ARDL Bounds Test Research Articles

Renewable Energy, Financial Growth and Technological Progress: Analyzing the Dynamics of Sectoral Emissions in Pakistan

The study examined the role of renewable energy, financial growth, and technical progress in Pakistan's industrial, manufacturing, and service sector emissions. The study collected consistent time series data from 1975 to 2022 and employed the ARDL-Bounds testing approach to estimate the short- and long-term parameter estimates. The study assessed three broad models. The first model linked renewable energy to carbon emissions in the cement industry. Carbon emissions and renewable energy were negatively related. Further, a negative relationship exists between information and communication technologies (ICTs) and carbon emissions, with a one-unit increase in ICT reducing CO2 emissions by 0.135 units. A substantial and positive association was found between GDP per capita and CO2 emissions in Pakistan. At the same time, the square term decreases carbon emissions, supporting a country's environmental Kuznets curve (EKC) hypothesis. In the second model, high technology exports were positively connected with manufacturing CO2 emissions, while energy use's interaction term had a significant negative impact. Manufacturing CO2 emissions were positively correlated with renewable energy in the short and medium term. Financial development is assessed by money supply, which directly affects carbon emissions to support financial-led emissions in a country. The third model used GHG emissions as the dependent variable and focused on the service sector. The interaction term between energy consumption and clean fuel technology (CFT) was negative and significant, although GHG emissions and CFT were positively correlated. Non-renewable energy raised GHG emissions, while renewable energy decreased them.

The Impact of Cryptocurrency Markets on the Traditional Financial Markets of the USA, UK, and Germany

The acceleration of the globalization process and the structural changes in technology that emerged in the 2000s have affected financial markets. This interaction in the financial markets has made the emergence of new financial assets necessary. According to the ARDL boundary test results, there is no significant relationship between cryptocurrency markets and stock returns in both the long and short term for the UK financial markets. For the German financial markets, it has been determined that there is a significant and positive long-term relationship between the cryptocurrency market assets Bitcoin and Tether and stock market returns. In the short term, no significant relationship has been detected. For the long term in the U.S. financial markets, it has been determined that there is a significant and positive relationship between Bitcoin, a cryptocurrency market asset, and stock market returns, while there is no significant relationship between Ethereum and Tether with stock market returns. In the short term, no significant relationship has been detected. These findings offer significant implications for policymakers, investors, and market analysts.

The Relationship between Agricultural Production, Agricultural Exports and Economic Growth in Türkiye: Cointegration and Causality Analysis

This study aimed to assess the influence of agricultural production and agricultural product exports on economic growth within the Turkish economy. To achieve this, annual data spanning from 1980 to 2022 were utilized to construct a model, employing the ARDL Bounds Test to discern the long-term cointegration relationship among variables and the Fourier Toda-Yamamoto Causality Test to determine causality relationships. The empirical findings from the ARDL Bounds Test indicate that increases in both agricultural production and agricultural product exports positively impact economic growth. Moreover, results from the Fourier Toda-Yamamoto Causality Test unveil a two-way causal relationship between agricultural production and GDP, while a one-way causality relationship is observed between agricultural product exports and GDP. Despite the declining share of the agricultural sector in GDP over the years in Turkey, these findings underscore the enduring importance of agriculture in driving economic growth and creating value. As potential solutions to Turkey's balance of payments challenges, strategies such as boosting domestic demand, expanding the domestic market, and augmenting agricultural sector contributions to foreign exchange earnings through agricultural export subsidies are proposed. Furthermore, efforts to mitigate income disparities between the agricultural sector and other sectors could foster socio-economic development in rural areas, thus promoting a more equitable distribution of national income across society.

Examining the Status Quo Bias for the Recent Global Economic Crisis: The Case of Türkiye

The objective of this paper is to investigate the "status quo bias,” which is a key concept in behavioral economics, using macroeconomic data from the recent economic crisis in Türkiye. The current global economic situation provides a favorable opportunity to analyze this idea, as there are abundant and relevant inputs for this type of study. Specifically, this paper analyzes the nexus between consumption and income before and after the economic crisis that triggered by the Covid-19 pandemic in Türkiye, with the aim of examining the "status quo bias” by employing ARDL Bounds Test. The analysis findings support that Türkiye has exhibited status quo bias for the period from 2013 to 2022. This research fills a gap in the literature by presenting evidence that Türkiye, a country that has been overlooked in the field of behavioral economics, exhibits the status quo bias in the context of recent economic crisis triggered by the Covid-19 outbreak.

