Pub Date : 2023-04-29DOI: 10.20885/ejem.vol15.iss1.art8
A. K. Suresh, B. Seth, Samir Ranjan Behera, D. Rath
Purpose ─ This article explores the relationship between government revenue, government expenditure, and economic growth for nine emerging market economies using annual data from 1991-92 to 2019-20. Method ─ This paper distinguishes itself from the existing literature through the application of co-integration tests, vector error correction, DOLS and FMOLS for an empirical investigation of a unique panel data set of select emerging economies across Asia, Africa, Europe and Latin America. A bi-directional causal long-run relationship between economic growth and government expenditure, as well as between government expenditure and government revenue, was found using standard panel co-integration tests. Findings ─ The long-run elasticities computed using VECM were confirmed from DOLS as well as FMOLS estimates. A one per cent increase in expenditure and revenue, in the long run, would result in an increase in GDP by 0.94 and 0.90 per cent, respectively. Similarly, an increase in GDP by one per cent would lead to an increase in government expenditure by 1.1 per cent. On the other hand, an increase in government revenue by one per cent would cause a corresponding increase in government expenditure by nearly one per cent. The findings of this research point to a positive association between government revenue, expenditure, and economic growth, which will be valuable to policymakers. Contribution ─ Our combination of country selection covering economies from different continents is a first of its kind to the best of our knowledge. Another contribution is the application of panel cointegration and panel error correction techniques to fully use the panel data set, while most previous studies utilised the typical time series modelling with individual time series data.
{"title":"An empirical investigation of the relationship between government revenue, expenditure, and economic growth in selected EMEs","authors":"A. K. Suresh, B. Seth, Samir Ranjan Behera, D. Rath","doi":"10.20885/ejem.vol15.iss1.art8","DOIUrl":"https://doi.org/10.20885/ejem.vol15.iss1.art8","url":null,"abstract":"Purpose ─ This article explores the relationship between government revenue, government expenditure, and economic growth for nine emerging market economies using annual data from 1991-92 to 2019-20.\u0000Method ─ This paper distinguishes itself from the existing literature through the application of co-integration tests, vector error correction, DOLS and FMOLS for an empirical investigation of a unique panel data set of select emerging economies across Asia, Africa, Europe and Latin America. A bi-directional causal long-run relationship between economic growth and government expenditure, as well as between government expenditure and government revenue, was found using standard panel co-integration tests.\u0000Findings ─ The long-run elasticities computed using VECM were confirmed from DOLS as well as FMOLS estimates. A one per cent increase in expenditure and revenue, in the long run, would result in an increase in GDP by 0.94 and 0.90 per cent, respectively. Similarly, an increase in GDP by one per cent would lead to an increase in government expenditure by 1.1 per cent. On the other hand, an increase in government revenue by one per cent would cause a corresponding increase in government expenditure by nearly one per cent. The findings of this research point to a positive association between government revenue, expenditure, and economic growth, which will be valuable to policymakers.\u0000Contribution ─ Our combination of country selection covering economies from different continents is a first of its kind to the best of our knowledge. Another contribution is the application of panel cointegration and panel error correction techniques to fully use the panel data set, while most previous studies utilised the typical time series modelling with individual time series data.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"204 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2023-04-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82822489","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 : 2023-04-11DOI: 10.20885/ejem.vol15.iss1.art4
T. Ojeyinka, Anthonia Emoshokemhe Aliemhe
Purpose ― This study differs from previous studies by examining the impact of oil price components, namely oil demand, global oil supply, and oil market-specific demand, on the stock returns of five sectors (Banking, Consumer goods, Industrial, Insurance, and Oil and Gas) listed on the Nigerian Stock Exchange. Design/Method/Approach ― The study employs the Autoregressive Distributed Lag (ARDL) model on monthly data between January 2000 and December 2019. Findings ― The paper finds evidence of a long-run relationship between sectoral market returns and oil price changes in Nigeria. Further evidence from the study reveals that oil-specific demand and global oil demand have positive and significant effects on the aggregate stock returns and the returns of the sampled sectors. On the other hand, the impact of the global oil supply is inconsequential on the aggregate stock returns and sectoral returns except for the Oil and Gas sector, where the effect of global oil production is positive and significant. Implication ― The study concludes that stock market returns in Nigeria are sensitive and vulnerable to changes in demand-side components of oil price. The study also highlights important policy implications to enhance the performance of the Nigerian stock market. Originality/Value ― The paper examines the impact of disaggregated oil prices on sectoral returns of the five listed sectors on the Nigerian Stock Exchange, which has not been explored in the literature.
