ARDL Technique Research Articles

Transport Sector Emissions and Environmental Sustainability: Empirical Evidence from GCC Economies

This paper analyses the asymmetric effects of air transport on CO2 emissions from transport in the Gulf Cooperation Council countries. The analysis utilises CO2 emissions from transport, which are more relevant and critical for assessing the environmental performance of transport. Moreover, the current paper has examined this relationship with further macroeconomic variables within the Gulf Cooperation Council context. This paper uses a significant sample of six nations and spans an extensive period from 1990 to 2020. The second-generation Auto Regressive Distributed Lag model was applied to enable the examination of regional heterogeneity and the assessment of transport’s effect on CO2 emissions across several countries. The intensity of environmental degradation may differ among the Gulf Cooperation Council countries, hence, environmental policies should include trends in transport emissions. Long-term estimates based on the ARDL technique suggest that energy consumption, economic growth, and air travel exacerbate the ratio of CO2 emissions from transport and pollution levels. The results can be utilised to develop a transport-related environmental strategy that aligns with the sustainable development goals. The paper proposes strategies for achieving a sustainable environment and energy future.

Quantifying carbon emissions through financial development in Ghana: empirical evidence from novel dynamic ARDL and KRLS techniques

Quantifying carbon emissions through financial development in Ghana: empirical evidence from novel dynamic ARDL and KRLS techniques

Analysing Real Exchange Rate Effects on the Trade Balance in South Africa

For years, policymakers and economists have been researching the significance of the native currency value versus other currencies in favouring the country’s trade balance and total. Therefore, this study investigates the impact of the real exchange rate change on the trade balance in South Africa. The study used annual time series data from 1980 through 2022. This study used the ARDL technique to analyse data. Variables used in this study include the trade balance, real exchange rate, terms of trade, money supply, South Africa’s gross domestic product, and the Chinese gross domestic product. Bounds tests showed that the variables are cointegrated. According to the empirical findings, the real exchange rates have significantly influenced the trade balance positively in the short run but in the long run, have a negative significant influence on the trade balance. The terms of trade have a positive significant influence on the trade balance in the short run, but it appears to be positively significant in the long run. The money supply in the short run has an insignificant negative relationship with the trade balance but in the long run, has a significant positive relationship with the trade balance. The SA gross domestic product has a significant negative impact on the trade balance both in the short and long run. Lastly, the Chinese gross domestic product has a negative insignificant relationship with the trade balance in the short. However, in the long run, it has a positive significant relationship with the trade balance. This proves that a rise in Chinese GDP, as a proxy for foreign economic activity, boosts South African exports to the rest of the world in the long term. As a result, the trade balance improves as China imports minerals from South Africa for production purposes. The dependence on currency depreciation to enhance trade in South Africa can improve its trade balance, but it may also damage the economy due to the country’s reliance on imports. However, the advice to weaken the South African currency should not be so harsh as to have a negative impact on the importation of key capital goods critical to the growth and development of the South African economy. It is recommended that the government reduce demand for imported products and boost domestic manufacturing, which might lead to domestic products being exported. The central bank must also stabilize the currency to increase competitiveness by decreasing the overseas price of exports and increasing the cost of imports.

Exploring Saudi Arabia’s 2060 net zero-emission paths via fractional frequency Fourier procedures. The imperatives of resource efficiency, energy efficiency, and digitalization

ABSTRACT By applying the novel fractional frequency Fourier ARDL technique, we unraveled the intricacies underpinning resource efficiency, energy efficiency, digitalization, and environmental sustainability in Saudi Arabia. Compelled by the conflicting narratives of prior investigations and the need for updated insights, the analyzed time series spanning 1990–2022 periods divulged interesting insights amenable to policy optimization. First, the fractional frequency Fourier ADL cointegration procedure reveals a long-term association among all the enlisted series. Second, resource and energy efficiencies, as well as digitalization, improved environmental quality by limiting carbon intensities and ecological footprint with some heterogeneous attributes across the timeframes. Notably, while resource efficiency is more effective toward ecological footprint mitigations, energy efficiency proves more efficient for carbon intensity reductions. Lastly, the fractional frequency Fourier Toda-Yamamoto causality test affirms the predictive attributes of the enlisted series on environmental performance. Hence, these factors are critical to KSA’s environmental sustainability paths. Based on these empirical discoveries, policymakers in KSA must pay adequate attention to the efficient utilization of resources and energy to complement other steps toward realizing Saudi Arabia’s 2060 net zero-emission. Likewise, policymakers must ensure the efficient allocation of income to environmentally sensitive ventures to curtail its negative repercussions on the environment. Other relevant steps to curtail carbon intensities and ecological footprint for optimal environmental performance in KSA have been highlighted.

