Pub Date : 2022-10-05DOI: 10.20885/ejem.vol14.iss2.art4
J. Marire
Purpose ― The paper investigated the effect of the interaction of fiscal deficits and total factor productivity (TFP) and fiscal deficits and the wage share on unemployment. Methods ― The paper applied an autoregressive distributed lag model to South African annual data from 1991-2019. Findings ― First, increases in fiscal deficits increase unemployment at all levels of TFP and wage share. Second, increases in TFP increase unemployment at different levels of fiscal deficit, but after the global economic recession, the rate of increase in unemployment declined significantly. This means that the interaction of rising TFP and fiscal deficits in South Africa, where the growth regime is profit-led and technology-driven, always results in increasing unemployment. Third, as the wage share increases, unemployment increases, at all levels of fiscal deficits, suggesting that a wage-led growth regime is no panacea to unemployment either. Implications ― The findings imply that expansionary fiscal policy does not necessarily create an economy that works for all unless active labour market institutions are set up. The findings challenge the notion that the solution to unemployment in South Africa is wage flexibility. Neither do the findings support the idea that following a profit-led growth path is a solution. A balanced mix of the two growth regimes would work. Originality ― Studies have considered the productivity-enhancing effects of structural fiscal policy, but they have not considered the possible effects of interactions between productivity, fiscal policy and wage shares. The paper addresses the gap by introducing the interactions of TFP and fiscal deficits, as well as the interaction of wage share and fiscal deficits.
{"title":"Unemployment, total factor productivity, budget deficit, and wage share in South Africa","authors":"J. Marire","doi":"10.20885/ejem.vol14.iss2.art4","DOIUrl":"https://doi.org/10.20885/ejem.vol14.iss2.art4","url":null,"abstract":"Purpose ― The paper investigated the effect of the interaction of fiscal deficits and total factor productivity (TFP) and fiscal deficits and the wage share on unemployment.\u0000Methods ― The paper applied an autoregressive distributed lag model to South African annual data from 1991-2019.\u0000Findings ― First, increases in fiscal deficits increase unemployment at all levels of TFP and wage share. Second, increases in TFP increase unemployment at different levels of fiscal deficit, but after the global economic recession, the rate of increase in unemployment declined significantly. This means that the interaction of rising TFP and fiscal deficits in South Africa, where the growth regime is profit-led and technology-driven, always results in increasing unemployment. Third, as the wage share increases, unemployment increases, at all levels of fiscal deficits, suggesting that a wage-led growth regime is no panacea to unemployment either.\u0000Implications ― The findings imply that expansionary fiscal policy does not necessarily create an economy that works for all unless active labour market institutions are set up. The findings challenge the notion that the solution to unemployment in South Africa is wage flexibility. Neither do the findings support the idea that following a profit-led growth path is a solution. A balanced mix of the two growth regimes would work.\u0000Originality ― Studies have considered the productivity-enhancing effects of structural fiscal policy, but they have not considered the possible effects of interactions between productivity, fiscal policy and wage shares. The paper addresses the gap by introducing the interactions of TFP and fiscal deficits, as well as the interaction of wage share and fiscal deficits.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"23 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2022-10-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77795270","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 : 2022-10-05DOI: 10.20885/ejem.vol14.iss2.art5
Pınar Avcı, M. Çetin
Purpose ― Mishkin’s hypothesis suggests that globalization appears to be a vital factor in stimulating the development of the financial system. The study examines this hypothesis for the Turkish economy from 1970 to 2017. It focuses on the link between financial globalization and financial development by integrating economic growth, inflation, and natural resource rent as additional determinants into the financial development specification. Methods ― The Ng-Perron and Vogelsang-Perron unit root tests are used to check the stationarity of variables. The cointegration analysis is performed using the Hatemi-J and ARDL bounds testing procedures. Findings ― The main empirical results show that the series are cointegrated under structural breaks; in the long run, financial globalization and economic growth increase financial development while inflation and natural resource rent negatively affect financial development. A unidirectional causality exists from financial globalization and economic growth to financial development. At the same time, there is bidirectional causality between inflation and financial development, natural resource rent, and financial development. Implications ― The empirical findings can present important recommendations for policymakers. Originality ― Very few time-series studies include Turkey’s economy and structural breaks.
