Asymmetric Nexus Research Articles

An asymmetric nexus between clean energy, good governance, education and inward FDI in China: Do environment and technology matter? Evidence for chines provincial data

The inflows of FDI has revealed a catalyst effect on economic progress with sustainability. Furthermore, continual inflows of FDI prompts. The motivation of the study is to evaluate the effects of energy, good governance, education, and environmental regulation on inflows of FDI in china for the period 1997–2018. A panel data econometrical technique has been implemented, including panel unit root, cointegration, CS-ARDL, and asymmetric ARDL. Moreover, the directional causality has been investigated by employing the H-D causality test. According to the coefficients for CS-ARDL, the study documented a positive statistically significant linkage between explanatory variables, i.e., good governance, education, and energy, and explained variables, especially in the long run, whereas environmental regulation established an adverse association with FDI inflows in China. In terms of the standard Wald test, the study confirms the asymmetric linkage between explanatory variables and FDI in the long-run and short-run estimation. Referring to the asymmetric coefficients of good governance, education, and energy revealed a positive tie with inflows of FDI, while a negative statistically significant connection was disclosed between environmental regulation and inflows of FDI. Furthermore, directional casualty test established asymmetric shocks in CE [FDI←→ CE+;FDI←→CE−], negative shocks in education [EDU− ←→FDI]. Based on study findings policy suggestions has derived for future development

Asymmetric nexus between Bitcoin, gold resources and stock market returns: Novel findings from quantile estimates

In the context of the debate on Bitcoin, gold resources, and stock markets, the current study examines the nexus between the gold market, Bitcoin, and stock market returns. We explore the effects of gold resources, the stock market, and Bitcoin within the Chinese context using the data in Chinese currency and under the lens of the Chinese economic structure. We collected daily data from 3 November 2014 to 31 October 2019 on all our key variables of interest. The study employs the quantile-on-quantile and quantile regression methods for comprehensive empirical analysis. Key findings suggest significant effects of Chinese stock market returns on Bitcoin and gold price effects on Bitcoin exist. In addition, gold prices negatively affect stock market returns and vice versa. The study offers novel implications regarding future cryptocurrency policies, stock markets, and resources in a Chinese context.

Asymmetric nexus of coal consumption with environmental quality and economic growth: Evidence from BRICS, E7, and Fragile Five countries by novel quantile approaches

The study analyzes the asymmetric nexus of coal consumption with environmental quality and economic growth. In this context, the study focuses on eight leading emerging countries that take place in BRICS, E7, and Fragile Five groups. Also, the study uses yearly data from 1989 to 2021 and performs novel quantile methods, such as Granger Causality-in-Quantiles and Quantile-on-Quantile Regression (QQR). Also, quantile regression is used for robustness check. The results present that (i) there are causalities from coal consumption to both environmental quality and economic growth at 10% significance, whereas quantile and country-based results differ; (ii) effects of coal consumption on environmental quality are much stronger in lower quantiles for Brazil, Indonesia, India, South Africa, and, Turkey, but in higher quantiles for China, Mexico, and Russia; (iii) effects of coal consumption on economic growth are much stronger in lower quantiles for Brazil, Indonesia, India, Russia, South Africa, and Turkey; in higher quantiles for China; lower and middle quantiles for Russia; and all quantiles for Mexico; and (iv) the robustness of the QQR results are validated. Hence, empirical outcomes underline the highly crucial effects of coal consumption on environmental quality and economic growth in the countries. The results imply that policymakers should focus on efforts to decrease coal consumption gradually by applying a macro transition plan to increase environmental quality without causing economic decline by considering changing effects of coal consumption at quantiles and countries.