{"title":"Disaggregated crude oil prices and stock market behaviour in Nigeria: Evidence from sectorial analysis","authors":"T. Ojeyinka, Anthonia Emoshokemhe Aliemhe","doi":"10.20885/ejem.vol15.iss1.art4","DOIUrl":"https://doi.org/10.20885/ejem.vol15.iss1.art4","url":null,"abstract":"Purpose ― This study differs from previous studies by examining the impact of oil price components, namely oil demand, global oil supply, and oil market-specific demand, on the stock returns of five sectors (Banking, Consumer goods, Industrial, Insurance, and Oil and Gas) listed on the Nigerian Stock Exchange.\u0000Design/Method/Approach ― The study employs the Autoregressive Distributed Lag (ARDL) model on monthly data between January 2000 and December 2019.\u0000Findings ― The paper finds evidence of a long-run relationship between sectoral market returns and oil price changes in Nigeria. Further evidence from the study reveals that oil-specific demand and global oil demand have positive and significant effects on the aggregate stock returns and the returns of the sampled sectors. On the other hand, the impact of the global oil supply is inconsequential on the aggregate stock returns and sectoral returns except for the Oil and Gas sector, where the effect of global oil production is positive and significant.\u0000Implication ― The study concludes that stock market returns in Nigeria are sensitive and vulnerable to changes in demand-side components of oil price. The study also highlights important policy implications to enhance the performance of the Nigerian stock market.\u0000Originality/Value ― The paper examines the impact of disaggregated oil prices on sectoral returns of the five listed sectors on the Nigerian Stock Exchange, which has not been explored in the literature.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"69 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2023-04-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76607634","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 : 2023-04-11DOI: 10.20885/ejem.vol15.iss1.art5
Purpose ─ This paper analyzes the determinants of micro and small enterprise company performance and its employees in Indonesia using a data set covering 2010 – 2019. Method ─ This study uses the robust estimation of the panel data regression method to estimate an alternative least squares regression that does not require strict assumptions and is not sensitive to outliers. Findings ─ The study's findings are as follows: 1) Improving resources, markets, entrepreneurs, and institutions has different impacts on business performance and workers' compensation due to the complexity and size of businesses, 2) The formal education of micro and small business entrepreneurship and institutionalization of partnerships have improved workers' compensation but not business performance, 3) Improving resource access, market orientation, and policies indirectly implemented by the Creative Economy Agency have improved business performance but not workers' compensation. Therefore, programs aimed at enhancing productivity of entrepreneurs and workers through partnerships are a key factor in improving the competitiveness of micro and small enterprises. Originality ─ Four determinants of the business environment of micro and small enterprises were analyzed to determine their impact on entrepreneur and worker performance, in order to identify the key factors contributing to the successful empowerment of these businesses.
{"title":"Intensity of the creative economy agency and partnership in empowering micro and small enterprises","authors":"","doi":"10.20885/ejem.vol15.iss1.art5","DOIUrl":"https://doi.org/10.20885/ejem.vol15.iss1.art5","url":null,"abstract":"Purpose ─ This paper analyzes the determinants of micro and small enterprise company performance and its employees in Indonesia using a data set covering 2010 – 2019.\u0000Method ─ This study uses the robust estimation of the panel data regression method to estimate an alternative least squares regression that does not require strict assumptions and is not sensitive to outliers.\u0000Findings ─ The study's findings are as follows: 1) Improving resources, markets, entrepreneurs, and institutions has different impacts on business performance and workers' compensation due to the complexity and size of businesses, 2) The formal education of micro and small business entrepreneurship and institutionalization of partnerships have improved workers' compensation but not business performance, 3) Improving resource access, market orientation, and policies indirectly implemented by the Creative Economy Agency have improved business performance but not workers' compensation. Therefore, programs aimed at enhancing productivity of entrepreneurs and workers through partnerships are a key factor in improving the competitiveness of micro and small enterprises.\u0000Originality ─ Four determinants of the business environment of micro and small enterprises were analyzed to determine their impact on entrepreneur and worker performance, in order to identify the key factors contributing to the successful empowerment of these businesses.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"19 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2023-04-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82962134","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 : 2023-04-10DOI: 10.20885/ejem.vol15.iss1.art3
A. Abimanyu, M. Imansyah, Muhammad Adisurya Pratama
Purpose ― This paper estimates the possibility of a financial crisis in Indonesia using an early warning system (EWMS) model. Method ― A quantitative EWMS model has been developed to detect a potential financial crisis in 2023 based on the econometric logistic probability model (Logit) Findings ― Based on the model estimates, Indonesia is expected to enter a financial crisis without adequate macroeconomic policies in the next 12 to 24 months. In recent years, Indonesia has implemented prudent macroeconomic policies such as increasing the Bank Indonesia policy rate and sustaining the state budget to avoid the impact of a deep financial crisis. Implications ― To avoid the potential for further financial crises, Indonesia must implement a wider range of crisis mitigation policies. Originality/value ― Although many argue that financial crises are predictable, it has been demonstrated in the literature that little is known about how to prevent them. This paper contributes to providing empirical evidence to address these issues.
