Assessing Economic Takeoff and Growth in the Arab World

It is an empirical exercise to build the connection between investment in human/ physical capital and economic growth. A panel data set is targeted by considering twelve selected SAARC and ASEAN economies for the period 2005-2019. To get the empirical findings a unit root analysis is made for data stationarity; the Fully Modified Ordinary Least Square (FMOLS) method is taken in practice to find the association of the investment in human/physical capital with economic growth. Moreover, the Pedroni test is used to examine cointegration among the regressors as well as explained variables. The research outcomes highlight that the investment in the human and physical capital formation through education/health expenditures and gross fixed capital formation plays a noteworthy part in economic growth in SAARC and ASEAN economies separately and overall. Moreover, the inflationary trends and the labor force participation rate have their significance for determining economic growth. The trade volume is a significant force for the economic growth until the export proportion will be greater than imports. In a policy outlook, there is a need to enhance the fiscal budget for the health and education sector that will ultimately enhance the economic growth of the concerned economies.

Economic growth drives increased demand for resources, placing greater pressure on the agricultural sector. While the adoption of advanced technologies and increased capital investment can enhance productivity, they also have environmental consequences, contributing to greenhouse gas emissions. Based on this interconnected issue, this study aims to examine the long-term relationships between economic growth, agricultural productivity, gross fixed capital formation, and greenhouse gas emissions in Indonesia, utilizing data from the period 1965-2021. The study employs the Dynamic Ordinary Least Squares (DOLS) and Fully-Modified Ordinary Least Squares (FMOLS) methods, and includes robustness checks using the Canonical Cointegration Regressions (CCR) method. To provide a more comprehensive insight, the study also employs the pairwise Granger causality approach to detect the direction of the relationships. In concise terms, the results suggest that agricultural productivity, gross fixed capital formation, and greenhouse gas emissions have a positive long-term influence on economic growth. Additionally, gross fixed capital formation has a negative effect, while economic growth has a positive long-term impact on agricultural productivity. Furthermore, agricultural productivity has a negative impact, while economic growth indicates a positive long-term effect on gross fixed capital formation. Moreover, economic growth positively influences greenhouse gas emissions over the long term. Lastly, the study found three bidirectional causalities, with greenhouse gas emissions as the central figure. These important findings provide crucial information for policymakers, economists, and environmentalists, giving a nuanced understanding of the intricate relationships between economic activities and environmental consequences, as well as aiding in the formulation of sustainable strategies for green economic growth, especially in Indonesia.

In accordance with the United Nations Sustainable Development Goals agenda for decent and sustainable economic growth highlighted in the UNSDGs-8, several economies over the years have been on the quest for drivers for decent and sustainable economic growth, of which the Arab bloc is no exception. To this end, the present study draws strength from the classical growth model while exploring the dynamic nexus between oil production and economic growth while accounting for other key growth drivers like gross capital formulation accumulation, labour, trade openness, and financial development for a balanced panel of selected Arab economies. To operationalise the study objectives, the present study leverages second-generational panel econometric approaches. The econometrics techniques applied circumvent the cross-sectional dependency and slope heterogeneity in the sampled bloc. For co-integration analysis, the Westerlund’s panel co-integration test affirms a long-run equilibrium relationship between the study’s outlined variables. Furthermore, for long-run estimates, the present study leverages the common correlated effects mean group (CCEMG) methodology and the augmented mean group (AMG) method for robustness and soundness of the results and coefficients. The present study corroborates the trade-induced growth hypothesis in the entire panel at a p < 0.001 statistical level, which resonates with the mercantilism school of thought. Additionally, the present study also affirms the Solow–Swan hypothesis, where gross capital formation accumulation and labour drive economic growth. Interestingly, the panel bloc shows that oil production is a key driver to the nation’s economic growth, at a p < 0.05 statistical level. However, from a policy standpoint, there are policy suggestions for diversification of the Arab economies to move from a mono-economy dependent on oil production to other sectors like service, industry, and manufacturing, which require labour, capital accumulation, and more. Further policy caveats are outlined in the concluding section.