Illuminating the path to decarbonization: Nuclear energy consumption, clean energy production, and sustainable fuel production for long-term development

The global concern over carbon emissions has necessitated a deep understanding of energy use and air pollution. The fossil fuel- and nuclear-dependent Russian economy is an exciting exception. It examined how nuclear energy consumption (NEC), electricity generation, R&D investment, clean energy production technology, e-commerce penetration, capital creation, and carbon pollution affect the Russian economy. Short- and long-term interactions between these variables are assessed using the ARDL-Bound testing model for 1995Q1–2020Q4. The results show that NEC negatively correlates with CO2 emissions. The study also supports the inverted U-shaped Environmental Kuznets Curve (EKC) hypothesis, showing a positive and significant relationship between clean power production technology and CO2 emissions and a negative and significant relationship between square clean alternative energy innovation and CO2 emissions. Scientific and technical expenditures, fossil fuel coal liquefaction, and investment all negatively and statistically significantly affect CO2 emissions. However, the analysis implies that e-commerce increases CO2 emissions. These findings highlight the need for significant R&D investment to create precise and realistic ways to decrease carbon emissions and protect the environment in accordance with COP 26 targets. These findings have significant implications for the Russian economy, showing that improving energy sources and investing more in R&D may reduce carbon emissions.

Does Financial Development Induce Total Factor Productivity Growth in an Emerging Economy? The Role of Gender Human Capital

ABSTRACTDrawing from neoclassical growth theories, this study explores the interplay between financial development, gender‐specific human capital, and total factor productivity (TFP) growth in India, addressing a gap in prior literature by examining their interactive effects on emerging economies' productivity trajectories. Employing the ARDL Bound test model, we estimate the productivity growth equation using annual data from 1980 to 2019. Variables such as government spending on education and foreign direct investment serve as crucial control variables in the TFP growth framework. Our findings reveal nuanced dynamics: while financial development enhances productivity growth in the absence of gender‐specific human capital considerations, its impact varies significantly with the inclusion of male and female education levels. Notably, financial development positively influences productivity growth when male education levels are high. Surprisingly, financial development hampers productivity growth when female education level is high. These insights underscore the disproportionate influence of male education on productivity growth vis‐à‐vis female education in India. This study contributes to the literature by highlighting the differential impacts of financial development on India's productivity growth in the presence of gender‐specific human capital. This analysis emphasizes the role of gender dynamics in educational attainment for policymakers aiming to leverage financial development as a catalyst for productivity growth. In addition, the policymakers in India are urged not to downplay the significance of male education in fostering financial development and augmenting productivity growth. Furthermore, the policymakers are advised to scrutinize the adverse repercussions of financial development on productivity growth within the context of female education at higher levels.

Manufacturing sector in India: A study of Kaldor’s first Law using ARDL Bounds testing

Manufacturing sector in India: A study of Kaldor’s first Law using ARDL Bounds testing

Impact Analysis of Chinese FDI and Green Innovations on Carbon Emissions in Pakistan: Utilizing the ARDL Bounds Testing Method

Impact Analysis of Chinese FDI and Green Innovations on Carbon Emissions in Pakistan: Utilizing the ARDL Bounds Testing Method

The Relationship Between Current Account Deficit and CBRT Policy Rates After the 2008 Crisis: ARDL and NARDL Bounds Test Approach

The current account deficit has continued as a constant problem due to the structural problems of the Turkish economy and the impact of the tightening monetary policy decisions taken after the 2008 global crisis. For this reason, measures regarding the current account deficit are among the priority agenda items of the CBRT. The aim of this study is to examine the relationship between the current account deficit and the policy interest rate in the inflation targeting and floating exchange rate system using the ARDL bounds test method in the period 2011:Q1-2023:Q1. Cointegration results confirm the existence of a long-term relationship between the variables. Long and short term coefficients show that the policy rate does not have a significant effect on the current account deficit.The findings indicate that the expected impact of policy rate adjustments on the current account deficit is limited. It is thought that this situation arises from the fact that the reaction of the exchange rate to the policy interest is more decisive in inflation targeting than the reaction of the current account deficit. Therefore, keeping the current account deficit at a sustainable level will depend on exchange rate stability.