{"title":"Structural breaks, financial globalization, and financial development: Evidence from Turkey","authors":"Pınar Avcı, M. Çetin","doi":"10.20885/ejem.vol14.iss2.art5","DOIUrl":"https://doi.org/10.20885/ejem.vol14.iss2.art5","url":null,"abstract":"Purpose ― Mishkin’s hypothesis suggests that globalization appears to be a vital factor in stimulating the development of the financial system. The study examines this hypothesis for the Turkish economy from 1970 to 2017. It focuses on the link between financial globalization and financial development by integrating economic growth, inflation, and natural resource rent as additional determinants into the financial development specification.\u0000Methods ― The Ng-Perron and Vogelsang-Perron unit root tests are used to check the stationarity of variables. The cointegration analysis is performed using the Hatemi-J and ARDL bounds testing procedures.\u0000Findings ― The main empirical results show that the series are cointegrated under structural breaks; in the long run, financial globalization and economic growth increase financial development while inflation and natural resource rent negatively affect financial development. A unidirectional causality exists from financial globalization and economic growth to financial development. At the same time, there is bidirectional causality between inflation and financial development, natural resource rent, and financial development.\u0000Implications ― The empirical findings can present important recommendations for policymakers.\u0000Originality ― Very few time-series studies include Turkey’s economy and structural breaks.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"283 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2022-10-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76825982","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 : 2022-10-05DOI: 10.20885/ejem.vol14.iss2.art2
J. Iqbal, Misbah Nosheen, M. Wohar
: Many of the early studies that investigate the impact of exchange rate movements on domestic production report mixed findings in terms of the effect on economic growth. However, the majority of these studies had were limited in that they relied on a prior assumption of linear adjustment of the exchange rate fluctuations toward domestic output. We suspect that a prior assumption of linearity may mask the empirical results. We, therefore, bring nonlinearity into the adjustment process through the partial sum approach to the exchange rate by decomposing the exchange rate into depreciation and appreciation. We investigate both the symmetric and asymmetric effect of exchange rate changes on economic growth of the selected South Asian economies. Our results show significant evidence of the asymmetric effects of exchange rate changes on domestic production both in the short and long run in the case of all the selected economies.
{"title":"Revisiting the asymmetry between the exchange rate and domestic production in South Asian Economies: Evidence from Nonlinear ARDL Approach","authors":"J. Iqbal, Misbah Nosheen, M. Wohar","doi":"10.20885/ejem.vol14.iss2.art2","DOIUrl":"https://doi.org/10.20885/ejem.vol14.iss2.art2","url":null,"abstract":": Many of the early studies that investigate the impact of exchange rate movements on domestic production report mixed findings in terms of the effect on economic growth. However, the majority of these studies had were limited in that they relied on a prior assumption of linear adjustment of the exchange rate fluctuations toward domestic output. We suspect that a prior assumption of linearity may mask the empirical results. We, therefore, bring nonlinearity into the adjustment process through the partial sum approach to the exchange rate by decomposing the exchange rate into depreciation and appreciation. We investigate both the symmetric and asymmetric effect of exchange rate changes on economic growth of the selected South Asian economies. Our results show significant evidence of the asymmetric effects of exchange rate changes on domestic production both in the short and long run in the case of all the selected economies.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"68 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2022-10-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90831013","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 : 2022-10-05DOI: 10.20885/ejem.vol14.iss2.art3
G. Asante, Kofi Kamasa, Myles Bartlett
Purpose ― This paper sought to investigate the interactive effect of corruption and FDI on economic growth in the Economic Community of West African States (ECOWAS) region empirically. Methods ― With panel data spanning 2000–2019 across 15 ECOWAS countries, this paper estimates its results by employing the system-GMM estimator, which combines a system of regressions in difference and in levels to resolve the problem of endogeneity. Findings ― Results reveal that while FDI independently spurs economic growth, control of corruption has no direct effect on growth in the region. The interactive effects reveal the complementarity between FDI and control of corruption in promoting economic growth in the ECOWAS region. The growth effect of FDI is larger and stronger given an improvement in the control of corruption across the 1st, 5th, 10th, and 25th percentiles. Implication ― To improve investor confidence, bolster FDI inflows and optimize its beneficial impacts on economic growth, this paper calls for measures to increase transparency and stronger political commitment to strictly investigate, prosecute and punish corruption in the ECOWAS region. Originality/value ― Although foreign direct investment (FDI) to host countries have been shown in the literature to be a crucial driver of economic growth, little is known about how anti-corruption measures affect the FDI-growth relationship. This paper contributes to policy by providing empirical evidence to bridge this gap.