{"title":"Will Indonesia enter the 2023 financial crisis? Application of early warning model system","authors":"A. Abimanyu, M. Imansyah, Muhammad Adisurya Pratama","doi":"10.20885/ejem.vol15.iss1.art3","DOIUrl":"https://doi.org/10.20885/ejem.vol15.iss1.art3","url":null,"abstract":"Purpose ― This paper estimates the possibility of a financial crisis in Indonesia using an early warning system (EWMS) model.\u0000Method ― A quantitative EWMS model has been developed to detect a potential financial crisis in 2023 based on the econometric logistic probability model (Logit)\u0000Findings ― Based on the model estimates, Indonesia is expected to enter a financial crisis without adequate macroeconomic policies in the next 12 to 24 months. In recent years, Indonesia has implemented prudent macroeconomic policies such as increasing the Bank Indonesia policy rate and sustaining the state budget to avoid the impact of a deep financial crisis.\u0000Implications ― To avoid the potential for further financial crises, Indonesia must implement a wider range of crisis mitigation policies.\u0000Originality/value ― Although many argue that financial crises are predictable, it has been demonstrated in the literature that little is known about how to prevent them. This paper contributes to providing empirical evidence to address these issues.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"40 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2023-04-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81133579","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 : 2023-04-06DOI: 10.20885/ejem.vol15.iss1.art1
Selçuk Akçay
Purpose ― Over the past two decades since the 2000s, Turkey's private savings rates have decreased, which has become a concern for policymakers. In addition to considering the key determinants of private savings, this study primarily aims to quantify the linear and nonlinear impacts of financial development on private savings from 1980 to 2015. Method ― This study uses Autoregressive Distributed Lag (ARDL) procedure and the Fourier Toda-Yamamoto causality framework. Findings ― The main findings are as follows: 1) The ARDL bounds test supports the presence of a long-run equilibrium relationship between private savings and its determinants; 2) Financial development affects private savings nonlinearly in an inverted U-shaped pattern, and 3) No causality relationship is observed between private savings and financial development. Implication ― As financial development has an inverted U-shaped relationship with private savings, indicating that the complementary effect of financial development is replaced with a substitution effect after a certain threshold level, Turkish authorities should consider this evidence when tailoring policies regarding financial markets. Originality ― This study is the first to identify whether the relationship between private savings and financial development is linear or nonlinear in the context of an emerging economy in Turkey.