How green strategies and policies influence production‐based emissions, industrial development and sustainable development goals?

AbstractSustainable development is a global imperative; however, it is unattainable without a transformation of the production sector. Therefore, the study examines the impact of green strategies [Industrial innovation, Eco‐tech imports‐IMPT, and Green finances‐GFN] and policy interventions [Environmental policy‐EPY and Environmental taxes‐ETX] on production‐based emissions (PBE), industrial value addition (IVA), and sustainable development goals (SDG). The study covers the years 1990–2022 and focuses on 25 European nations. In addition, the pooled mean grouped (PMG)‐ARDL and mean group (MG) techniques were used to assess the short‐ and long‐term parameters. The country‐specific relationships are evaluated using the Bootstrap Granger Causality test. The results affirm that green strategies and policy interventions mitigated PBE and increased the IVA and SDG in Europe. However, globalization and energy use increase the PBE and IVA while impeding progress toward the SDGs. The mitigation technologies fueled with green energy (MPRE) came out as the ultimate solution, which requires green technologies and sustainable practices across all sectors. Therefore, it is suggested that governments implement eco‐friendly policies that boost GFN, reduce pollution, increase green output, and meet the Sustainable Development Goals.

ANALYSIS OF THE DYNAMIC RELATIONSHIPS BETWEEN INDUSTRIAL, ENVIRONMENTAL FACTORS, AND THE UNEMPLOYMENT RATE. AN ECONOMETRIC APPROACH

ABSTRACT: The sustainability of socio-economic and industrial systems is a key concern, particularly within the framework of the 2030 agenda. A holistic understanding of the functioning and relationships of these systems is essential if we want to implement practical actions to achieve sustainability. This study uses econometric techniques, such as the distributed lag autoregressive model, to explore the interactions between industrial and environmental factors and the unemployment rate. The variables analyzed include working hours, wage costs, and tropospheric ozone concentration, over two periods: 2008-2020 (reduced period) and 2008-2024 (extended period). Between both periods, substantial differences have been found in the variables significantly influencing the unemployment rate. The significance of working hours and ozone (O3) concentration, determinants of the unemployment rate in the reduced period, are replaced by wage costs, determining the unemployment rate in the extended period. The results show that an initial increase in worked hours reduces unemployment, while wage increases and high levels of O3 tend to increase the unemployment rate. Granger causality analysis suggests bidirectional relationships between unemployment, wage costs, and O3 concentration, highlighting the connection between the different aspects and feedback collateral effects. The study underscores the need for balanced socioeconomic policies that promote both economic growth and environmental sustainability and the promotion of fostering of technological innovations. The importance of policies that mitigate the adverse effects of wage increases on employment is underlined, and that favor a more sustainable development model capable of decoupling economic well-being from intensive resource consumption. Keywords: Sustainability, Socioeconomic systems, ARDL techniques, Granger causality, unemployment, O3 concentration, working hours, hourly wage.

Sustainable integration of mineral resources, low carbon transition, and economic resilience in China

Mineral sustainability has become a crucial topic for economists in recent decades. This study provides key insights into China's sustainability challenges, particularly regarding ferrous mineral production, economic resilience, and low-carbon transition goals. Using data from 1980 to 2022 analyzed with the ARDL technique, the research highlights significant negative impacts of ferrous mineral production, economic uncertainty, and carbon emissions on green energy progress. This underscores the need for urgent actions to enhance sustainability in the mineral sector and support green energy initiatives. Economic instability hampers long-term green energy development, making economic resilience essential. Sustainable population management is also crucial due to its effects on green energy advancement. Conversely, ICT advancements offer promise for sustainable development. China should implement a comprehensive policy framework focused on sustainable mineral use, carbon reduction, and economic stability, including measures such as promoting electric vehicles and improving green tax efficiency.