{"title":"Foreign direct investment and economic growth nexus in ECOWAS: The leveraging effect of anti-corruption","authors":"G. Asante, Kofi Kamasa, Myles Bartlett","doi":"10.20885/ejem.vol14.iss2.art3","DOIUrl":"https://doi.org/10.20885/ejem.vol14.iss2.art3","url":null,"abstract":"Purpose ― This paper sought to investigate the interactive effect of corruption and FDI on economic growth in the Economic Community of West African States (ECOWAS) region empirically.\u0000Methods ― With panel data spanning 2000–2019 across 15 ECOWAS countries, this paper estimates its results by employing the system-GMM estimator, which combines a system of regressions in difference and in levels to resolve the problem of endogeneity.\u0000Findings ― Results reveal that while FDI independently spurs economic growth, control of corruption has no direct effect on growth in the region. The interactive effects reveal the complementarity between FDI and control of corruption in promoting economic growth in the ECOWAS region. The growth effect of FDI is larger and stronger given an improvement in the control of corruption across the 1st, 5th, 10th, and 25th percentiles.\u0000Implication ― To improve investor confidence, bolster FDI inflows and optimize its beneficial impacts on economic growth, this paper calls for measures to increase transparency and stronger political commitment to strictly investigate, prosecute and punish corruption in the ECOWAS region.\u0000Originality/value ― Although foreign direct investment (FDI) to host countries have been shown in the literature to be a crucial driver of economic growth, little is known about how anti-corruption measures affect the FDI-growth relationship. This paper contributes to policy by providing empirical evidence to bridge this gap.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"46 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2022-10-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82655908","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 : 2022-10-05DOI: 10.20885/ejem.vol14.iss2.art1
E. Ogbaro, Ademola Obafemi Young, Rebecca Folake Bank-Ola
Purpose ― This study contributes to the empirical literature on the nonlinear relationship between public debt and economic growth in Nigeria using threshold regression methodology. It provides insight into how Nigeria can grow out of debt sustainably in the face of the prevailing level of corruption as an institutional indicator. Method ― Stata's threshold command is used for data analysis, and this command fits time-series threshold models in finding the optimal number of thresholds. It does this by minimising an information criterion and using conditional least squares to estimate the parameters of the threshold regression model. Findings ― The results show that the relationship between public debt and economic growth is nonlinear. The threshold effect of public debt on growth depends on the debt-to-GDP ratio and the level of corruption. Substantial evidence supports two threshold levels of debt-to-GDP ratio and corruption in the debt-growth nexus. The two threshold levels of corruption are 63.21 and 64.27 (on a scale of 0 to 100), with the growth effect of public debt being positive and significant in the second regime only. Implication ― Public debt exerts significant positive effects on growth as long as corruption is kept at a moderate level. Thus, the government of Nigeria needs to ensure that corruption is pegged at a fairly moderate level that will guarantee the positive contribution of accumulated debt to economic growth. Originality ― Unlike previous works, the study addresses the problem caused by the mechanical effect of a change in the real GDP growth rate on debt. It is based on the assumption of a maximum of two thresholds.
