef.v15n4p8","url":null,"abstract":"This study analyses volatility connectedness at sectoral and regional level within and across the US, UK, EU and Japanese regions between the CDS and equity markets. Analysis is made on 32 sectors and 70 sub-sectors within the regions under study with each having 2,479 observations, covering the period between 2008 until June 2017. The sample is divided between crisis and after-crisis period and the novel connectedness index by Diebold-Yilmaz (2014) is proposed. The domestic and regional analysis show that connectedness between the two asset classes is in general higher during the crisis period. Although the static Gaussian results for the regional analysis show low levels of connectedness across the board, the dynamic analysis show significant connectedness levels, with levels being predominantly higher during the crisis period, signifying contagion effects also at regional level between the two asset classes. When considering the dynamic volatility connectedness between the two asset classes, equity is the asset class which transmits volatility the most. In the US and EU connectedness between the two asset classes in most sectors is predominantly large during disturbed periods, particularly the 2009 crisis and the EU sovereign crisis.","PeriodicalId":37166,"journal":{"name":"International Journal of Economics and Finance Studies","volume":"21 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89128814","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}
Using a panel of listed manufacturing companies in Bangladesh, this paper intends to empirically assess the relationship between firm-level governance mechanisms and firm performance using an integrated theoretical framework. For this purpose, data has been compiled from Dhaka Stock Exchange (DSE); and published yearly annual reports of particular organizations. The empirical findings of this paper shed light on the impact of ownership structure and board characteristics on its firm’s performance measure by the accounting rate of the return on assets. Although these results are in line with the majority of the literature, this model can still be examined using other proxy measures of firm performance and/or more years of observation. Findings of this study can be useful to managers, investors, and regulators, especially those who want to change their company’s ownership structure and board composition to increase its performance on the stock market.
{"title":"Ownership Structure, Board Characteristics and Firm Performance: Evidence from Bangladesh","authors":"S. Salema","doi":"10.5539/ijef.v15n3p35","DOIUrl":"https://doi.org/10.5539/ijef.v15n3p35","url":null,"abstract":"Using a panel of listed manufacturing companies in Bangladesh, this paper intends to empirically assess the relationship between firm-level governance mechanisms and firm performance using an integrated theoretical framework. For this purpose, data has been compiled from Dhaka Stock Exchange (DSE); and published yearly annual reports of particular organizations. The empirical findings of this paper shed light on the impact of ownership structure and board characteristics on its firm’s performance measure by the accounting rate of the return on assets. Although these results are in line with the majority of the literature, this model can still be examined using other proxy measures of firm performance and/or more years of observation. Findings of this study can be useful to managers, investors, and regulators, especially those who want to change their company’s ownership structure and board composition to increase its performance on the stock market.","PeriodicalId":37166,"journal":{"name":"International Journal of Economics and Finance Studies","volume":"71 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85059286","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}
Xiao-chun Sun, Jiaqi Liu, Jihong Zhang, Chengjun Wang
The dynamic correlation of stock markets in various countries has attracted the attention of scholars and financial investors. In this paper, the dynamic conditional correlation model and the generalized autoregressive conditional heteroskedasticity model are combined to analyze the dynamic conditional correlation coefficient matrix of the stock data of China, the United States, Britain, Germany and Japan, aiming at the five indexes of the Shanghai Securities Composite Index, the Dow Jones Index, the Financial Times Stock Exchange 100 Index, the Frankfurt DAX Index and the Nikkei Index. The results show that there is a certain correlation between the stock markets of various countries, especially the correlation coefficient of the yield of the FTSE index and the GDAXI index reaches 0.96, which a strong correlation. The conclusions of this study can provide constructive suggestions for global economic recovery.