Asymmetric nexus between commercial policies and consumption-based carbon emissions: new evidence from Pakistan

The current study extends the previous literature by exploring the effects of a newly discovered driver, i.e., import taxes (as a proxy for commercial policies), on the consumption-based carbon emissions (CCO2e) for 1990Q1-2017Q4. For empirical analysis, several tests and methods, including Augmented Dickey–Fuller unit root test, Zivot–Andrews unit root test, asymmetric cointegration bound testing approach, non-linear ARDL, Wald-test, Granger causality test and wavelet quantile correlation (WQC) method are utilized. Furthermore, NARDL technique estimates reveal that contractionary commercial policy enhances the environmental quality by disrupting the detrimental effects of CCO2e. However, expansionary commercial policy escalates the environmental pollution by boosting the carbon emissions. Also, the exports and the renewable energy improve the ecological quality; however, GDP deteriorates the atmospheric quality by increasing the CCO2e. Besides, WQC method and the trivariate Granger causality test are deployed to confirm the robustness of the results. Based on the findings, some crucial policies are also recommended for sustainable and green development in Pakistan.

Oil Price and Stock Market Nexus in Nigeria: An Asymmetric Cointegration Based on Non-Linear Ardl Approach

This paper examined the asymmetric nexus between oil price and stock prices in Nigeria using nonlinear autoregressive distributed lag model (NARDL) to capture both long-run and short-run asymmetric relations. To achieve this, monthly time series data from 2014m1 to 2023m6 were gathered from the Central Bank of Nigeria (CBN) and the Nigeria Exchange Group (NGX). The estimation results confirmed the existence of both long-run and short-run asymmetry behaviour of stock prices in Nigeria. Precisely, in the long-run, interest rate, exchange rate and oil price increase tend to increase stock price levels in Nigeria. Similarity, in the short-run, only oil price increase seems to increase stock prices while oil price decrease seems to decrease stock prices in Nigeria. Furthermore, the empirical findings from asymmetric effect show that negative changes in exchange rate fell sharply due to decrease in oil price which further translate to stock price, suggesting the existence of feed backs from oil to stock markets. The paper recommends that investors should invest in Nigerian stock market in that a hike in oil price leads to appreciation in domestic currency, which translate to appreciation in stock price in Nigeria and vice versa. This suggests that investment in stock market can be used as a tool to ease the domestic currency pressure to a sustainable level. Hence, the need to maintain stable oil prices cannot be overstressed.

Exploring the dynamic link between FDI, remittances, and ecological footprint in Pakistan: Evidence from partial and multiple wavelet based-analysis

The current study aims at studying the asymmetric nexus between foreign direct investment (FDI), foreign remittances inflow (RMIT), and ecological footprint (EF) for Pakistan from 1976Q1-2020Q4. To this end, our article deploys Morlet’s wavelet method. Simply, the recent paper employs Wavelet Coherence Transform (WCT), Partial and Multiple Wavelet Coherence (PWC & MWC) to divulge the dynamic nexus among the series under study. With respect to frequency and time domains, the significant wavelet coherence and robust lead-lag association are inferred. Furthermore, FDI exhibits a strong co-movement with EF, implying that variations in the FDI inflows are highly sensitive to the environment. Likewise, RMIT demonstrates a significant association with EF. Besides, the frequency domain causality test validates our findings by confirming the causal links of FDI and RMIT with EF. Based on the results, some salient policies are suggested to tackle the exigency of environmental pollution.

Symmetric and asymmetric nexus between economic policy uncertainty, oil price, and renewable energy consumption in the United States, China, India, Japan, and South Korea: Does technological innovation influence?

This study aimed to gauge the impact of economic policy uncertainty, oil price, and technological innovation on renewable energy consumption in the top five oil-importing nations for the period 1990–2021. The study employed a linear and nonlinear framework in exploring the association and variable elasticities on renewable energy consumption. According to linear assessment, the study documented positive effects from technological innovation and oil price volatility, whereas economic policy uncertainty adversely caused renewable energy integration, especially in the long run. The study disclosed long-run and short-run asymmetric connections between TI, EPU, and REC for asymmetric assessment. For directional causality, the study documented feedback hypothesis that explain the nexus between oil price and renewable energy consumption in China [OIL←→REC]; economic policy uncertainty and renewable energy consumption [EPU←→REC] in China, India, Japan, and South Korea; and technological innovation and renewable energy consumption [TI←→REC] in South Korea. On a policy note, the study established that efficient energy transition from fossil fuel to renewable energy demands economic stability and, therefore, stability must be ensured. Furthermore, oil prices should be considered while formulating energy policies.

