Augmented Mean Group Research Articles

Uncovering the potential impacts of financial inclusion and human development on ecological sustainability in the presence of natural resources and government stability: Evidence from G-20 nations

The present research investigates the interconnection among human development, natural resources, financial inclusion, and ecological footprint in the context of G20. From 2000 to 2020, we utilized second-generation panel techniques of method of momentum quantile regression (MMQR) and augmented mean group (AMG). The observed data supports the existence of cross-sectional interdependence, panel co-integration, and stationary characteristics among the variables. Furthermore, the findings obtained from the MMQR analysis demonstrate that both financial inclusion and human development exert a noteworthy mitigating effect on the ecological footprint in the G20 nations. Natural resources are associated with environmental pollution and not aligned with the sustainability agenda. Moreover, the study period witnessed a decrease in the EF due to the enhancement of government effectiveness. Similarly, it is recommended that raising awareness among community members and implementing regulatory measures by governments could yield favorable outcomes. Furthermore, the study emphasizes the constraints and potential avenues for future research.

Revisiting long-run dynamics between financial inclusion and economic growth in developing nations: evidence from CS-ARDL approach

PurposeThis study aims to analyze the long-run dynamic relationship between financial inclusion and economic growth for developing nations.Design/methodology/approachThis study develops a comprehensive financial inclusion index based on the UNDP methodology for 53 developing nations. The authors use second-generation unit root tests, cointegration techniques and an advanced dynamic common correlated effects estimator model called cross-sectional augmented autoregressive distributed lags (CS-ARDL) to examine long-run dynamics among variables.FindingsThe tests confirm the presence of slope-heterogeneity and cross-sectional dependency. The second-generation panel unit root tests show the chosen variables are stationary at first difference. The bootstrap Westerlund cointegration result shows the variables are cointegrated in the long run. The CS-ARDL estimates conclude that financial inclusion positively enhances gross domestic product per capita in selected developing countries. The robustness check through augmented mean group estimation validates the findings.Originality/valueThe study makes three important contributions: first, it constructs a comprehensive financial inclusion index using 10 variables for a panel of 53 developing nations; second, the potential cross-section dependence and slope heterogeneity of panel data have been accounted for by applying the second-generation unit root tests; third, the study uses the dynamic common correlated effects estimator model (CS-ARDL) to examine long-run dynamics among variables.

Financial development and renewable energy deployment in sub-Saharan African countries

Purpose The underdevelopment of the financial sector could be one of the barriers to the deployment of renewable energies in developing countries. The purpose of this paper is therefore to analyse the effect of financial development in the deployment of renewable energies in sub-Saharan African countries. Design/methodology/approach The empirical analysis is based on a production approach and a cross-sectionally augmented autoregressive distributive lag error correction model estimate for 25 sub-Saharan African countries over the period 1990–2018. The augmented mean group (AMG) and common correlated effects mean group (CCEMG) estimators were used for the robustness analysis. Findings Two results emerge: financial development contributes positively to renewable energy deployment in sub-Saharan African countries in the short and long run; and fossil fuel dependence impedes significantly renewable energy deployment in the short and long run. The robustness analyses using the AMG and CCEMG methods confirm these results. Practical implications These results suggest the need for policies to support and strengthen the development of the financial sector to improve its ability to effectively finance investments in renewable energy technologies. Originality The originality of this paper lies in the fact that the analysis is based on a renewable energy production approach. Indeed, the level of renewable energy deployment is measured by the production and not the consumption of renewable energy, unlike other previous work. In addition, this research uses recent econometric estimation techniques that overcome the problems of cross-sectional dependence and slope heterogeneity.

