Pub Date : 2021-04-01DOI: 10.20885/EJEM.VOL13.ISS1.ART8
S. Shankar
Findings ─ Our results suggest investment complementarity between the public and private sector at an aggregate and sectoral level over the period 1981-2019. Barring short-run crowding-out in construction and financial services at industry level, public investment stimulates private counterparts, both in the long and short-run. However, fiscal deficit, inflation expectation, and sovereign vulnerability influence private investment adversely. Moreover, the long-run crowding-out bearing of fiscal imbalance is quantitatively higher when the public sector invests in mining and manufacturing and insignificant with infrastructure.
{"title":"Government fiscal spending and crowd-out of private investment: An empirical evidence for India","authors":"S. Shankar","doi":"10.20885/EJEM.VOL13.ISS1.ART8","DOIUrl":"https://doi.org/10.20885/EJEM.VOL13.ISS1.ART8","url":null,"abstract":"Findings ─ Our results suggest investment complementarity between the public and private sector at an aggregate and sectoral level over the period 1981-2019. Barring short-run crowding-out in construction and financial services at industry level, public investment stimulates private counterparts, both in the long and short-run. However, fiscal deficit, inflation expectation, and sovereign vulnerability influence private investment adversely. Moreover, the long-run crowding-out bearing of fiscal imbalance is quantitatively higher when the public sector invests in mining and manufacturing and insignificant with infrastructure.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"42 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2021-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86611479","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 : 2021-04-01DOI: 10.20885/EJEM.VOL13.ISS1.ART2
Arif Eser Güzel, C. Akin
Findings ─ The estimation results of the Common Correlated Effects Mean Group (CCEMG), Dynamic-CCEMG, and biased-corrected form of Dynamic-CCEMG, suggest that agricultural productivity is the main engine of economic growth. Additional findings show that economic growth is positively associated with both physical capital and human capital. This paper does not find any significant relationship between trade openness and economic growth.
{"title":"The role of agricultural productivity in economic growth in middle-income countries: An empirical investigation","authors":"Arif Eser Güzel, C. Akin","doi":"10.20885/EJEM.VOL13.ISS1.ART2","DOIUrl":"https://doi.org/10.20885/EJEM.VOL13.ISS1.ART2","url":null,"abstract":"Findings ─ The estimation results of the Common Correlated Effects Mean Group (CCEMG), Dynamic-CCEMG, and biased-corrected form of Dynamic-CCEMG, suggest that agricultural productivity is the main engine of economic growth. Additional findings show that economic growth is positively associated with both physical capital and human capital. This paper does not find any significant relationship between trade openness and economic growth.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"56 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2021-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82840319","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 : 2021-04-01DOI: 10.20885/EJEM.VOL13.ISS1.ART1
Amir Rafique, M. U. Quddoos, Shujat Ali, Faheem Aslam, M. Ahmad
Findings ─ The result indicates a positive relationship between cash flows and investment during periods of monetary tightness. The impact on cash flows is visibly more pronounced than that of the quantitative effect of an increase in capital cost, which gives rise to a balance sheet channel. Three financial constraints, namely size, leverage, and dividend policy, are used to segregate firms into financially constrained and unconstrained firms.
{"title":"Monetary policy transmission: Balance sheet channel and investment behavior of firms in Pakistan","authors":"Amir Rafique, M. U. Quddoos, Shujat Ali, Faheem Aslam, M. Ahmad","doi":"10.20885/EJEM.VOL13.ISS1.ART1","DOIUrl":"https://doi.org/10.20885/EJEM.VOL13.ISS1.ART1","url":null,"abstract":"Findings ─ The result indicates a positive relationship between cash flows and investment during periods of monetary tightness. The impact on cash flows is visibly more pronounced than that of the quantitative effect of an increase in capital cost, which gives rise to a balance sheet channel. Three financial constraints, namely size, leverage, and dividend policy, are used to segregate firms into financially constrained and unconstrained firms.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"67 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2021-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84041185","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 : 2020-10-07DOI: 10.20885/ejem.vol12.iss2.art1
O. Osabuohien-Irabor
This paper examines whether stock prices for fourteen African countries are affected by transitory or permanent shocks. This study answers whether Africa stock market indices are mean-reverting or random-walk in the presence of multiple structural breaks. To investigate African equity price behavior, we considered one and two endogenously determined structural break tests of Zivot and Andrews (1992) and Lumsdaine and Papell (1997), respectively. Findings/Originality : Our results show that almost all African equity price indices follow the random walk processes except for Senegal and Botswana, which exhibit mean-reversion properties in its equity prices. It implies that investors in African stock markets cannot rely on past information and behavior to predict stock market movements or develop their trading strategies. The result also confirms that the Augmented Dickey-Fuller (ADF) unit root test is not applicable in the presence of structural breaks in African stock markets.