In view of the increase in environmental degradation and the deterioration of natural resources, a set of previous studies has focused on clean energy sources, especially biomass energy. Although studies on the effects of biomass energy on economic growth have been given increasing attention recently, this research topic remains insufficiently investigated and the results remain inconclusive. Emerging countries, whether or not they are abundant in natural resources, rely heavily on energy sources that promise economic growth while being clean. This study examines the effects of biomass energy and natural resource rents on economic growth in the case of 14 selected emerging countries during the period 1984-2017, by applying a long-term approach and also following an analysis of various effects under different quantiles. The paper is aimed at developing a sustainable growth model by studying the varying economic effects of biomass energy consumption and natural resource rents (NRR) at different scales of economic growth. The purpose of the paper is, therefore, to verify whether biomass energy as a renewable energy can constitute a lever for economic expansion in different economic cycles. Panel quantile regression was used to analyze the varying effects of biomass energy consumption on economic growth, supported by a long-term analysis based on the Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) methods. The findings showed that emerging countries did not experience the same effects of biomass energy and natural resource rents on their economic growth. Indeed, the results of the quantile regression support the neutral hypothesis and suggest that biomass energy and natural resource rents do not have positive effects on economic growth whatever the level of economic development of the selected emerging countries. Further analysis revealed that the growth hypothesis is confirmed only for Oil-Rich Emerging Countries (OREC) and for medium and high levels of economic growth. The long-term analysis based on the FMOLS and DOLS techniques also supports the positive effects of biomass energy consumption on economic growth. The findings also indicated that only Brazil, Russia, India, and China (BRIC countries) benefit from positive effects of natural resource rents on economic growth in the long term and for the different quantiles. The originality of this paper lies in its provision of a method for decision makers to reconcile natural resources and biomass energy as a renewable energy source in their economic development strategies based on recorded economic growth.

Relationship between economic growth and mismanaged e-waste: Panel data evidence from 27 EU countries analyzed under the Kuznets curve hypothesis

Aims: This study examined the relationship between trade openness, exchange rates, and unemployment in ECOWAS countries. It investigated whether increased trade openness reduces or exacerbates unemployment and how exchange rate fluctuations impact labor markets. The analysis is grounded in a theoretical framework that integrates trade theory, labor market dynamics, and macroeconomic stability to contextualize the empirical findings. Study Design: A panel econometric approach was employed, utilizing both Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) methods to ensure robust estimates. Place and Duration of Study: The study covered 15 ECOWAS countries, with panel data spanning from 1991 to 2020, sourced from the World Bank Development Indicators (WDI). Methodology: The research applied panel unit root tests (Im, Pesaran, and Shin; ADF; and Phillips-Perron) to determine variable stationarity. Pedroni co-integration tests confirm long- term relationships among trade openness, exchange rates, GDP, population growth, and unemployment. The FMOLS and DOLS models are then used to estimate the effects of these variables on unemployment. Results: Findings indicate that trade openness has a positive and statistically significant effect on unemployment (FMOLS: 5.43, p<0.01; DOLS: 2.71, p<0.01), suggesting that increased trade is associated with higher unemployment. Conversely, exchange rates (FMOLS: -3.47, p<0.01; DOLS: -3.63, p<0.01) and GDP growth (FMOLS: -3.26, p<0.01; DOLS: -2.48, p<0.01) negatively correlate with unemployment, implying that economic growth and stable exchange rates help reduce joblessness. The population growth rate is significant in the DOLS model (1.87, p<0.10), indicating a nuanced effect on unemployment. The models demonstrate high explanatory power (R² = 0.88 for FMOLS; R² = 0.95 for DOLS). Conclusion: The study highlights the complex interplay between trade, exchange rates, and employment in ECOWAS countries. Policymakers should balance trade policies with labor market reforms to mitigate unemployment. Stabilizing exchange rates and fostering economic growth through industrial and workforce development programs are crucial strategies for sustainable employment generation. However, the study acknowledges limitations, including potential omitted variable bias and the challenges of generalizing findings across diverse economies. Future research could explore sector-specific impacts of trade openness and exchange rate volatility, as well as the role of institutional quality in shaping labor market outcomes.