{"title":"The Dynamic Correlation of Stock Markets in the World’s Five Largest Economies—Based on DCC-GARCH Model","authors":"Xiao-chun Sun, Jiaqi Liu, Jihong Zhang, Chengjun Wang","doi":"10.5539/ijef.v15n3p27","DOIUrl":"https://doi.org/10.5539/ijef.v15n3p27","url":null,"abstract":"The dynamic correlation of stock markets in various countries has attracted the attention of scholars and financial investors. In this paper, the dynamic conditional correlation model and the generalized autoregressive conditional heteroskedasticity model are combined to analyze the dynamic conditional correlation coefficient matrix of the stock data of China, the United States, Britain, Germany and Japan, aiming at the five indexes of the Shanghai Securities Composite Index, the Dow Jones Index, the Financial Times Stock Exchange 100 Index, the Frankfurt DAX Index and the Nikkei Index. The results show that there is a certain correlation between the stock markets of various countries, especially the correlation coefficient of the yield of the FTSE index and the GDAXI index reaches 0.96, which a strong correlation. The conclusions of this study can provide constructive suggestions for global economic recovery.","PeriodicalId":37166,"journal":{"name":"International Journal of Economics and Finance Studies","volume":"64 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-02-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83642778","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}
In this paper, we examine the impact of deregulation trends and foreign bank entry on the net interest margins of China’s banking sector. By comparing the banks’ net interest margins before and after the banking liberalization, we investigate the impact of the financial deregulation and the presence of foreign banks on the profitability of Chinese banks. The results indicate that the entrance of foreign banks has strong negative effects on the profitability of domestic banks. The credit risk is the major factor to enhance the profitability of the Chinese domestic banks.
{"title":"The Impact of Deregulation Trends on the Chinese Banks' Interest Margins","authors":"Ming Qi, Ying Jiang, X. Liu","doi":"10.5539/ijef.v15n3p21","DOIUrl":"https://doi.org/10.5539/ijef.v15n3p21","url":null,"abstract":"In this paper, we examine the impact of deregulation trends and foreign bank entry on the net interest margins of China’s banking sector. By comparing the banks’ net interest margins before and after the banking liberalization, we investigate the impact of the financial deregulation and the presence of foreign banks on the profitability of Chinese banks. The results indicate that the entrance of foreign banks has strong negative effects on the profitability of domestic banks. The credit risk is the major factor to enhance the profitability of the Chinese domestic banks.","PeriodicalId":37166,"journal":{"name":"International Journal of Economics and Finance Studies","volume":"08 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-02-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73185482","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}
This paper investigates the impact of international trade on the economic growth of Kenya by using the autoregressive distributive lag model (ARDL) approach with long-run and short-run coefficients, bound tests, and an error correction model. The study further adopts significant exchange rate, export, import, and gross domestic product (GDP) effects on Kenyan economic growth. The augmented dickey Fuller (ADF) test for unit root revealed that the series was of a different order, differing at the level and first differing to check stationarity to meet the intended goals. Data sources included World Bank and IMF data from 1970 to 2019. The result revealed that the exchange rate and import are positively associated with the gross domestic product (GDP), the exchange rate is positive and statistically significant, and export is negatively related to the gross domestic product (GDP) and is statistically insignificant. To boost exports, Kenya must continue its bilateral, regional, and international trade activities; offer technical and funding provisions to micro, small, and medium-sized initiatives in value chains and companies manufacturing the identified talented export goods; and support the progress of market- and product-specific initiatives.
{"title":"Impact of International Trade on Economic Growth in Kenya","authors":"Dahir Mohamed Ali","doi":"10.5539/ijef.v15n3p13","DOIUrl":"https://doi.org/10.5539/ijef.v15n3p13","url":null,"abstract":"This paper investigates the impact of international trade on the economic growth of Kenya by using the autoregressive distributive lag model (ARDL) approach with long-run and short-run coefficients, bound tests, and an error correction model. The study further adopts significant exchange rate, export, import, and gross domestic product (GDP) effects on Kenyan economic growth. The augmented dickey Fuller (ADF) test for unit root revealed that the series was of a different order, differing at the level and first differing to check stationarity to meet the intended goals. Data sources included World Bank and IMF data from 1970 to 2019. The result revealed that the exchange rate and import are positively associated with the gross domestic product (GDP), the exchange rate is positive and statistically significant, and export is negatively related to the gross domestic product (GDP) and is statistically insignificant. To boost exports, Kenya must continue its bilateral, regional, and international trade activities; offer technical and funding provisions to micro, small, and medium-sized initiatives in value chains and companies manufacturing the identified talented export goods; and support the progress of market- and product-specific initiatives.","PeriodicalId":37166,"journal":{"name":"International Journal of Economics and Finance Studies","volume":"15 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-02-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73426059","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}
Global warming has become one of the most serious world-challenging issues nowadays, and much effort is being done to combat its consequences. Therefore, studying the trade-off between carbon emissions and economic activity remains an attractive subject for researchers. In this study, the environmental Kuznets curve (EKC) hypothesis is adopted to verify the trade-off between carbon dioxide emissions per capita and labor productivity in the top 40 emitter countries. Accordingly, a panel data from the top 40 emitter countries is employed from 1992 to 2018, and the novel method of moments quantile regression (MMQREG) is used to analyze the nexus among the variables. In addition, four robustness tests were used to validate the initial results. The findings reveal evidence for the N-shape EKC in the top 40 emitter countries. This indicates that economic growth initially will improve environmental quality up to a certain labor productivity level. However, after reaching a certain turning point, per capita CO2 emission began to fall with rising labor productivity up to the second tipping point, and then, a subsequent phase of deterioration. Heterogeneous characteristics are, however, detected over the N-shape EKC. Like the conclusion reached from the MMQREG, the pooled ordinary least squares (POLS), the fixed-effects (FE), the random-effects (RE), and the fully modified ordinary least squares (FMOLS) all confirmed the existence of the N-shape hypothesis.