A symmetric and asymmetric nexus between environmental sustainability and tourism development in BRIC nations: What is the role of good governance and globalization?

The motivation of the study was to gauge the impact of environmental quality (EQ), good governance (GG), and globalization (GLO) on tourism development in BRIC nations for the period 1990–2021. The study implements linear and nonlinear frameworks for evaluating the elasticity of explanatory variables on tourism and the directional association by using the non-granger causality test. Combined cointegration test statistics show a long-run association between EQ, GG, and GLO and tourism development in BRIC nations. Furthermore, the long-run association in the empirical estimation is established in both linear and nonlinear framework assessments. Referring to linear assessment, the study documents the positive, statistically significant linkage between good governance, globalization, and tourism development, implying that political stability, governmental effectiveness, and accountability foster tourism development. Furthermore, global economic and financial integration opens a window for tourism development by inducing the economy’s international tourism. On the other hand, environmental degradation reveals adverse statistically significant influences on tourism development, suggesting that the environmental stability in the form of healthy and amicable ambiance positively triggers tourism development, especially in the long run. According to the test statistics of the standard Wald test, it is obvious that there is an asymmetric association between explanatory variables such as EQ, GG, and GLO and tourism development in the long-run and short-run assessment. The directional causality test documented bidirectional causality in explaining the causality between environmental quality and tourism development in Brazil, India, and China, good governance and tourism development in India, and globalization and tourism development in China. On a policy note, the study advocated that BRIC has to ensure environmental protection and governmental effectiveness to promote sustainable development in the tourism sector.

Does an asymmetric nexus exist between exports and economic growth in Pakistan? Recent evidence from a nonlinear ARDL approach

Does an asymmetric nexus exist between exports and economic growth in Pakistan? Recent evidence from a nonlinear ARDL approach

Impacts of COVID-19 on global stock sectors: Evidence from time-varying connectedness and asymmetric nexus analysis

In this paper, we analyze the impact of the COVID-19 crisis on global stock sectors from two perspectives. First, to measure the effect of the COVID-19 on the volatility connectedness among global stock sectors in the time–frequency domain, we combine the time-varying connectedness and frequency connectedness method and focus on the total, directional, and net connectedness. The empirical results indicate a dramatic rise in the total connectedness among the global stock sectors following the outbreak of COVID-19. However, the high level of the total connectedness lasted only about two months, representing that the impact of COVID-19 is significant but not durable. Furthermore, we observe that the directional and net connectedness changes of different stock sectors during the COVID-19 pandemic are heterogeneous, and the diverse possible driving factors. In addition, the transmission of spillovers among sectors is driven mainly by the high-frequency component (short-term spillovers) during the full sample time. However, the effects of the COVID-19 outbreak also persisted in the long term. Second, we explore how the changing COVID-19 pandemic intensity (represented by the daily new COVID-19 confirmed cases and the daily new COVID-19 death cases worldwide) affect the daily returns of the global stock sectors by using the Quantile-on-Quantile Regression (QQR) methodology of Sim and Zhou (2015). The results indicate the different characteristics in responses of the stock sectors to the pandemic intensity. Specifically, most sectors are severely impacted by the COVID-19. In contrast, some sectors (Necessary Consume and Medical & Health) that are least affected by the COVID-19 pandemic (especially in the milder stage of the COVID-19 pandemic) are those that are related to the provision of goods and services which can be considered as necessities and substitutes. These results also hold after several robustness checks. Our findings may help understand the sectoral dynamics in the global stock market and provide significant implications for portfolio managers, investors, and government agencies in times of highly stressful events like the COVID-19 crisis.