Since the beginning of the new millennium several developing countries have been making greater use of domestic bond markets, with a corresponding decline in gross and net foreign debt-to-GDP ratios. Jordan was not an exception; the structure of the public debt in Jordan has exhibited a similar shift towards the domestic borrowings after the year 2000. In order to assess the economic consequences of this change in the public debt structure, this study investigates the impact of the structure of the public debt and other determinants of growth on the economic growth in Jordan over the period 1980 – 2018. The analysis of the long-run relationship between the domestic and external public debt and the economic growth is reliant on the theoretical assumptions and the empirical concerns and it is conducted by applying the Fully Modified Ordinary Least Squares (FMOLS) method; the results indicate that the external and domestic public borrowings are negatively associated with economic growth with a greater magnitude of the domestic debt in the long-run; the greater magnitude of the negative implication of domestic debt on economic growth is attributed to the increased trend of domestic debt that has been increasing in excess of the external debt since 2008. On the other hand, investment, labor force growth, and openness of trade are found to be positively associated with economic growth in the long-run. Accordingly, this study recommends the need to reduce the public debt and budget deficit to moderate levels in the long-run through implementing austerity measures and fiscal discipline that are carefully planned to minimize the potential negative effect on economic growth, where they should be implemented along with fiscal reforms intended for increasing employment and boosting Jordan’s growth potential. It is also recommended that the government should thoroughly revise the debt management strategy, so as to avoid the deterring effects of the increased stock of domestic debt on capital accumulation and economic growth in the long-run.

This paper aims at investigating the impact of public governance on the economic growth in Non-Oil-Exporting Arab countries (NOEAC). The study used panel data for six NOEAC over the period from 1998 to 2017. Some study variables were not stationary at level but they became stationary after taking the first difference for them. The result of applying Kao panel cointegration test revealed that the study model was cointegrated. Therefore, Fully Modified Ordinary Least Squares (FMOLS) model was applied for estimation showing that governance factors have the greatest significant positive effects on the economic growth in such countries. Gross fixed capital formation, labor force growth rate, trade openness, economic freedom, rule of law, regulatory quality, control of corruption, and voice and accountability have statistically significant positive impact on their economic growth during the study period, while the Global Financial Crisis of 2008 (GFC) with its slow recovery has a significant negative impact on their economic growth. Political stability and government effectiveness have insignificant effects. The main conclusion derived from this paper is that political and institutional aspects can play an important role in the economic progress, and they are responsible for major contribution to economic growth and development. Therefore, attracting domestic and foreign direct investments, increasing labor and capital productivities, strengthening governance, improving public administration and eradication of corruption have the first priorities in NOEAC.

Access to credit serves as a vital catalyst for economic growth, allowing individuals, enterprises, and governments to fund investments, maintain consumption stability, and encourage productive endeavors. Economic growth is fundamental to sustainable development, enhancing living standards, and promoting innovation. This study investigates the impact of credit access on economic growth in Southeast Asia (SEA) countries using monthly data from 2014 to 2020. By applying the Fully Modified Ordinary Least Squares (FMOLS) method, along with robustness checks using the Dynamic Ordinary Least Squares (DOLS) technique, this study includes essential control variables such as capital, labor, and technology. The results reveal that credit access has a positive impact on economic growth, while capital and technology also contribute positively to economic growth. Conversely, labor shows a negative impact on economic growth within the region. These results are consistent across both the FMOLS and DOLS analyses. Based on these findings, Southeast Asian policymakers ought to facilitate credit accessibility by making loan applications more straightforward, minimizing bureaucratic obstacles, and providing lower interest rates, especially for small enterprises and marginalized communities. Moreover, encouraging financial institutions to lend more liberally and utilizing digital platforms can expand access. Additionally, investing in technology, improving capital formation, and tackling labor market challenges will more effectively align with the region's growth path.