The moderating role of energy consumption in the relationship between trade openness and environmental degradation: evidence from Pakistan and China

Every country wants to accomplish the sustainable development goal. For this reason, each country protects the environment, expressing widespread concern over environmental degradation. Furthermore, trade is the most essential component of economic growth, and energy is the primary source of production and environmental degradation. Therefore, the study aims to investigate the moderating effect of energy consumption on the link between trade openness and environmental degradation in the case of China and Pakistan. It will utilise data from 1990 to 2020 and employ ARDL and Granger causality estimation techniques. This study revealed that energy consumption and GDP growth are constructive. At the same time, inflow, FDI, and trade openness have negative consequences on CO2 emission in China, while all the variables have positive effects on CO2 emission in the case of Pakistan. This study confirms the existence of the Environmental Kuznets Curve and the moderation effect of energy consumption in both countries. This study also found that there exists a one-way causality running from CO2 to energy consumption and trade openness to CO2 in the case of China. This study suggested focusing on screening and identifying environmentally friendly enterprises.

Management as a Factor of Socio-Economic Development of Small and Medium-Sized Businesses of Ukraine in Conditions of Instability

Small and medium-sized enterprises (SMEs) in Ukraine are increasingly challenged by ongoing economic instability, characterized by currency volatility, inflationary pressures, and uncertain political dynamics. This paper explores the role of management in the socio-economic development of small and medium-sized businesses (SMEs) under conditions of instability. Time series from 2001 to 2023 is analyzed for Ukraine. ADF and PP unit root test shows that data is stationery at first difference. ARDL bound test shows that time series data is cointegrated. Long-run estimates of ARDL technique show that management practices, socioeconomic development, research & development, technology adoption and employee skill & training have significantly positive relationship with SMEs growth rate, whereas, economic instability decrease the SMEs growth rate in Ukraine during studied time. Government of Ukraine should reform and bring new policies in all sectors especially manufacturing and production sector. Digitalization of the economy is foremost requirement of the Ukraine.

Impact of Foreign Direct Investment on Renewable Energy Consumption: Findings from Bootstrap ARDL with a Fourier Function

Renewable energy consumption (REC) is viewed to be a core component for delivering sustainable economic growth. It is broadly acknowledged that REC can significantly contribute to lessening the burden of carbon emissions on the environment and fostering economic progress. Although foreign direct investments (FDI) are perceived as a key catalyst of REC growth, in some cases they can cause negative effects on REC. While there are many studies in the literature exploring the effects of FDI on variables such as economic growth, employment and foreign exchange deficits, the amount of studies examining the effect of the said variable on REC is very limited. The existing study attempts to fill this knowledge gap concerning the relationship between FDI and REC in Türkiye. This research investigates the long-run impact of FDI on RECs in Türkiye for the period 1973-2022 using the bootstrap Fourier ARDL technique. Empirical analysis reveals that FDI affects REC negatively, while GDP has no effect. The study's conclusions confirm the Pollution Haven Hypothesis (PHVH) in Türkiye, suggesting that the country has emerged as a desirable destination for businesses seeking to relocate their operations and evade the strict environmental regulations in their home countries.

Renewable Energy Consumption and Economic Growth in Nigeria Nexus

With rising rates of globalization, increasing climate change and economic growth, energy usage and energy security, governments are paying more attention to the impact of renewable energy consumption on the economies. The paper examines the relationship between renewable energy consumption and economic growth in Nigeria using a time series data from 1996 to 2021. The results of the unit root show mixed stationarity from our variables which result in the usage of ARDL technique of analysis. The long run results show that renewable energy was negative and significant thus, validates the conservative hypothesis. C02 was also negatively significant to RGDP while labor force was positively significant. The ECM shows 77% adjustment level backs to equilibrium. Granger causality test validated the feedback hypothesis of no causality among the renewable energy and the Nigeria economy.

COP 28 Policy Perspectives: Achieving Environmental Sustainability through FDI, Technological Innovation Index, Trade Openness, Energy Consumption, and Economic Development in N-11 Emerging Economies