{"title":"Unit root tests in the presence of structural breaks: Evidence from African stock markets","authors":"O. Osabuohien-Irabor","doi":"10.20885/ejem.vol12.iss2.art1","DOIUrl":"https://doi.org/10.20885/ejem.vol12.iss2.art1","url":null,"abstract":"This paper examines whether stock prices for fourteen African countries are affected by transitory or permanent shocks. This study answers whether Africa stock market indices are mean-reverting or random-walk in the presence of multiple structural breaks. To investigate African equity price behavior, we considered one and two endogenously determined structural break tests of Zivot and Andrews (1992) and Lumsdaine and Papell (1997), respectively. Findings/Originality : Our results show that almost all African equity price indices follow the random walk processes except for Senegal and Botswana, which exhibit mean-reversion properties in its equity prices. It implies that investors in African stock markets cannot rely on past information and behavior to predict stock market movements or develop their trading strategies. The result also confirms that the Augmented Dickey-Fuller (ADF) unit root test is not applicable in the presence of structural breaks in African stock markets.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"21 1","pages":"119-137"},"PeriodicalIF":0.5,"publicationDate":"2020-10-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81807842","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 : 2020-10-01DOI: 10.20885/ejem.vol12.iss2.art8
M. Cahyadin
This paper examines the effect of the globalization threshold on financial inclusion in 40 selected countries during 2000-2018. A principal component analysis (PCA) and a static panel threshold (SPT) are utilized. There are three dimensions and one aggregation of financial inclusion indicators assessed by PCA, while the globalization threshold is estimated under static panel threshold regression. Findings/Originality: The findings exhibit six countries with strong financial inclusion and eight countries with weak financial inclusion during study periods. Furthermore, the threshold effect of globalization has a significant impact on the financial inclusion index. The robustness checking employs panel cointegration test exhibits that inequality and some institutions indicators have a significant impact on financial inclusion both in the short-run and long-run. The policy implication suggests that governments should increase the financial inclusion index level during the globalization period, decrease inequality, and improve institutions' quality.
{"title":"The linkage between globalisation and financial inclusion: Do inequality and institutions matter?","authors":"M. Cahyadin","doi":"10.20885/ejem.vol12.iss2.art8","DOIUrl":"https://doi.org/10.20885/ejem.vol12.iss2.art8","url":null,"abstract":"This paper examines the effect of the globalization threshold on financial inclusion in 40 selected countries during 2000-2018. A principal component analysis (PCA) and a static panel threshold (SPT) are utilized. There are three dimensions and one aggregation of financial inclusion indicators assessed by PCA, while the globalization threshold is estimated under static panel threshold regression. Findings/Originality: The findings exhibit six countries with strong financial inclusion and eight countries with weak financial inclusion during study periods. Furthermore, the threshold effect of globalization has a significant impact on the financial inclusion index. The robustness checking employs panel cointegration test exhibits that inequality and some institutions indicators have a significant impact on financial inclusion both in the short-run and long-run. The policy implication suggests that governments should increase the financial inclusion index level during the globalization period, decrease inequality, and improve institutions' quality.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"72 1","pages":"220-233"},"PeriodicalIF":0.5,"publicationDate":"2020-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86283973","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 : 2020-10-01DOI: 10.20885/ejem.vol12.iss2.art2
Vedat Kaya, A. Çelik, Muhammet Kutlu
Income distribution decomposition may be affected by a variety of different factors. The main objective of this study is to examine potential factors of personal income distribution in TRA1 sub-region, the three highest income inequality in Turkey. The dataset was drawn from the Turkish Household Income and Life Conditions Survey. Due to the natural ordering of the dependent variable, a generalized ordered logit model was performed to analyze the data. Findings/Originality : The estimation results reveal that gender, age, marital status, educational level, occupational group, and general health status were found to be statistically significant determinants of personal income distribution in TRA1 sub-region of Turkey. The empirical evidence gathered from this study may add an explanation for personal income distribution decomposition in sub-regions of Turkey. In addition, the finding contributes to the human capital theory development that implies the importance of educational policy as one of the effective tools in reducing inequality.