{"title":"The determinants of private savings in Turkey: The role of financial development","authors":"Selçuk Akçay","doi":"10.20885/ejem.vol15.iss1.art1","DOIUrl":"https://doi.org/10.20885/ejem.vol15.iss1.art1","url":null,"abstract":"Purpose ― Over the past two decades since the 2000s, Turkey's private savings rates have decreased, which has become a concern for policymakers. In addition to considering the key determinants of private savings, this study primarily aims to quantify the linear and nonlinear impacts of financial development on private savings from 1980 to 2015.\u0000Method ― This study uses Autoregressive Distributed Lag (ARDL) procedure and the Fourier Toda-Yamamoto causality framework.\u0000Findings ― The main findings are as follows: 1) The ARDL bounds test supports the presence of a long-run equilibrium relationship between private savings and its determinants; 2) Financial development affects private savings nonlinearly in an inverted U-shaped pattern, and 3) No causality relationship is observed between private savings and financial development.\u0000Implication ― As financial development has an inverted U-shaped relationship with private savings, indicating that the complementary effect of financial development is replaced with a substitution effect after a certain threshold level, Turkish authorities should consider this evidence when tailoring policies regarding financial markets.\u0000Originality ― This study is the first to identify whether the relationship between private savings and financial development is linear or nonlinear in the context of an emerging economy in Turkey.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"2004 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2023-04-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82947486","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 : 2023-04-06DOI: 10.20885/ejem.vol15.iss1.art2
Arab Dahir Hassan, Esra Dil
Purpose ― The main objective of this study is to explore the relationship between bilateral official development assistance and the export of Turkey to 18 Turkish aid recipient countries between 1998 and 2019. Methods ― The study employs the gravity model of international trade to capture the effect of official development assistance on Turkish export to its aid recipient countries and utilizes Panel data econometric analysis. Findings ― The official development assistance (ODA) remains statistically significant across the models, indicating that ODA is one of the significant drivers of Turkish bilateral trade with the aid recipient countries. Implications ― The study argues that Turkey applied ODA as a foreign policy tool to access new markets in the Middle East, Balkans, Africa, and Asia. Turkish exports to developing countries increased due to the upsurged country's foreign aid donation to its recipients. Originality ― This study deviates from other studies in the literature by empirically examining the relationship between bilateral Official development assistance and the export of Turkey.
{"title":"Empirical analysis of the impact of Turkish bilateral official development assistance on export","authors":"Arab Dahir Hassan, Esra Dil","doi":"10.20885/ejem.vol15.iss1.art2","DOIUrl":"https://doi.org/10.20885/ejem.vol15.iss1.art2","url":null,"abstract":"Purpose ― The main objective of this study is to explore the relationship between bilateral official development assistance and the export of Turkey to 18 Turkish aid recipient countries between 1998 and 2019.\u0000Methods ― The study employs the gravity model of international trade to capture the effect of official development assistance on Turkish export to its aid recipient countries and utilizes Panel data econometric analysis.\u0000Findings ― The official development assistance (ODA) remains statistically significant across the models, indicating that ODA is one of the significant drivers of Turkish bilateral trade with the aid recipient countries.\u0000Implications ― The study argues that Turkey applied ODA as a foreign policy tool to access new markets in the Middle East, Balkans, Africa, and Asia. Turkish exports to developing countries increased due to the upsurged country's foreign aid donation to its recipients.\u0000Originality ― This study deviates from other studies in the literature by empirically examining the relationship between bilateral Official development assistance and the export of Turkey.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"29 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2023-04-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81351472","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 : 2022-10-31DOI: 10.20885/ejem.vol14.iss2.art10
Adawiya Taufani, D. Hakim, W. Widyastutik
Purpose ― This study examines the impact of oil price shocks on macroeconomic indicators, namely real GDP, real exchange rates, inflation, real interest rates, the balance of payments, and unemployment rates in four ASEAN countries, namely Brunei Darussalam, Malaysia, Indonesia, and Thailand. Methods ― This research uses a Vector Error Correction Model (VECM). The oil price variable in this study was divided into two, namely, the increase and decrease in oil prices based on the Mork transformation. Findings ― The analysis showed that the impact of price increases tended to encourage the economy of Brunei Darussalam and Malaysia. The shock of falling oil prices tended to cause a decline in the economy of Brunei Darussalam and Malaysia. The shock of rising prices tended to hamper the economies of Indonesia and Thailand. The shock of falling oil prices did not always positively impact the economy of the importing country, especially for the balance of payments. Implication ― These results show that price shocks will produce different economic responses. Understanding a country's macroeconomic framework is important before implementing effective policies. Originality ― These results expand the literature on the impact of oil price shocks on macroeconomic indicators in developing countries and small open economies, while studies related to macroeconomics generally focus on growth and inflation. This study also distinguishes oil price shocks into rising and falling oil price shocks using the Mork transformation.