Driving industrial and economic growth in Central and Eastern Europe: The role of electricity infrastructure and renewable energy

Balancing environmental objectives with energy security poses a significant challenge for Central and Eastern European (CEE) economies undergoing substantial energy sector reforms, particularly in the electricity sector. Apart from implementing market principles, improving electricity infrastructure and increasing the use of renewable energy sources (RES) are crucial for fostering industrial and overall economic growth. This study analyzes a panel of 15 Central and Eastern European economies (CEE) from 1995 to 2021. It employs various analytical techniques such as cross-sectional dependency testing, unit root testing, cointegration analysis, and the Augmented Mean Group (AMG) estimator. The results indicate that inefficient electricity infrastructure negatively impacts GDP and industry value-added (IVA) growth rates, regardless of control variables. Conversely, electricity generated from RES positively affects GDP and IVA growth rates in fully developed models. However, increased RES-generated electricity in models without control variables adversely affects IVA growth rates. These findings, coupled with the specific characteristics of CEE economies, lead to policy recommendations for sustainable economic and energy development.

Moving towards sustainable environment development in emerging economies: The role of green finance, green tech‐innovation, natural resource depletion, and forested area in assessing the load capacity factor

AbstractEnvironmental sustainability is increasingly being prioritized by governments around the world, particularly in emerging economies. This study examined the role of green finance and green technological innovation in environmental sustainability using the “load capacity factor”, also takes into account natural resource depletion and forest cover. This study used annual data from 2000 to 2018 for emerging economies: Brazil, China, India, Indonesia, Turkey and Mexico. Methods of analysis included the cross‐section augmented autoregressive distributed lags (CS‐ARDL) model, along with validation by the common correlated mean group (CCEMG) and augmented mean group (AMG). The results show that green finance, green technological innovation and forested areas consistently have a positive impact on environmental sustainability, while resource depletion has a negative impact. The findings of CS‐ARDL are consistent with those of CCEMG and AMG. The study also makes recommendations that emerging economies need to prioritize REDD+ (Reducing Emissions from Deforestation and Forest Degradation) initiatives and implement resource decoupling policies, in addition to green finance and green technology policies, to achieve environmental sustainability.

Drivers of Foreign Direct Investment Inflows to Emerging Asian Economies

This article examines the role of domestic and global factors in driving foreign direct investment (FDI) inflows to Asian emerging economies. Conventional panel estimations do not adequately account for the interdependence among countries caused by common global shocks and spatial effects. This article, employing a novel technique, augments the panel cointegration estimations with a proxy for unobserved common factors extracted from the augmented mean group regression. Our estimations control for nonstationarity, endogeneity, cross-sectional dependence, and heterogeneity. Based on the data of six Asian emerging economies from 2000Q1 to 2019Q4, we find a significant impact of both push (global) and pull (domestic) factors in attracting FDI. Our policy implication suggests the sequential opening of the capital account with capital controls and macroprudential regulations in place. JEL Codes: F21, F30, F41

Inquiring the impact of rural-urban migration, construction sector, and agriculture irrigated land on environmental degradation: insights from urbanized Asian countries.

The present study investigates the influence of rural-urban migration, construction sector share, and agriculture-irrigated land on environmental quality in urbanized Asian nations. For analysis, panel data from seven highly urbanized economies from 1996 to 2020 is utilized. The study employed an augmented mean group (AMG) estimator to find short and long-run results. The empirical discoveries depict that rural-urban migration increases energy demand in urbanized areas and significantly contributes to deteriorating environmental quality. The findings also reveal that the expansion of construction sectors is a significant source of high cement production, which also increases carbon emissions and environmental pollution by increasing the concentration of particulate matter in the atmosphere. The findings also exposed the role of agriculture-irrigated land, contributing to carbon emissions in urbanized Asian economies. The study also investigated the impact of the square term of irrigated agricultural land on environmental deterioration, revealing that adding agricultural land will further intensify environmental degradation by increasing carbon emissions in the atmosphere. A policy framework to reduce environmental damage in Asian economies caused by rural-to-urban migration, the building industry, and irrigated agricultural land was recommended based on the study's findings.