The role of smart cities in sustainable development: empirical evidence from Türkiye

PurposeThis study aims to empirically examine the effects of smart cities on sustainable development for the period 1990–2019 for Türkiye.Design/methodology/approachThe relationship between smart cities and sustainable development was analyzed with the help of the ARDL Bounds Test. In addition, the consistency of the model was tested with the FMOLS estimator. The indicators of the smart city were selected following the literature to represent smart cities, and the author created the smart city index. The study used other variables thought to impact sustainable development as secondary data.FindingsThe results show that smart cities positively and significantly impact sustainable development in Turkiye in both models during the sampling period. In addition, while real GDP, population density, and financial development variables positively affect sustainable development, population density has a negative effect on sustainable development, according to the results obtained from FMOLS estimators.Originality/valueThe first novelty of this study is the creation of the smart city index. The second novelty is that there are almost no studies on the effects of smart cities on sustainable development, especially for Türkiye.

Determinants of Private Infrastructure Investment in India: A Post-liberalization Analysis

In spite of the initiatives by the Government of India for reviving private infrastructure investment, its growth is not up to the mark, especially after the COVID-19 pandemic. It is well known that the contribution of the private sector to infrastructure is inevitable to the overall growth of a country. An enquiry into its determining factors will help to explore the reasons behind the ebb and flow of private infrastructure investment in India and helps in finding solutions to revive it. This paper aims to identify the macroeconomic determining factors of private infrastructure investment in India after the liberalization period. ARDL-bound test results show that in the long run, there exists a positive long-run relationship between private infrastructure investment with gross domestic product (GDP), public infrastructure investment and domestic credit to the private sector, whereas in the short run, it was found that only the GDP and domestic credit to the private sector are statistically significant. Although there are many empirical studies that presented the contribution of macroeconomic factors to the growth of private investment in general, this study stands out as this is the first attempt to identify the determinants of private infrastructure investment.

International Trade, Institutional Quality and Poverty Level: A Case Study of Nigeria Economy

The study examined the differential and the interactive effects of disaggregated components of international trade and institutional quality on poverty level in Nigeria. The study employed ARDL Bound Test on the time series data spanning from 1981-2022. The findings of the study revealed mixed results both for the short run and long run. The short run result shows that (EXR) exchange rate has a positive and significant effect on poverty level with p-value of 0.0184; while the long run result shows no significant effect on poverty level in Nigeria. Also, the short run result of institutional quality (INQ) reveals a negative and significant effect on poverty level in Nigeria with the p-value of 0.0142; while the long run result shows a positive and significant effect on poverty level in Nigeria with the p-value of 0.0640. The short run results of (OM) oil import shows a negative and significant effect on poverty level with p-value of 0.0536; while the long run result shows a positive and significant effects on poverty level at p-value of 0.0808. The results of (NM) non-oil import had no significant effects on the level of poverty both in the short run and long run. The short run result of (NX) non-oil export shows a positive and significant effect on poverty level in Nigeria with p-value of 0.0230, while the long run result (NX) non-oil export shows a negative and significant effect on poverty level in Nigeria with the p-value of 0.0526. The short run and the long run results of (OX) oil export shows a negative and significant effect on poverty level at p-value of 0.000 and 0.0010 respectively. Furthermore, the results for interactive effects shows that EXR_INQ has a positive and significant effect on poverty at p-value of 0.0196 in the short run, while the long run result displays a negative and significant effect on poverty level in Nigeria at the p-value of 0.0609. The short run result of NM_INQ shows an insignificant effect on poverty level in Nigeria, while the long run result of NM_INQ shows a positive and significant effect on poverty level in Nigeria at the p-value of 0.0461. The short run result of NX_INQ shows a positive and significant effect on poverty in Nigeria with p-value of 0.0861; while the long run result of NX_INQ shows a negative and significant effect on poverty level with p-value of 0.0507. The short run and long run results of OM_INQ show no significant effect on poverty level in Nigeria. While, the result of OX_INQ shows a negative and significant effect on poverty level in Nigeria at p-value of 0.0562 and 0.0768 both in the short run and long run respectively. In conclusion, the outcome of the study shows that international trade has a significant effect on poverty level both in short run and long run. However, the country (Nigeria) is yet to benefit fully from the expected benefits associated with international trade. Therefore, the study recommends that in order for the country (Nigeria) to benefits fully from international trade, the country needs to strengthen her weak institutional quality to come in as a strong force where necessary to put things right and set the pace for sustainable development that allay poverty.