Based on the controversy surrounding the determinants of foreign direct investment (FDI) inflow from one country to another and the suggestion that inflow of FDI might be a result of countries’ locations, this study therefore revisits the determinants of FDI and economic growth by testing for the roles of country’s location in the determination of the inflow of FDI to Nigeria. Unlike other studies, this study finds that countries’ locations do not play any significant role in determining FDI inflow to Nigeria. The study, therefore, employs fully modified ordinary least square (FMOLS) to examine the determinants of FDI in Nigeria. The FMOLS results show that FDI, manufacturing sector, tax revenue, financial development, health expenditure, net trade and human capital have a positive relationship with income growth. These results were statistically significant except for tax revenue, net trade and human capital. These results support the argument that these variables are important determinants of economic growth. The article also finds a negative and statistically significant relationship among FDI, income growth, import and capital formation. These results are in conformity with economic theory in the sense that import of goods and services constitutes a leakage in the economy. Negative impact of capital formation and security could be associated with the prevailing high level of corruption, sharing of security votes and misappropriation of funds among the public officials in Nigeria. JEL Codes: F23, F26, F21, H24

Background: Foreign capital is vital for small, low-income countries like The Gambia, where domestic resources are often insufficient to meet development needs. Despite reforms since the 1980s, the country has experienced volatile growth, even amid efforts to attract capital inflows. Aim: This research investigates how foreign capital inflows influence economic growth in The Gambia, emphasising the roles of savings and the foreign exchange gaps. Setting: The study uses the dual-gap framework and annual data from 1980 to 2023. Method: The study applies robust econometric techniques of Dynamic Ordinary Least Squares (DOLS) and Fully Modified Ordinary Least Squares (FMOLS) to analyse the long-term relationship between capital inflows and growth. Results: Findings indicate that capital accumulation, foreign direct investment (FDI), and remittances significantly drive economic growth. FDI shows a stronger impact of 12% compared to remittances’ 7%. Human capital is also positively significant. Conversely, foreign exchange constraints exhibit substantial negative effects, while the negative labour input coefficient suggests inefficiencies in the labour market, likely linked to high informal employment. The savings gap was found to be insignificant. These results support classical growth theory and the capital-augmenting hypothesis. Conclusion: Policy recommendations include attracting more FDI, streamlining remittance channels, addressing labour market inefficiencies, and implementing import substitution and export promotion strategies to ease foreign exchange constraints and foster sustainable economic growth. Contribution: This study offers the first empirical assessment for The Gambia examining foreign capital inflows, growth, and the dual-gap dynamics, particularly relevant and timely in light of the growing reliance on external capital.

ABSTRACTThis study examines the role of regulatory quality toward the achievement of India's sustainable economic growth. India's economy is known for its policy structure that guarantees infrastructural development and ease of doing business (EOD). EOD is a mechanism for achieving a structural development that stems from the informal economy. This has impacted India's economy positively through the increase in the small and medium businesses and enterprises (SMEs) because of the increasing participation of private agents in building and developing the entire economy. Hence, this study chooses India's economy as a specimen to examine the possible contribution of the selected variables as they are considered prevailing economic factors in India's economic performance. The direct motive of this study is to test and compare the impact of regulatory quality on EOD and economic growth in pursuit of sustainable economic development. While the focus is on the role of regulatory quality on EOD and economic growth, other vital and prevailing economic factors (banking efficiency, FDI and labor force participation rate) in India are introduced to the modeling of this study. India's economy is known for its policy structure that guarantees infrastructural development and EOD. It will add to the growth and sustainability literature to investigate the economy with respect to the implication of regulatory quality and EOD toward achieving sustainable economic growth; hence, the need for this study. For insightful research into the objectives, this study adopts a two‐model approach centered on economic growth and EOD. The study adopts Augmented Least Squares (RALS), newly developed RALS‐EG (Engle and Granger test), fully modified ordinary least squares (FMOLS), and autoregressive distributed lag (ARDL) techniques for effective analysis and justification of the objectives of this study. The findings from this analysis revealed the importance of regulatory quality to both economic growth and EOD for India through a positive interaction with the two targeted variables (i.e., economic growth and EOD). EOD has a positive link with economic growth; bank efficiency has a positive link with both economic growth and EOD; FDI has a positive link between economic growth and EOD. This shows that FDI, bank efficiency, and EOD policies will foster sustainable economic growth for India.