{"title":"The impact of oil price shocks on macroeconomic indicators: Evidence from four ASEAN countries","authors":"Adawiya Taufani, D. Hakim, W. Widyastutik","doi":"10.20885/ejem.vol14.iss2.art10","DOIUrl":"https://doi.org/10.20885/ejem.vol14.iss2.art10","url":null,"abstract":"Purpose ― This study examines the impact of oil price shocks on macroeconomic indicators, namely real GDP, real exchange rates, inflation, real interest rates, the balance of payments, and unemployment rates in four ASEAN countries, namely Brunei Darussalam, Malaysia, Indonesia, and Thailand.\u0000Methods ― This research uses a Vector Error Correction Model (VECM). The oil price variable in this study was divided into two, namely, the increase and decrease in oil prices based on the Mork transformation.\u0000Findings ― The analysis showed that the impact of price increases tended to encourage the economy of Brunei Darussalam and Malaysia. The shock of falling oil prices tended to cause a decline in the economy of Brunei Darussalam and Malaysia. The shock of rising prices tended to hamper the economies of Indonesia and Thailand. The shock of falling oil prices did not always positively impact the economy of the importing country, especially for the balance of payments.\u0000Implication ― These results show that price shocks will produce different economic responses. Understanding a country's macroeconomic framework is important before implementing effective policies.\u0000Originality ― These results expand the literature on the impact of oil price shocks on macroeconomic indicators in developing countries and small open economies, while studies related to macroeconomics generally focus on growth and inflation. This study also distinguishes oil price shocks into rising and falling oil price shocks using the Mork transformation.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"1 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2022-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83097155","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 : 2022-10-31DOI: 10.20885/ejem.vol14.iss2.art8
M. A. Khattak, Mohsin Ali, Noureen A. Khan
Purpose ― This paper examines banking competition's effect on Malaysia's financial performance from 2008–2020. This study investigates the relationship between banks' market competition and financial performance by examining banks' profits and risks. Further, this current study examines whether the association differs for Islamic banks. Methods ― The research studies Malaysia as a sample country and employs a data span from 2008-2020. In order to address omitted variable bias, simultaneity and endogeneity are avoided using a two-step GMM model. Findings ― Our results recommend that more competition inspires the banking sector to invest in risky ventures to offset the losses in revenues. Moreover, banking today is still based on basic banking operations like granting loans (or financing in Islamic banks), collecting deposits, and managing payment systems. Implication ― Since our findings show a negative effect of competition on the bank's financial performance, we suggest that competition lowers banks' profits and results in greater risk. It is suggested that regulators and policymakers develop the financial infrastructure in terms of controlled competition in banking and encourage banks to diversify their operations efficiently. We find no significant difference in the association between conventional and Islamic banking. Originality ― This research is the first to examine the effect of bank competition on the financial performance of a developed dual banking system using the efficiency-adjusted Lerner index.
{"title":"Competition and banks' financial performance in dual banking: Evidence from efficiency-adjusted market power","authors":"M. A. Khattak, Mohsin Ali, Noureen A. Khan","doi":"10.20885/ejem.vol14.iss2.art8","DOIUrl":"https://doi.org/10.20885/ejem.vol14.iss2.art8","url":null,"abstract":"Purpose ― This paper examines banking competition's effect on Malaysia's financial performance from 2008–2020. This study investigates the relationship between banks' market competition and financial performance by examining banks' profits and risks. Further, this current study examines whether the association differs for Islamic banks.\u0000Methods ― The research studies Malaysia as a sample country and employs a data span from 2008-2020. In order to address omitted variable bias, simultaneity and endogeneity are avoided using a two-step GMM model.\u0000Findings ― Our results recommend that more competition inspires the banking sector to invest in risky ventures to offset the losses in revenues. Moreover, banking today is still based on basic banking operations like granting loans (or financing in Islamic banks), collecting deposits, and managing payment systems.\u0000Implication ― Since our findings show a negative effect of competition on the bank's financial performance, we suggest that competition lowers banks' profits and results in greater risk. It is suggested that regulators and policymakers develop the financial infrastructure in terms of controlled competition in banking and encourage banks to diversify their operations efficiently. We find no significant difference in the association between conventional and Islamic banking.\u0000Originality ― This research is the first to examine the effect of bank competition on the financial performance of a developed dual banking system using the efficiency-adjusted Lerner index.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"432 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2022-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79647980","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 : 2022-10-31DOI: 10.20885/ejem.vol14.iss2.art9
T. Osinubi, F. Ajide
Purpose ― In this study, we investigate the impact of foreign direct investment (FDI) on economic complexity in MINT and BRICS countries. Methodology ― Data on economic complexity from MIT’s Observatory of Economic Complexity and data on FDI and other determinants of economic complexity are sourced from World Development indicators which spanned between 1991 and 2020. The countries are divided into three categories: All countries pooled together, MINT and BRICS countries. We employ panel co-integrating regression. Findings ― Findings based on panel co-integration regression show that foreign direct investment positively impacts economic complexity in all the countries and MINT countries, while its impact is negative in BRICS countries. Originality ― This study adds value to the literature by scrutinizing the nexus between FDI and economic complexity in the context of emerging economies and employs the panel co-integration technique for robust analysis. The study's findings shed light on the need for governments in developing countries to implement appropriate policies encouraging FDI inflows into their respective countries. Contributing to the host country's economic complexity, FDI inflows should be focused on highly technical investment and, most importantly, should be selective to enhance the development of priority sectors. An investment promotion policy may be required to encourage foreign investment in the host country.