{"title":"Revisiting the threshold effect of corruption in the link between public debt and economic growth in Nigeria","authors":"E. Ogbaro, Ademola Obafemi Young, Rebecca Folake Bank-Ola","doi":"10.20885/ejem.vol14.iss2.art1","DOIUrl":"https://doi.org/10.20885/ejem.vol14.iss2.art1","url":null,"abstract":"Purpose ― This study contributes to the empirical literature on the nonlinear relationship between public debt and economic growth in Nigeria using threshold regression methodology. It provides insight into how Nigeria can grow out of debt sustainably in the face of the prevailing level of corruption as an institutional indicator.\u0000Method ― Stata's threshold command is used for data analysis, and this command fits time-series threshold models in finding the optimal number of thresholds. It does this by minimising an information criterion and using conditional least squares to estimate the parameters of the threshold regression model.\u0000Findings ― The results show that the relationship between public debt and economic growth is nonlinear. The threshold effect of public debt on growth depends on the debt-to-GDP ratio and the level of corruption. Substantial evidence supports two threshold levels of debt-to-GDP ratio and corruption in the debt-growth nexus. The two threshold levels of corruption are 63.21 and 64.27 (on a scale of 0 to 100), with the growth effect of public debt being positive and significant in the second regime only.\u0000Implication ― Public debt exerts significant positive effects on growth as long as corruption is kept at a moderate level. Thus, the government of Nigeria needs to ensure that corruption is pegged at a fairly moderate level that will guarantee the positive contribution of accumulated debt to economic growth.\u0000Originality ― Unlike previous works, the study addresses the problem caused by the mechanical effect of a change in the real GDP growth rate on debt. It is based on the assumption of a maximum of two thresholds.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"22 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2022-10-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74416484","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 : 2022-05-19DOI: 10.20885/ejem.vol14.iss1.art11
Muhammad Ryan Sanjaya
Purpose ― This study investigates antisocial behaviour where participants made payoff destruction decisions (“money burning”) that are conditional on the co-participant being a human or a computer. Methods ― This study uses the joy-of-destruction minigame experiment with Indonesian citizens living in Australia as the participants. Regression methods are used to observe whether discrimination occurs and to identify factors associated with antisocial behaviour. Findings ― This study finds money burning against the computer to be more prevalent than against humans. There was very limited support that such behaviour was correlated with demographic characteristics or subjective norms, suggesting that the presence of a computer co-participant drives the result. Implications ― The results have a methodological implication for experimental economics where experimenters should anticipate that computer players may have an unforeseen impact on human behaviour. Policy-wise, the study shows a relatively cohesive community which may be driven by the multicultural policy of Australia. Originality ― This is the first antisocial behaviour economics experiment that includes a computer as a potential co-participant.
{"title":"Rage against the machine: A money-burning field experiment","authors":"Muhammad Ryan Sanjaya","doi":"10.20885/ejem.vol14.iss1.art11","DOIUrl":"https://doi.org/10.20885/ejem.vol14.iss1.art11","url":null,"abstract":"Purpose ― This study investigates antisocial behaviour where participants made payoff destruction decisions (“money burning”) that are conditional on the co-participant being a human or a computer.\u0000Methods ― This study uses the joy-of-destruction minigame experiment with Indonesian citizens living in Australia as the participants. Regression methods are used to observe whether discrimination occurs and to identify factors associated with antisocial behaviour.\u0000Findings ― This study finds money burning against the computer to be more prevalent than against humans. There was very limited support that such behaviour was correlated with demographic characteristics or subjective norms, suggesting that the presence of a computer co-participant drives the result.\u0000Implications ― The results have a methodological implication for experimental economics where experimenters should anticipate that computer players may have an unforeseen impact on human behaviour. Policy-wise, the study shows a relatively cohesive community which may be driven by the multicultural policy of Australia.\u0000Originality ― This is the first antisocial behaviour economics experiment that includes a computer as a potential co-participant.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"50 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2022-05-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76428729","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 : 2022-04-28DOI: 10.20885/ejem.vol14.iss1.art4
M. Yasin, D. Sari
Purpose ― We examine whether the foreign direct investment (FDI) in promoting technical efficiency is controlled by the sector classifications based on the technology intensity (High Technology, Medium-High Technology, Medium-Low Technology, and Low Technology). Methods ― We use the Indonesian firm-level dataset of the large and medium manufacturing survey from 2007 to 2015 and employ the time-varying stochastic production frontier. Findings ― We reveal that FDI, technology intensity and absorptive Capacity significantly affect firms' production and efficiency. We also found that the Indonesian manufacturing industry from 2007 to 2015 experienced positive Total Factor Productivity growth, where High-Technology sectors experienced the largest magnitude among others. Meanwhile, technological progress stemming from FDI is enjoyed more by Low Technology sectors. Meaning to say, technology intensity classification does not matter to technological progress. Implication ― The host country's government should focus on industries with high technical capabilities to accelerate FDI gains for the firms. Simultaneously, human capital improvement also needs to be intensified, for instance, through training or human development, so that firms with lower technical capability can catch up and, consequently, receive similar benefits from FDI activities. Originality ― Our study accommodates the research gap by including the FDI effect in both productivity and efficiency in a single equation. Many studies merely categorize technology intensity following the stochastic production frontier estimation to obtain technical efficiency or TFP growth. In this sense, those studies did not control the impact of the technology-specific effect.