An Asymmetric Nexus between Urbanization and Technological Innovation and Environmental Sustainability in Ethiopia and Egypt: What Is the Role of Renewable Energy?

The present study investigates the nexus between urbanization, technological innovation, renewable energy consumption, and environmental quality in Egypt and Ethiopia from 1980 to 2020 by employing symmetric and asymmetric frameworks. Referring to symmetric assessment, the coefficient of renewable energy consumption and technological innovation revealed a negative and statistically significant tie with environmental sustainability, valid for both proxies. Study findings suggest that clean energy integration and technological innovations in the economy decrease environmental adversity by reducing carbon emissions and ecological blames. Although the elasticity of urbanization has documented a positive and statistically significant connection with environmental sustainability, the conclusion is valid for both models. Second, in the long run, the asymmetric shocks of renewable energy consumption and technological innovation have exposed a negative and statistically significant tie to environmental sustainability, whereas in the case of urbanization, the asymmetric shocks unveiled a positive and statistically significant association to environmental sustainability. Third, the study revealed that the feedback hypothesis explains the relationship between technological innovation and environmental sustainability [TI←→EF] in Egypt and ecological footprint and urbanization in Egypt and Ethiopia. Moreover, unidirectional causality runs from ecological footprint to renewable energy consumption in Egypt and Ethiopia.

Exploring symmetric and asymmetric nexus between corruption, political instability, natural resources and economic growth in the context of Pakistan

Pakistan has witnessed political instability since its inception in 1947 till 2008. But after the year 2008, somehow shadows of stability in democratic regimes have been seen. Over time, political instability substantiates the roots of corruption in the country. Which has affected the natural resources extraction and management that has suffered the economic growth of the country to a greater extent. Pakistan is an emerging country with Islamic values where the index of corruption is very volatile and a hard debatable phenomenon along with political instability and abundance of un-extracted natural resources. These factors have slowed down the economic growth of the country with rising debts, trade deficits, and current account deficits. The government needs to adopt a well-established framework to comprehend and better deal with these issues, as these serious issues are noticeable concerns that directly affect the various economic dynamics of the country. Instead of the above-mentioned reasons, we tried to explore the relationship of these variables to understand the magnitude of effect that political instability and corruption carry towards suffered economic growth. We applied linear ARDL and non-linear ARDL using the data from 1996 to 2018. Both methodologies validate the hypothesis in the context of Pakistan. Our study results demonstrated that natural resources intensify GDP in the short as well as long-run, and political instability negatively affect country's GDP. Whereas corruption increases GDP in the short-run while decreases GDP in the long-run. However, asymmetric findings in the long-run display that a rise in corruption reduces GDP, and a decrease in Corruption intensify GDP. The causality relationship also supports the above results and recommend policies to counter rent-seeking and patronage act aiming to provide a more transparent environment in the country, which will resultantly control the noticeable issues of political instability, corruption and abundance of hidden un-extracted natural resources and likely to contribute to the economic growth and prosperity of the country.

Revealing the nexus between tourism development and CO2 emissions in Asia: does asymmetry matter?

Asia is one of the fastest-growing regions in international tourism, economic growth, and CO2 emissions around the globe. However, the relationships between tourism and CO2 emissions are little and unclearly identified. The purpose of the study is to explore the asymmetric nexus between tourism and CO2 emissions in a panel of five high emitters Asian countries covering the period of 1995-2019 by using panel-NARDL-AMG. The empirical results reveal that a positive shock in tourism arrivals increases CO2 emissions, while a negative shock also increases CO2 emissions in the long run. Moreover, a negative shock has a greater effect on CO2 emissions than a positive shock in Asia in the long run. Tourism receipts are expected to maintain the robustness of CO2 emissions in the long run in Asian economies. The authorities should develop and design green international tourism activities in the Asian economies.