Despite remarkable success in attracting foreign direct investment (FDI) to achieve maximum economic growth, the Next-11 emerging economies grappling with an undesirable situation of environmental degradation have become a hot topic at COP28. Researchers have long focused on this connection, emphasizing the urgent need for international and national environmentalists to promote sustainable development (SD) in these rapidly growing economies under the United Nations (UN) Framework Convention on Climate Change action plans. As a result, this study examines the role of FDI in the N-11 emerging economies, focusing on energy usage and technological innovation within the theoretical framework of the Halo-Haven hypothesis, covering the period from 1990 to 2022. We utilize ARDL, FMOLS, and DOLS techniques to analyze both short-term dynamics and long-term equilibrium relationships, effectively managing heterogeneity, time dynamics, and cross-sectional dependence issues to produce comprehensive results. The long-term analysis supports the haven hypothesis, demonstrating an affirmative relationship between FDI, economic growth, and carbon emissions, whereas energy usage is negatively associated with carbon emissions. Furthermore, the D-H test established a reciprocal causal relationship between variables such as FDI, economic growth, trade openness, and environmental pollution. However, we found a one-way causal correspondence in the usage of green energy, the technological innovation index, and carbon emissions. Given the mixed findings, policymakers should focus on attracting FDI to the green energy sector while reinforcing regulations and implementing stringent oversight for FDI in energy-intensive industries. This approach will ensure that such investments adhere to high environmental standards, thereby benefiting future generations.

Nexus between Climate Change, Technological Inputs, Energy Consumption and Cereal Production in India: An ARDL approach

Agriculture is vital to India's economy and food security but is highly vulnerable to climate change. This study examines the impact of rainfall, temperature, arable land, energy consumption, fertilizer, and technology inputs on cereal production in India from 1965 to 2018 using ARDL and Toda-Yamamoto Granger Causality techniques. Results show temperature negatively affects cereal production, while rainfall, arable land, energy, fertilizer, and technology have a positive impact. There is a unidirectional causal relationship between these factors and cereal production. The study suggests adopting modern technology, prioritizing organic farming, educating farmers, investing in agricultural R&D, and developing sustainable irrigation infrastructure.

Long-term Impact of FDI-Corruption Interaction on Domestic Investment in Nigeria

Over the past three decades, Nigeria has experienced unstable domestic investment and foreign direct investment inflows, and the country continues to face rising corruption and related problems. An ARDL technique has been adopted to explore the long-term FDI’s impact on domestic investment including evaluating if the FDI-domestic investment nexus is dependent on the control of corruption in Nigeria over this period. The bounds test result shows an evidence of a long-term relation amongst FDI, domestic investment and corruption control (including GDP per capita, lending rate, exchange rate and oil price). We find that increasing inward FDI reduces (crowd-out) domestic investment and greater corruption control (lowering corruption) leads to a higher domestic investment in Nigeria over the long-term. Also, the influence of FDI on domestic investment depends on (or varies with) the control of corruption. FDI crowd-in domestic investment at greater corruption control than at lesser corruption control in the long-term. Other significant long-term influencers of domestic investment are the exchange rate and oil price. Given these outcomes, the study offers some recommendations to boost domestic investment in Nigeria.

Navigating climate challenges: Focusing on the effectiveness of natural resource rents, fintech, green finance, environmental quality, and digitalisation

China indeed has made great efforts to maintain environmental quality. However, it should be noted that climate challenges normally emerge when certain nations heavily depend on non-renewable resources to meet energy demands. It is quite difficult to reduce the dependency because such economies are ranked as a major importer of fossil fuel resources. This means, pollution and emission rates in subsequent economies are increasing with the passage of time. The spontaneous fintech growth and financial inclusion, natural resource volatility and increasing economic activities in China have triggered vicious climate challenges. Therefore, the study intends to explore the relationship between fintech, financial inclusion, green finance, natural resource rent and environmental quality in China over the time period of 1998–2022. Using ARDL technique, it was found that fintech, financial inclusion and green finance enhance environmental quality, whereas natural resource rents are responsible of degrading environmental quality. Therefore, Chinese authorities should use resources related to green finance to facilitate fintech industry. Besides, blending fintech solutions such as NFTs and cryptocurrencies with traditional financing for environmental sustainability, there is also a need to establish standard laws and procedrues for these products.

Dynamic impacts of economic and environmental performances on agricultural productivity in Somalia: Empirical evidence from ARDL technique

Dynamic impacts of economic and environmental performances on agricultural productivity in Somalia: Empirical evidence from ARDL technique

Beyond the Grid: An In-depth Analysis of Economic, Demographic, and Technological Drivers of Energy Poverty in 11 Developing Countries

This research examines the impact of critical factors, including GDP, population, internet, renewable power, human capital, and global link, on energy poverty in the New-11 nations, using a Panel ARDL technique. Energy poverty rises with GDP and population growth but is significantly reduced by internet access and renewable energy. Human resources and globalization present a mix of insignificant functions. Short-run illustrations depict initial movement in the long run, which abruptly stabilizes as renewable energy costs become apparent. The implications of the findings of energy poverty are the essential and inescapable policy calls for targeted investments in digitalization, sustainable energy, people, and intelligent globalization.