This study investigates the impact of Chinese outward foreign direct investment (FDI) on the economic growth of 27 European countries from 2004 to 2021, amid concerns about China’s increasing economic influence in Europe. This study employs systematic econometric methods, including the LLC and IPS tests for stationarity, Kao and Pedroni cointegration tests, fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) for long-term effects, and the ARDL test for short- and long-term effects. The findings further supported by Panel Granger causality test, one-way and two-way fixed effect models, and dynamic panel models, suggest a significant positive impact of trade openness and fixed capital on longterm European economic development. The study also reveals that while Chinese FDI and trade openness primarily influence economic growth in the long run, fixed capital has both short and long-term effects. Moreover, a sensitivity analysis of rich and poor European nations confirms these patterns, emphasising the role of trade openness and fixed capital in promoting sustainable economic growth. The study suggests a balanced approach to leveraging FDI, highlighting the importance of policy measures that encourage trade openness and fixed capital investment to enhance economic development in Europe.

Understanding the dynamic nexus between CO2 emissions and economic growth in the sustainable environment helps the economies in developing resources and formulating apposite energy policies. In the recent past, various studies have explored the nexus between CO2 emissions and economic growth. This study, however, investigates the nexus between renewable energy production, CO2 emissions, and economic growth over the period from 1995 to 2016 for seven Association of Southeast Asian Nations (ASEAN) countries. Fully Modified Ordinary Least Square (FMOLS) and Dynamic Ordinary Least Square (DOLS) methodologies were used to estimate the long- and short-run relationships. The panel results revealed that renewable energy production has a significant long term effect on CO2 emissions for Vietnam (t = −2.990), Thailand (t = −2.505), and Indonesia (t = −2.515), and economic growth impact for Malaysia (t = 2.050), Thailand (t = −2.001), and the Philippines (t = −2.710). It is, therefore, vital that the ASEAN countries implement policies and strategies that ensure energy saving and continuous economic growth without forsaking the environment. This study, as such, recommends that ASEAN countries should take measures to decrease the reliance on fossil fuels for achieving these objectives. Future research should consider the principles of circular economy and clean energy development mechanisms integrated with renewable energy technologies.

This paper aims to systematically explore the impact of renewable energy consumption, trade openness, industrialization, and urbanization on economic growth and carbon emissions while considering the different development levels of 122 countries over the period 1998–2018. Pesaran CD test, CIPS unit root test, Pedroni cointegration test, fully modified ordinary least square (FMOLS) estimation, Dumitreschu–Hurlin causality test and DOLS robustness test are adopted. The results show that trade openness has different effects on economic growth and carbon emissions across different income groups. Specifically, the impact of trade openness on economic growth in high- and low-income countries is positive, while trade openness has a negative impact on economic growth in middle-income countries. Meanwhile, the impact of trade openness on carbon emissions supports the pollution haven hypothesis. Urbanization promotes economic growth in all income countries, and increases carbon emissions in countries of all income groups except high-income countries. Renewable energy consumption promotes economic growth and curbs carbon emissions, while industrialization increases economic growth and carbon emissions. Further findings show a one-way causality from trade openness to renewable energy consumption. Finally, some targeted recommendations are provided for countries with different development stages.