{"title":"Foreign direct investment, efficiency, and total factor productivity: Does technology intensity classification matter?","authors":"M. Yasin, D. Sari","doi":"10.20885/ejem.vol14.iss1.art4","DOIUrl":"https://doi.org/10.20885/ejem.vol14.iss1.art4","url":null,"abstract":"Purpose ― We examine whether the foreign direct investment (FDI) in promoting technical efficiency is controlled by the sector classifications based on the technology intensity (High Technology, Medium-High Technology, Medium-Low Technology, and Low Technology).\u0000Methods ― We use the Indonesian firm-level dataset of the large and medium manufacturing survey from 2007 to 2015 and employ the time-varying stochastic production frontier.\u0000Findings ― We reveal that FDI, technology intensity and absorptive Capacity significantly affect firms' production and efficiency. We also found that the Indonesian manufacturing industry from 2007 to 2015 experienced positive Total Factor Productivity growth, where High-Technology sectors experienced the largest magnitude among others. Meanwhile, technological progress stemming from FDI is enjoyed more by Low Technology sectors. Meaning to say, technology intensity classification does not matter to technological progress.\u0000Implication ― The host country's government should focus on industries with high technical capabilities to accelerate FDI gains for the firms. Simultaneously, human capital improvement also needs to be intensified, for instance, through training or human development, so that firms with lower technical capability can catch up and, consequently, receive similar benefits from FDI activities.\u0000Originality ― Our study accommodates the research gap by including the FDI effect in both productivity and efficiency in a single equation. Many studies merely categorize technology intensity following the stochastic production frontier estimation to obtain technical efficiency or TFP growth. In this sense, those studies did not control the impact of the technology-specific effect.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"102 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2022-04-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80524176","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 : 2022-04-27DOI: 10.20885/ejem.vol14.iss1.art9
M. Anto, Faaza Fakhrunnas, Y. Tumewang
Purpose ― This study aims to assess the home financing credit risk performed by Islamic banks in Indonesia. Methods ― A panel dynamic analysis is adopted to measure the bad loan performance before and during the Covid-19 pandemic. The observation period started from January 2016 to September 2020 with 1,881 observation periods of monthly panel data from the province level. Findings ― The study finds a difference in bad loan performance before and during the Covid-19 pandemic. Before this pandemic, inflation has a positive and significant influence on non-performing financing in real estate, rental business, and company service. However, during the Covid-19 pandemic, a substantial and positive effect of inflation is found on the bad loan for personal flat and apartment ownership. On the other hand, a significant and negative impact of inflation is found on the bad home loan for personal business shop ownership. Implication ― This analysis could trigger the government to provide financial assistance for those affected by the Covid-19 crisis. In addition to that, an Islamic bank is also expected to give financing allowances for them by providing an option of debt restructuration and rescheduling. Originality ― This paper analyses the Islamic bank’s credit risk performance for home financing before and during the Covid-19 pandemic. This issue has not been presented in the literature to the best of our knowledge.
{"title":"Islamic banks credit risk performance for home financing: Before and during Covid-19 pandemic","authors":"M. Anto, Faaza Fakhrunnas, Y. Tumewang","doi":"10.20885/ejem.vol14.iss1.art9","DOIUrl":"https://doi.org/10.20885/ejem.vol14.iss1.art9","url":null,"abstract":"Purpose ― This study aims to assess the home financing credit risk performed by Islamic banks in Indonesia.\u0000Methods ― A panel dynamic analysis is adopted to measure the bad loan performance before and during the Covid-19 pandemic. The observation period started from January 2016 to September 2020 with 1,881 observation periods of monthly panel data from the province level.\u0000Findings ― The study finds a difference in bad loan performance before and during the Covid-19 pandemic. Before this pandemic, inflation has a positive and significant influence on non-performing financing in real estate, rental business, and company service. However, during the Covid-19 pandemic, a substantial and positive effect of inflation is found on the bad loan for personal flat and apartment ownership. On the other hand, a significant and negative impact of inflation is found on the bad home loan for personal business shop ownership.\u0000Implication ― This analysis could trigger the government to provide financial assistance for those affected by the Covid-19 crisis. In addition to that, an Islamic bank is also expected to give financing allowances for them by providing an option of debt restructuration and rescheduling.\u0000Originality ― This paper analyses the Islamic bank’s credit risk performance for home financing before and during the Covid-19 pandemic. This issue has not been presented in the literature to the best of our knowledge.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"49 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2022-04-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84744109","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 : 2022-04-27DOI: 10.20885/ejem.vol14.iss1.art7