Budget Deficits in Pakistan: A Time Series Analysis of The Impact of Economic Political and Institutional Factors

This article aims to provide a thorough empirical examination of the budget deficit of Pakistan, spanning a period of four decades from 1976 to 2023. In order to fulfill the objective of the study, a wide range of economic, political, and institutional variables have been extensively examined. The ARDL technique to cointegration has been employed due to the time series structure of the variables. The objective of this article is to examine the long-term correlation between the budget deficit and its several drivers, such as inflation, debt services, economic expansion, and government size. The study's findings offer important insight into the dynamic connections between the budget deficit and its different determining factors. In Pakistan, inflation has become a major and harmful factor contributing to the budget deficit. The data demonstrates that a continuous increase in prices has resulted in a higher budget deficit. Furthermore, empirical evidence indicates that a significant portion of the deficit that exists is attributed to debt servicing charges. This highlights the importance of implementing effective regulations to control debt. Economic development exerts a positive and major impact on the management of budget deficit. In the case of Pakistan, a higher growth rate is correlated with a lower budget deficit. Moreover, this size of government has an adverse impact on the budget deficit. This demonstrates the necessity for the effective management of public finances. Corruption has an insignificant impact on the increase of the budget deficit in Pakistan. Moreover, the relationship between the political variables and budget deficit is not significant. The study fails to identify the relationship between the elections and democratic processes. This finding is unanticipated and the cause of rejection of one of the main hypothesis of the study. This may be attributed to the fact that the concerns of the political factors may be comparatively minor as compared to the economic ones. Keeping in view the findings of the current study and the previously mentioned variables, therefore this study provides an important insight into the dynamic relationship between the budget deficit and others economic, institutional and political factors. The findings of this study has generated fresh avenues for the future research, especially for the examinations of the impact of political factors because, this hypothesis has been rejected in our study.

Dynamics of Indonesian stock market interconnection: Insights from selected ASEAN countries and global players during and after the COVID-19 pandemic

This study investigates the evolving dynamics of the Indonesian stock market in relation to selected ASEAN countries (Malaysia, Singapore, Thailand, and the Philippines) and global economic players (the US, Japan, and China) during and after the COVID-19 pandemic. Utilizing weekly data for the pandemic era (January 2020 – December 2021) and the post-pandemic period (January 2022 – December 2023), the ARDL technique reveals intricate relationships among these capital markets. Long-term analyses indicate that Singapore and the Philippines positively influenced Indonesia’s market during the pandemic. At the same time, China had a negative impact, highlighting heightened sensitivity and interconnectedness during crises. Since the pandemic, Malaysia, Singapore, the US, China, and Japan emerged as key positive influencers, with other countries showing insignificance. In the short term, during the pandemic, Malaysia, Thailand, and China had a significant positive impact on Indonesia’s capital market. However, only Malaysia continued to exert a significant influence on Indonesia after the pandemic. These findings provide valuable insights into the dynamic interactions shaping Indonesia’s stock market performance amidst global economic fluctuations and crises.

Do FDI and foreign remittance inflows affect the unemployment rate? A new insight

This study aims to investigate the impact of FDI and foreign remittances on unemployment from 1991 to 2020 from Bangladesh's perspective. With the use of EViews 10 version, this study used the ARDL technique to capture the long-run and short-run estimations. The study utilized the unemployment rate as a dependent variable and foreign direct investment (FDI) and foreign remittances as independent factors. The remaining factors include exchange rate, GDP growth, exports, and inflation rate; these are controllable variables. The results of the research show that FDI and foreign remittance have a positive and statistically significant association with unemployment rate in Bangladesh, both in the long run and in the short term. Thus, according to the findings, FDI and foreign remittances are creating more unemployment in Bangladesh. Unlike the general economic theory, which states that the bidirectional relationship of FDI with the unemployment rate, as well as foreign remittances with the unemployment rate, is inverse, these research outcomes basically suggest that FDI and foreign remittance inflows are displacing domestic labor with, perhaps, a low-cost, highly skilled overseas workforce, and also indicate that there might be an increasing trend in the brown-field investment sector. For policy implications, this investigation lends support to the theory that Bangladesh should focus more and more on skilled development policies for domestic workers and create a sound environment for foreign investors in order to reduce the country's unemployment rate.