The influence of income, economic policy uncertainty, geopolitical risk, and urbanization on renewable energy investments in G7 countries

Renewable energy infrastructure development is seen as critical to solving environmental issues. Nevertheless, researchers have not adequately paid attention to how the socioeconomic and geopolitical environment affects renewable energy investments (REINV), which are important for promoting clean energy. In line with this gap, this research aims to analyze the role of economic policy uncertainty (EPU) and geopolitical risk (GPR), as well as controlling economic growth (GDP) and urbanization (URB) in G7 countries by considering their leading role in both economic and political areas. To this end, the study applies the augmented mean group (AMG) approach by constructing three different models for the period 2004–2018. The panel data results reveal that (i) GDP has a significantly increasing effect on REINV; (ii) EPU, GPR, and URB have a decreasing effect on REINV; (iii) the effect of EPU is much stronger than that of GPR; (iv) institutional structure, represented by government efficiency and regulatory quality, has no effect on REINV. Based on the results, the study points out that G7 countries need to promote transmission mechanisms that encourage REINV and take steps to minimize the negative effect of EPU and GPR on clean energy investments.

Does obesity Kuznets curve exist in developing economies? Evidence from 38 African countries based on heterogeneous panel data analysis on income-level classification.

The global pandemic disease known as the obesity epidemic has spread throughout the planet. Particularly, Africa is facing a growing problem of obesity, and the trend is rising. This is a result of a ticking time bomb. Given the claim that multiple socio-economic factors significantly affect the diversity in obesity rates between nations, economic development can be seen as a key contributor to this variation. Relying on the aforementioned avowal, this extant research examines the relationship between obesity and economic growth using urbanization, trade openness, and unemployment as intermittent variables within the Obesity Kuznets Curve (OKC) framework. Using panel data from 1990 to 2020, a panel of 38 African countries subdivided into income levels (Low income, Lower-middle income, and Upper-middle income) were analyzed. With the presence of residual cross-sectional reliance and slope heterogeneity, the Augmented Mean Group (AMG) econometric approach is employed. Key outcomes from the mentioned estimation method unveiled that economic growth positively impacts obesity among all the study panels. Variably, unemployment was evidenced to have a palpable positive impact on obesity concerning Low-income economies whereas on the side of the Lower-middle income panel together with Upper-middle income economies and the aggregated panel, a significant negative relationship is observed with obesity. Further, urbanization enhanced obesity in the Low-income panel and the aggregated panel of African nations, whereas an adverse effect is identified in both the Lower-middle and Upper-middle economies in Africa. Moreover, except for Low-income African economies, all the other panels of African nations in terms of income levels were noted to have a significant negative effect on obesity from trade openness. Finally, the long-run coefficients indicated that the OKC is valid among all panels of African countries. The study thus preferably suggests in African economies that addressing the inverted U-shape relationship between obesity and economic growth requires a multifaceted approach that considers the evolving dynamics of both factors. Policy makers should, therefore, aim to balance promoting economic growth and safeguarding public health through targeted interventions and long-term strategies.

Do environmental taxes, environmental innovation, and energy resources matter for environmental sustainability: Evidence of five sustainable economies

This study explores the relationship between environmental taxation, environmental technologies, energy resources, and consumption-based carbon emissions in five leading green economies from 2000 to 2019. The study applied the Cross-Sectional Auto-Regressive Distributed Lag (CS-ARDL) model to derive benchmark results, with Augmented Mean Group (AMG) and Common Correlated Effect Mean Group (CCEMG) techniques being utilized for conducting robustness analyses. The empirical findings suggest that environmental taxation, environmental innovations, and the consumption of renewable energy are associated with a reduction in consumption-based carbon emissions, thereby contributing to enhanced environmental sustainability. Conversely, the utilization of non-renewable energy is linked to an increase in consumption-based carbon emissions. These results align with the objectives outlined in the Sustainable Development Goals' 2030 agenda, particularly SDG 7 (Affordable and Clean Energy), SDG 9 (Industry, Innovation, and Infrastructure), and SDG 13 (Climate Action), offering valuable policy implications.