Asymmetric nexus between wages and productivity in the context of the global financial crisis

In the context of the breakdown of the wage-productivity nexus since the 2008–09 Global Financial Crisis, this study analyzes that nexus in the UK by accounting for potential asymmetries and nonlinearities. Employing a NARDL framework and data from 2000Q1 to 2018Q4, our key findings suggest that aggregate productivity and productivity within the retail sector have a significant and positive impact on aggregate wages and wages within the retail sector. However, there are important asymmetries and nonlinearities. The impact of productivity on wages in the retail sector is found to be many times smaller than that of aggregate productivity on aggregate wages across the economy as a whole. Economic growth, inflation and unemployment rates are found to have effects on wage growth over the short term. In the long run, it is productivity that is the sole statistically significant influence on wages. Our findings contribute to the debate on the productivity-wage nexus and have profound implications for the labour market and wage policies.

An Asymmetric Nexus: Remittance-Led Human Capital Development in the Top 10 Remittance-Receiving Countries: Are FDI and Gross Capital Formation Critical for a Road to Sustainability?

As a growth input, human capital and remittances have received significant attention and their role on other macro fundamentals has also been investigated. However, the effects of remittances on human capital development are not yet conclusive in the literature. The motivation of the study is to gauge the role of remittances in the process of human capital development in the topb10 remittance recipients for the period spanning from 1980 to 2019. The study has implemented symmetric and asymmetric estimations to explore the effects of remittances, FDI, and gross capital formation on human capital development. The study documented a positive and statistically significant linkage between remittances and human capital development; a similar linkage was revealed for FDI and gross capital formation. Asymmetric assessment detected asymmetric effects running from remittances, FDI, and gross capital formation to human capital development, both in the long-run and the short-run. Moreover, asymmetric shocks in remittances and FDI have exposed positive and statistically significant human capital development. In contrast, gross capital formation revealed a negative and statistically significant connection with human capital development. Referring to a directional causality test, the study documented a feedback hypothesis that holds in explaining the causality between remittances, FDI, and human capital development and unidirectional causality running from gross capital formation and human capital development. In regard to policy formulation, the study suggested that offering additional incentives could induce migrants to send more remittances into the economy, eventually supporting sustainable economic growth. Second, an efficient and effective financial sector can ensure optimal utilization through the channel of capital formation in the economy; therefore, countries must pay attention to the establishment of efficient intermediation.

Symmetric and asymmetric nexus between economic freedom and stock market development in Pakistan

Symmetric and asymmetric nexus between economic freedom and stock market development in Pakistan

Asymmetric effect of financial globalization on carbon emissions in G7 countries: Fresh insight from quantile-on-quantile regression

Being among the highest emitters of greenhouse gases globally, the G7 countries have pledged to halve their carbon emissions by 2030, relative to 2010. This is in clear recognition of the need to transit from carbon energy to more sustainable solutions that are climate-friendly. In view of this, understanding how financial globalization contributes to the realization of those pledges becomes necessary. In this paper, we introduce two major innovations to the literature on financial globalization and environmental degradation. First, in terms of methodology, we apply the quantile-on-quantile regression (QQR) approach with a nonparametric technique over the period 1970Q1–2018Q4. The combination of these techniques has so far received limited attention in the literature. Second, we test for an asymmetric nexus between financial globalization and carbon emission in the G7 economies—Canada, France, Germany, Italy, Japan, the United Kingdom and the United States—as they present an interesting area of research focus. Empirical results from the QQ regression show an emission-increasing effect of financial globalization on environmental degradation in the G7 nations. Furthermore, in order to assess the causal effect of financial globalization on environmental degradation, we apply the nonparametric causality technique. Overall, results from the nonparametric estimations show that financial globalization significantly predicts variation in environmental degradation across quantiles. From a policy standpoint, economic and political frameworks in these nations should be directed towards enhancing higher financial inflows that are in line with the stated economic and environmental policies, among other policy suggestions.