{"title":"The Role of Labor Productivity in Reducing Carbon Emission Utilizing the Method of Moments Quantile Regression: Evidence from Top 40 Emitter Countries","authors":"Mohamed Khaled Al-Jafari, Hatem Hatef Abdulkadhim Altaee","doi":"10.5539/ijef.v15n3p1","DOIUrl":"https://doi.org/10.5539/ijef.v15n3p1","url":null,"abstract":"Global warming has become one of the most serious world-challenging issues nowadays, and much effort is being done to combat its consequences. Therefore, studying the trade-off between carbon emissions and economic activity remains an attractive subject for researchers. In this study, the environmental Kuznets curve (EKC) hypothesis is adopted to verify the trade-off between carbon dioxide emissions per capita and labor productivity in the top 40 emitter countries. Accordingly, a panel data from the top 40 emitter countries is employed from 1992 to 2018, and the novel method of moments quantile regression (MMQREG) is used to analyze the nexus among the variables. In addition, four robustness tests were used to validate the initial results. The findings reveal evidence for the N-shape EKC in the top 40 emitter countries. This indicates that economic growth initially will improve environmental quality up to a certain labor productivity level. However, after reaching a certain turning point, per capita CO2 emission began to fall with rising labor productivity up to the second tipping point, and then, a subsequent phase of deterioration. Heterogeneous characteristics are, however, detected over the N-shape EKC. Like the conclusion reached from the MMQREG, the pooled ordinary least squares (POLS), the fixed-effects (FE), the random-effects (RE), and the fully modified ordinary least squares (FMOLS) all confirmed the existence of the N-shape hypothesis.","PeriodicalId":37166,"journal":{"name":"International Journal of Economics and Finance Studies","volume":"5 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-02-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91092961","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}
In an recent article Amman and Tucci (2020) make a comparison of the two dominant approaches for solving models with optimal experimentation in economics; the value function approach and an approximation approach. The approximation approach goes back to engineering literature in the 1970ties (cf. Tse & Bar-Shalom, 1973). Kendrick (1981) introduces this approach in economics. By using the same model and dataset as in Beck and Wieland (2002), Amman and Tucci conclude that differences may be small between the both approaches. In the previous paper we did not present the derivation of the approximation approach for this class of models. Hence, here we will present all derivations of the approximation approach for the case where there is an infinite horizon as is most common in economic models. By presenting the derivations, a better understanding and insight is obtained by the reader on how the value function is adequately approximated.
{"title":"Approximating an Infinite Horizon Model in the Presence of Optimal Experimentation","authors":"H. Amman, M. Tucci","doi":"10.5539/ijef.v15n2p70","DOIUrl":"https://doi.org/10.5539/ijef.v15n2p70","url":null,"abstract":"In an recent article Amman and Tucci (2020) make a comparison of the two dominant approaches for solving models with optimal experimentation in economics; the value function approach and an approximation approach. The approximation approach goes back to engineering literature in the 1970ties (cf. Tse & Bar-Shalom, 1973). Kendrick (1981) introduces this approach in economics. By using the same model and dataset as in Beck and Wieland (2002), Amman and Tucci conclude that differences may be small between the both approaches. In the previous paper we did not present the derivation of the approximation approach for this class of models. Hence, here we will present all derivations of the approximation approach for the case where there is an infinite horizon as is most common in economic models. By presenting the derivations, a better understanding and insight is obtained by the reader on how the value function is adequately approximated.","PeriodicalId":37166,"journal":{"name":"International Journal of Economics and Finance Studies","volume":"38 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80334637","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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