{"title":"Foreign direct investment and economic complexity in emerging economies","authors":"T. Osinubi, F. Ajide","doi":"10.20885/ejem.vol14.iss2.art9","DOIUrl":"https://doi.org/10.20885/ejem.vol14.iss2.art9","url":null,"abstract":"Purpose ― In this study, we investigate the impact of foreign direct investment (FDI) on economic complexity in MINT and BRICS countries.\u0000Methodology ― Data on economic complexity from MIT’s Observatory of Economic Complexity and data on FDI and other determinants of economic complexity are sourced from World Development indicators which spanned between 1991 and 2020. The countries are divided into three categories: All countries pooled together, MINT and BRICS countries. We employ panel co-integrating regression.\u0000Findings ― Findings based on panel co-integration regression show that foreign direct investment positively impacts economic complexity in all the countries and MINT countries, while its impact is negative in BRICS countries.\u0000Originality ― This study adds value to the literature by scrutinizing the nexus between FDI and economic complexity in the context of emerging economies and employs the panel co-integration technique for robust analysis. The study's findings shed light on the need for governments in developing countries to implement appropriate policies encouraging FDI inflows into their respective countries. Contributing to the host country's economic complexity, FDI inflows should be focused on highly technical investment and, most importantly, should be selective to enhance the development of priority sectors. An investment promotion policy may be required to encourage foreign investment in the host country.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"140 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2022-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89128763","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 : 2022-10-27DOI: 10.20885/ejem.vol14.iss2.art6
Marwa Trabelsi, Slah Bahloul
Purpose ― This article explores the causal link between stock and currency returns in The Middle Eastern and North African (MENA) countries from January 2011 through February 2020. Methods ― This study uses the Vector autoregressive (VAR) and the Markov switching vector autoregressive (MS-VAR) models to investigate the dynamic causality between equity and exchange rate markets. Findings ― Results indicate that this relation depends on the state of the markets. Furthermore, generally, equity returns have a significant impact on the currency markets, whatever the market state. Implication ― Regime shifts in the relationship between stock and exchange rate markets are significant for portfolio allocation because they help investors improve their investment decisions through knowledge of the dynamic link between these markets. Originality ― This study adds to the literature on the relationship between exchange rates and stock prices in the MENA countries, which have become attractive destinations for international investors due to their higher returns.
{"title":"Stock and exchange rate movements in the MENA countries: A Markov Switching –VAR Model","authors":"Marwa Trabelsi, Slah Bahloul","doi":"10.20885/ejem.vol14.iss2.art6","DOIUrl":"https://doi.org/10.20885/ejem.vol14.iss2.art6","url":null,"abstract":"Purpose ― This article explores the causal link between stock and currency returns in The Middle Eastern and North African (MENA) countries from January 2011 through February 2020.\u0000Methods ― This study uses the Vector autoregressive (VAR) and the Markov switching vector autoregressive (MS-VAR) models to investigate the dynamic causality between equity and exchange rate markets.\u0000Findings ― Results indicate that this relation depends on the state of the markets. Furthermore, generally, equity returns have a significant impact on the currency markets, whatever the market state.\u0000Implication ― Regime shifts in the relationship between stock and exchange rate markets are significant for portfolio allocation because they help investors improve their investment decisions through knowledge of the dynamic link between these markets.\u0000Originality ― This study adds to the literature on the relationship between exchange rates and stock prices in the MENA countries, which have become attractive destinations for international investors due to their higher returns.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"24 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2022-10-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81685954","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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