{"title":"Personal income distribution in Turkey: A generalized ordered logit analysis","authors":"Vedat Kaya, A. Çelik, Muhammet Kutlu","doi":"10.20885/ejem.vol12.iss2.art2","DOIUrl":"https://doi.org/10.20885/ejem.vol12.iss2.art2","url":null,"abstract":"Income distribution decomposition may be affected by a variety of different factors. The main objective of this study is to examine potential factors of personal income distribution in TRA1 sub-region, the three highest income inequality in Turkey. The dataset was drawn from the Turkish Household Income and Life Conditions Survey. Due to the natural ordering of the dependent variable, a generalized ordered logit model was performed to analyze the data. Findings/Originality : The estimation results reveal that gender, age, marital status, educational level, occupational group, and general health status were found to be statistically significant determinants of personal income distribution in TRA1 sub-region of Turkey. The empirical evidence gathered from this study may add an explanation for personal income distribution decomposition in sub-regions of Turkey. In addition, the finding contributes to the human capital theory development that implies the importance of educational policy as one of the effective tools in reducing inequality.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"9 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2020-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84979948","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 : 2020-10-01DOI: 10.20885/EJEM.VOL12.ISS2.ART5
D. Luu
The study investigates the relationship between institutional factors, entrepreneurial types, and economic growth. The analysis is based on an unbalanced panel data of 18 Asian countries over 2006-2018 using a 3SLS estimation method. The study extends the neoclassical growth model with entrepreneurship capital types as an endogenous variable to the economic growth function. Findings/Originality : The results show that new business density and productive entrepreneurship are found to have a significant effect on GDP per capita. Additionally, a reverse impact of economic growth on entrepreneurship is revealed. Institution's constructs, namely corruption control and the rule of law, are crucial to entrepreneurship, which in turn stimulate economic growth. The results also confirm the significant role of human capital, accumulating domestic investment, economic openness, and controlling inflation in the economic growth model of the Asian countries.
{"title":"Institutional factors, entrepreneurship capital types, and economic growth in Asian countries","authors":"D. Luu","doi":"10.20885/EJEM.VOL12.ISS2.ART5","DOIUrl":"https://doi.org/10.20885/EJEM.VOL12.ISS2.ART5","url":null,"abstract":"The study investigates the relationship between institutional factors, entrepreneurial types, and economic growth. The analysis is based on an unbalanced panel data of 18 Asian countries over 2006-2018 using a 3SLS estimation method. The study extends the neoclassical growth model with entrepreneurship capital types as an endogenous variable to the economic growth function. Findings/Originality : The results show that new business density and productive entrepreneurship are found to have a significant effect on GDP per capita. Additionally, a reverse impact of economic growth on entrepreneurship is revealed. Institution's constructs, namely corruption control and the rule of law, are crucial to entrepreneurship, which in turn stimulate economic growth. The results also confirm the significant role of human capital, accumulating domestic investment, economic openness, and controlling inflation in the economic growth model of the Asian countries.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"15 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2020-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75802229","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 : 2020-10-01DOI: 10.20885/EJEM.VOL12.ISS2.ART3
P. Güney
In the literature it is suggested that, in addition to many factors such as macroeconomic and microeconomic polices, financial institutions and property rights; macroeconomic uncertainties are affecting the investment decisions. In this paper, we analyzed the effect of the real exchange rate, inflation and growth uncertainties on private investment in a developing country; Turkey. We used a generalized autoregressive conditional heteroskedasticity (GARCH) model to measure uncertainties. Then, we investigated the longterm relationship of the variables using bound testing approach. Finally, we adopt an error correction model to capture the dynamic relationship. According to our results macroeconomic uncertainties have a significant negative effect on private investments in Turkey. Therefore, our findings showed the importance of the macroeconomic stability for the continuity of investments in Turkey.