The asymmetric nexus of solar energy and environmental quality: Evidence from Top-10 solar energy-consuming countries

Solar energy is one of the least carbon-intensive techniques of generating electricity in an increasingly carbon-constrained world. Solar energy emits no emissions during power production, and life-cycle assessments indicate that it has a lower carbon footprint than fossil fuels. The study explores the asymmetric relationship between solar energy production and environmental quality in the top-10 solar energy-consumer countries (China, USA, Germany, Japan, Italy, Australia, India, Spain, United Kingdom, and France). A new technique, ‘Quantile-on-Quantile (QQ)’, is used by taking the panel data from 1996 to 2018. Carbon footprint is taken as a proxy for environmental quality. The findings investigate how solar energy quantiles impact quantiles of carbon footprint asymmetrically by offering a suitable framework for understanding the overall dependency pattern. The empirical findings show that, with the exception of India and Spain, solar energy production improves environmental quality by minimizing carbon footprint at various quantiles. Furthermore, the findings indicate that the degree of the asymmetrical link in the solar energy-environmental quality association varies by country, implying that governments must exercise individual attention and precaution when developing policies related to solar energy and environmental quality.

The asymmetric nexus between air pollution and COVID-19: Evidence from a non-linear panel autoregressive distributed lag model

The emergence of a new coronavirus (COVID-19) has become a major global concern that has damaged human health and disturbing environmental quality. Some researchers have identified a positive relationship between air pollution (fine particulate matter PM2.5) and COVID-19. Nonetheless, no inclusive investigation has comprehensively examined this relationship for a tropical climate such as India. This study aims to address this knowledge gap by investigating the nexus between air pollution and COVID-19 in the ten most affected Indian states using daily observations from 9th March to September 20, 2020. The study has used the newly developed Hidden Panel Cointegration test and Nonlinear Panel Autoregressive Distributed Lag (NPARDL) model for asymmetric analysis. Empirical results illustrate an asymmetric relationship between PM2.5 and COVID-19 cases. More precisely, a 1% change in the positive shocks of PM2.5 increases the COVID-19 cases by 0.439%. Besides, the estimates of individual states expose the heterogeneous effects of PM2.5 on COVID-19. The asymmetric causality test of Hatemi-J's (2011) also suggests that the positive shocks on PM2.5 Granger-cause positive shocks on COVID19 cases. Research findings indicate that air pollution is the root cause of this outbreak; thus, the government should recognize this channel and implement robust policy guidelines to control the spread of environmental pollution.

Asymmetric nexus between technological innovation and environmental degradation in Sweden: an aggregated and disaggregated analysis.

The number of studies on the relationship between technological innovation and CO2 emissions has gradually increased in recent years, although there is no clear agreement in the literature. Previous research has revealed both positive and negative consequences of technological innovation on the environment. Moreover, most researchers have used linear approaches to explore this connection, which can result in spurious outcomes when nonlinearities exist in the data. According to this background, this research utilizes asymmetric ARDL and spectral causality approaches to assess the asymmetric connection between technological innovation and CO2 emissions in Sweden utilizing data from 1980 to 2018. In addition, the disaggregated asymmetric effects of technological innovation (patent resident and patent nonresident) on CO2 are also captured in this study. The Nonlinear Autoregressive Distributed lag (NARDL) results showed that positive (negative) shocks in economic growth enhance environmental quality in Sweden. Furthermore, a positive (negative) shock in technological innovation causes a decrease (increase) in CO2. Similarly, a positive (negative) shock in patent nonresident and residents leads to a decrease (increase) in CO2 emissions in Sweden. The outcomes from the spectral causality revealed that in the medium and long term, aggregate and disaggregate technological innovation can predict CO2 emissions in Sweden. This study has significant policy implications for policymakers and the government in Sweden. Based on these findings, the study suggests that the government of Sweden should investment in technological innovation since it plays a vital role in curbing environmental degradation.