B. Memon
Purpose ― The global pandemic COVID-19 has attracted considerable interest from researchers globally. However, there is very little systematic work on the impact of the COVID-19 crisis on the local stock markets. This paper proposes a complex network method that examines the effects of global pandemic COVID-19 on the Pakistan stock market to fill in these gaps. Methods ― Firstly, correlograms are plotted to inspect the correlation matrices of the overall and two sub-sample periods. Secondly, correlation threshold networks and topological properties are examined for different threshold levels. Finally, this paper uses evolving MSTs to construct a dynamical complex network and presents dynamic centrality measures, normalised tree, and average path lengths. Findings ― The findings show that COVID-19 related certainty and crisis lead to low volatility and a star-like structure, resulting in a quick flow of information and a strong correlation among the Pakistan stock market. Implication ― This analysis would help investors and regulators to manage the Pakistan stock market better. In addition, the comprehensive study solely on the Pakistan stock market will be helpful for Pakistan government officials and stock market participants to assess and predict the risks of the Pakistan stock market associated with the global pandemic COVID-19. Originality ― This paper addresses both classes of the networks. To the best of our knowledge, the static and dynamic evolution of the Pakistan stock market around the global pandemic COVID-19 has not been performed yet.
{"title":"Analysing network structures and dynamics of the Pakistan stock market across the uncertain time of global pandemic (Covid-19)","authors":"B. Memon","doi":"10.20885/ejem.vol14.iss1.art7","DOIUrl":"https://doi.org/10.20885/ejem.vol14.iss1.art7","url":null,"abstract":"Purpose ― The global pandemic COVID-19 has attracted considerable interest from researchers globally. However, there is very little systematic work on the impact of the COVID-19 crisis on the local stock markets. This paper proposes a complex network method that examines the effects of global pandemic COVID-19 on the Pakistan stock market to fill in these gaps.\u0000Methods ― Firstly, correlograms are plotted to inspect the correlation matrices of the overall and two sub-sample periods. Secondly, correlation threshold networks and topological properties are examined for different threshold levels. Finally, this paper uses evolving MSTs to construct a dynamical complex network and presents dynamic centrality measures, normalised tree, and average path lengths.\u0000Findings ― The findings show that COVID-19 related certainty and crisis lead to low volatility and a star-like structure, resulting in a quick flow of information and a strong correlation among the Pakistan stock market.\u0000Implication ― This analysis would help investors and regulators to manage the Pakistan stock market better. In addition, the comprehensive study solely on the Pakistan stock market will be helpful for Pakistan government officials and stock market participants to assess and predict the risks of the Pakistan stock market associated with the global pandemic COVID-19. \u0000Originality ― This paper addresses both classes of the networks. To the best of our knowledge, the static and dynamic evolution of the Pakistan stock market around the global pandemic COVID-19 has not been performed yet.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"13 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2022-04-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85214249","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 : 2022-04-27DOI: 10.20885/ejem.vol14.iss1.art10
M. B. Tufaner
Purpose ― In this study, 5 Turkic Republics (Azerbaijan, Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan) and Turkey are analysed to investigate the impact of trade liberalisation and financial development on economic growth. Methods ― In this study, long-term relationships among trade liberalisation, financial development, and economic growth are analysed by applying unit root, cointegration and causality tests for panel data analysis study for the period 1998 to 2017. Findings ― The findings reveal a strong cointegration relationship between trade liberalization, financial development, and economic growth. It was understood that trade liberalisation positively affected economic growth, and financial development negatively affected economic growth in the long term for the whole panel. However, when the variables are analysed for each country in the panel, it is seen that the sign and severity of the coefficients change. Also, according to panel causality test results, it was understood that there was no causal relationship between variables. Implication ― This paper supports the notion that the direction of the relationship among trade liberalisation, financial development, and economic growth change according to countries in Turkey and the Turkic Republics. Originality ― This paper contributes to the literature by the general view that trade liberalisation and financial development are the driving force of economic growth; these relations may vary according to the country group examined in the studies, the period handled, and the econometric method applied.
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