Symmetric Impact of Carbon Emissions on Poverty in South Africa: New Evidence from ARDL Bounds Test

The purpose of this study is to investigate the relationship between poverty and carbon emissions in South Africa covering the period between 1994 and 2020. The study employed the ARDL bounds test to assess the existence of a long run relationship between the variables. The results evidenced existence of a long run relationship between poverty, carbon emissions, economic growth and renewable energy consumption in South Africa. The results are such that carbon emissions have a positive and a significant effect on poverty in the long run. Therefore, with CO2 emissions having a positive influence on poverty, causes more losses in the socioeconomic system and reduces the ability of the population to cope with poverty. Therefore, it is recommended that the government should promote the growth of the South African carbon market, increase enterprise involvement through acceptable price and quota allocation, and work in tandem with other environmental measures to promote sustainable development. This will help alleviate poverty in South Africa.

The effect of alternative product prices on production balance: Empirical findings on the production of oilseed crops in Türkiye

Objective: The canola and oily sunflower products, which are similar in terms of cultivation areas, techniques, and conditions, are alternatives to each other. It is believed that product prices play an important role in deciding to cultivate these two products. Hence a study was conducted and the objective of this study was to this study was to examine the long and short term effects of product prices, especially alternative product prices, on production. Materials and Methods: The data for the study included the years 2002-2021 and were analyzed using the ARDL boundary test. Findings: According to the findings of the ARDL boundary test, a 1% increase in canola prices increases canola production by 4.72% in the long term, while a 1% increase in the prices of sunflower, an alternative product, decreases canola production by 5.37%. The error correction coefficient (-0.96) was found to be negative and statistically significant, indicating that imbalances in the short term will return to equilibrium levels approximately 1.04 years later. Conclusion: Changes in the prices of these two alternative products affect the increase or decrease in production. In this context, regulations can be made on production through price policies. Additionally, the findings of the study can contribute to production planning and increasing welfare.

Framework for Examining the Correlation Between Trade Liberalization and Employment in Nigeria

This research examines the relationship between trade liberalization and employment in Nigeria using a retrospective research approach. The study considers variables such as the employment rate, trade openness index, foreign direct investment, and currency exchange rate. The analytical framework combines classical linear regression and Auto Regressive Distributed Lag (ARDL) models to capture both short-term and long-term dynamics. Diagnostic tests, including descriptive statistics, Augmented Dickey-Fuller (ADF) test, Perron Unit Root Test, ARDL-Bound test, and Error Correction Model (ECM)-ARDL test, are conducted to analyze the collected data. The study utilizes secondary data from the statistical bulletin of the Central Bank of Nigeria (2018) covering the period from 1985 to 2018. The findings of the study are mixed. The error correction estimates indicate a negative relationship between the trade openness index and the employment rate. On the other hand, foreign direct investment shows a negative relationship with employment rate, but this relationship is not statistically significant. The exchange rate demonstrates a positive and significant correlation with the employment rate. It was recommended that, Diversifying Nigeria's economy by promoting domestic industries like agriculture, manufacturing, and services to create job opportunities and reduce import dependence. Implement effective labor market policies including job training, worker protections, and competitive labor market measures to mitigate negative impacts of trade liberalization on employment. Target FDI to sectors with high job creation potential, incentivizing investments, supporting technology transfer, and fostering partnerships for employment growth in Nigeria.

Remittances, Debt Service Payments and Economic Growth in Nigeria

The study investigates the intricate relationship between the effects of remittances (REMIT) and debt service payments (DSP) on economic growth (RGDP) as well as other key variables, external reserve (ER), foreign direct investment (FDI), and external debt (EXTD) on economic growth (RGDP) in Nigeria from 1995 to 2021. Various statistical techniques, such as Ordinary Least Square (OLS), Augmented Dickey Fuller (ADF) tests and ARDL, were used. The result indicates the existence of a positive correlation between RGDP and FDI; DSP and ER exhibit a moderate negative correlation, while REMIT and DSP show a strong negative correlation. ER and REMIT indicate a correlation, while EXTD and ER indicate a negative correlation. All variables are I(1) and the ARDL Bound test for co-integration indicates that a long-run relationship exists between dependent and independent variables. ARDL estimation shows that only the coefficient of external debt is significant. The R2 shows that 84% of the variation in RGDP is explained by the independent variables. The test for autocorrelation (DW = 2.33) indicates no autocorrelation in the error term.
 This study recommends that policymakers should implement measures to attract and retain foreign investments, given the positive impact of FDI on RGDP, and Policymakers should explore strategies to channel remittances into productive sectors, such as investments in infrastructure, education, and small-scale enterprises.