{"title":"Macroeconomic uncertainty and investment relationship for Turkey","authors":"P. Güney","doi":"10.20885/EJEM.VOL12.ISS2.ART3","DOIUrl":"https://doi.org/10.20885/EJEM.VOL12.ISS2.ART3","url":null,"abstract":"In the literature it is suggested that, in addition to many factors such as macroeconomic and microeconomic polices, financial institutions and property rights; macroeconomic uncertainties are affecting the investment decisions. In this paper, we analyzed the effect of the real exchange rate, inflation and growth uncertainties on private investment in a developing country; Turkey. We used a generalized autoregressive conditional heteroskedasticity (GARCH) model to measure uncertainties. Then, we investigated the longterm relationship of the variables using bound testing approach. Finally, we adopt an error correction model to capture the dynamic relationship. According to our results macroeconomic uncertainties have a significant negative effect on private investments in Turkey. Therefore, our findings showed the importance of the macroeconomic stability for the continuity of investments in Turkey.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"13 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2020-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87830481","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 : 2020-10-01DOI: 10.20885/ejem.vol12.iss2.art6
Muhammad Siddique, Ahsan Anwar, M. A. Quddus
This study estimates the effects of devaluation and appreciation of real effective exchange rate ( REER ) on revealed comparative advantage ( RCA ) at Harmonized System 2-digit level of exports in Pakistan. A non-linear Autoregressive Distribute Lag ( ARDL ) technique is applied to test the asymmetric evidence. This study employs two models to explore the export performance. Findings/Originality: The results of model 1 estimation confirm the proof of asymmetric ARDL and concludes that devaluation has a positive effect on selected RCA ’s index value and helps enhance exports of Pakistan. Meanwhile, the appreciation of REER is having an adverse impact. Model-2 estimates the effect of these selected RCA’s , REER , and world aggregated income ( Yw ) on the trade balance ( TB ) of Pakistan. The results estimate that an increase in selected RCA’s index values, world aggregated income, and REER depreciation is useful to decrease in deficit TB of Pakistan.
{"title":"The impact of real effective exchange rate on revealed comparative advantage and trade balance of Pakistan","authors":"Muhammad Siddique, Ahsan Anwar, M. A. Quddus","doi":"10.20885/ejem.vol12.iss2.art6","DOIUrl":"https://doi.org/10.20885/ejem.vol12.iss2.art6","url":null,"abstract":"This study estimates the effects of devaluation and appreciation of real effective exchange rate ( REER ) on revealed comparative advantage ( RCA ) at Harmonized System 2-digit level of exports in Pakistan. A non-linear Autoregressive Distribute Lag ( ARDL ) technique is applied to test the asymmetric evidence. This study employs two models to explore the export performance. Findings/Originality: The results of model 1 estimation confirm the proof of asymmetric ARDL and concludes that devaluation has a positive effect on selected RCA ’s index value and helps enhance exports of Pakistan. Meanwhile, the appreciation of REER is having an adverse impact. Model-2 estimates the effect of these selected RCA’s , REER , and world aggregated income ( Yw ) on the trade balance ( TB ) of Pakistan. The results estimate that an increase in selected RCA’s index values, world aggregated income, and REER depreciation is useful to decrease in deficit TB of Pakistan.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"68 1","pages":""},"PeriodicalIF":0.5,"publicationDate":"2020-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90766006","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 : 2020-10-01DOI: 10.20885/ejem.vol12.iss2.art7
Imed Medhioub, M. Makni
The private sector plays a crucial role in the economy. This paper constructs an empirical model for the sector in Saudi Arabia. It incorporates oil price uncertainty as well as stock market returns volatility to predict the sector. It estimates the GARCH (generalized autoregressive conditional heteroskedasticity) and ARDL (autoregressive distributed lag) models. Findings/Originality: Our estimations show significant evidence of a long-run relationship between private investment, oil price, and the stock market. We also find that the stock market index has a significant positive effect on private investment in the short run. The effects are strong in the case of unexpected news from the oil sector. Oil price uncertainty can be considered as a channel of transmission of negative shocks on the private sector. For these reasons, when Saudi Arabia has launched its 2030 vision, it announced that one of its goals is to become a non-oil dependent country.
{"title":"Oil price and stock market returns uncertainties and private investment in Saudi Arabia","authors":"Imed Medhioub, M. Makni","doi":"10.20885/ejem.vol12.iss2.art7","DOIUrl":"https://doi.org/10.20885/ejem.vol12.iss2.art7","url":null,"abstract":"The private sector plays a crucial role in the economy. This paper constructs an empirical model for the sector in Saudi Arabia. It incorporates oil price uncertainty as well as stock market returns volatility to predict the sector. It estimates the GARCH (generalized autoregressive conditional heteroskedasticity) and ARDL (autoregressive distributed lag) models. Findings/Originality: Our estimations show significant evidence of a long-run relationship between private investment, oil price, and the stock market. We also find that the stock market index has a significant positive effect on private investment in the short run. The effects are strong in the case of unexpected news from the oil sector. Oil price uncertainty can be considered as a channel of transmission of negative shocks on the private sector. For these reasons, when Saudi Arabia has launched its 2030 vision, it announced that one of its goals is to become a non-oil dependent country.","PeriodicalId":41472,"journal":{"name":"Economic Journal of Emerging Markets","volume":"35 1","pages":"208-219"},"PeriodicalIF":0.5,"publicationDate":"2020-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86688232","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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