EKOLOJİK AYAK İZİ VE TİCARI AÇIKLIK BAĞLANTISI: G7 ÜLKELERİ ÖRNEĞİ

The ecological footprint basically aims to measure the impact of humans on the ecosystem. The measurements made include the area required to produce the materials consumed in terms of the consumption footprint and the area required to absorb the carbon dioxide emissions. No distinction is made between domestic and foreign producers in the production by the countries. The countries with the most developed industry and the highest impact on the ecosystem in this sense appear as the countries with the highest footprint in the ecosystem. This study, based on the ecological footprint data of seven industrialized countries (G7) and these countries between 1984 and 2019, aims to reveal the effect of ecological footprints on trade openness. Panel data analysis and ARDL Boundary Test / PMG (Pooled Average Group) method was used to obtain the results. DOLS and FMOLS methods were also used to compare both economic and empirical results and for consistency. As a result of the analysis, as the impact of industrialized countries on the ecosystem increases, their trade openness also increases in the short and long term. This effect could be seen most clearly in the United States (USA), which has the most developed industry. This research paper will be pointed out these important issues.

Foreign Direct Investment, External Debt and Economic Growth Nexus: Evidence from Nigeria

The purpose of this research is to ascertain if inflow of FDI and external debt has significantly impacted the growth of the Nigerian economy from (1980-2017) using the ARDL-ECM framework. Data was extracted from the CBN Statistical Bulletin and WDI dataset of the World Bank. Results from the ARDL estimation output shows that foreign direct investment and external debt possessed a positive and significant effect on economic growth in Nigeria only in the short-run. On the other hand, results from the ARDL Bounds Test depicts an absence of a long-run relationship between foreign direct investment, external debt and economic growth in the case of Nigeria. The study recommended that borrowed funds acquired to finance capital and developmental projects should be properly channelled towards the actualisation and full implementation of such projects.

FinTech revolution in mineral management: Exploring the nexus between technology adoption and sustainable Resource utilization in an industry 4.0 context

This study investigates the impact of FinTech adoption on sustainable mineral management policies in Australia within the context of Industry 4.0, using quarterly data from 1990Q1 to 2022Q4. Employing the ARDL-Bounds testing approach, Granger causality analysis, and innovation accounting matrix, the research finds a short-term positive association between FinTech adoption, technological readiness, and green mineral extraction. However, both in the short and long run, investment in sustainable mining technologies, government support for FinTech in mining, and environmental compliance exhibit a negative relationship with resource management. Bidirectional causality is observed between regulatory support for mining FinTech, technological finance solutions, and environmentally conscious mineral practices, while unidirectional causality exists from FinTech adoption to sustainable mining practices. Impulse response functions offer insights into the future impact of variables on eco-conscious mining policies, indicating positive influences from FinTech adoption, government support for FinTech in mining, and technological adaptability over the next decade. Conversely, eco-friendly mining investments, environmental conformity, and social license to operate will impact sustainable mineral utilization. Variance decomposition analysis highlights the most significant shocks on eco-friendly resource management over the next ten years, emphasizing the role of sustainable mining technologies, FinTech adoption, and public support for mining endeavours. In the transition to Industry 4.0, this research provides crucial insights for responsibly utilizing Australia's natural resources by leveraging financial technology and technological readiness.

Comportamento da Taxa de Câmbio nos BRICS

ABSTRACT This article aims to investigate the behavior of exchange rate in the BRICS countries, with an emphasis on exchange rate passthrough and exchange rate determination empirical models. By applying the ARDL Bounds Testing Approach Methodology, from January 2005 to December 2019. Our main results show that: i) there is a long run cointegration among the variables analyzed for all estimated models; ii) there is a very slow speed of adjustment towards the long run equilibrium; iii) there is evidence of exchange rate passthrough to inflation mainly in the long run, but not as strong as before; iv) there is no evidence of exchange rate overshooting; v) international reserve accumulation can be considered a partial explanation for the evidence of no exchange rate overshooting.