탈세계화가 아태지역 국가의 경제성장에 미치는 영향에 관한 연구

Purpose - The WTO and World Bank have pointed out the phenomenon of deglobalization. Despite this, Asian countries are pursuing closer cooperation with other countries in the region and around the world. Accordingly, this study analyzes the impact of deglobalization on the economic growth of Asia-Pacific countries through non-linear relationships. We use 33 Asia-Pacific nation’s panel data from 1990, when globalization rapidly increased, to 2020, when deglobalization saw progress.
 Design/Methodology/Approach - We analyze the spatial panel regression model using the AMG (Augmented Mean-Group) estimation method, which controls for cross-sectional dependence between countries in panel data and country-specific slope coefficient heterogeneity in the panel model.
 Findings - As a result of the estimation, there is an inverted U-shaped relationship between deglobalization and Asia-Pacific economic growth. As deglobalization occurs up to 50.11%, economic growth increases, but as deglobalization continues past 50.11%, economic growth decreases.
 Research Implications - Countries with less deglobalization must increase economic growth through policies that protect their own industries, and countries whose level of deglobalization exceeds the threshold must open international relations and pursue economic growth through mutual cooperation and economic integration. In the long term, deglobalization threatens Asia's integrated development and sustainable growth, so globalization, free trade, and multilateralism must be maintained.

YÜKSELEN PİYASA EKONOMİLERİNDE DOĞRUDAN YABANCI YATIRIMLAR, TİCARİ AÇIKLIK VE CO2 İLİŞKİSİ

In this study, it was aimed to investigate the effect of foreign direct investment (FDI) and trade openness (TO) on environmental pollution. The study was conducted on Emerging Market Economies (EMEs), which are subject to flexible practices and conditions to attract trade and investment. The 1990-2020 data of 15 countries included in the IMF's EMEs category were tested with the following methods: The cross-sectional autoregressive distributed lag estimator (CS ARDL), Main Group (MG), Common Correlated Effects Mean Group Estimators (CCE), Augmented Mean Group (AMG), Emirmahmutoğlu and Köse (2011) Causality Test. The variables used were FDI, TO, GDP per capita and carbon dioxide (CO2) emissions. According to the results of the coefficient estimators, it was found that only GDP had a significant and positive effect on CO2 in both the short and long term, and there was no significant relationship between FDI-CO2 and TO-CO2. According to the causality test results, it was determined that there is a unidirectional relationship from CO2 to FDI and from TO to CO2, and a bidirectional relationship between GDP and CO2.

Harnessing the roles of renewable energy, high tech industries, and financial globalization for environmental sustainability: Evidence from newly industrialized economies

AbstractScholars and policy makers are paying close attention to reduce climate problems for sustainable growth. The failure to enhance ecological integrity could increase greenhouse gas emissions. Therefore, this study examines the effect of economic complexity, high‐tech industries, renewables, natural resource abundance, and financial globalization on CO2 and ecological footprint for 10 selected newly industrializing countries for the period 1990 to 2018. We use Common Correlated Error Mean Group, Augmented Mean Group, panel causality, and Westerlund Error Correction Model of cointegration techniques that account for short‐run, and long‐run relationships across cross‐sectionally dependent and heterogeneous countries. The findings reveal long‐run interrelationships across the series of underlying observations. The long‐run empirical results show the development of high‐tech industries has statistically significant environmental welfare‐enhancing impact, whereas renewables and natural resource exploitation mitigate environmental challenges. However, economic complexity and financial globalization increase emissions and ecological footprint (ECF). The results confirm unidirectional causality from renewable energy to CO2 and ECF and further from natural resources to CO2 and ECF. Additionally, there exists bidirectional causality between financial globalization and ECF. Based on these findings, we suggest that these countries should revise their energy policies in order to allocate more funds for the renewable energy technologies so that environmental problems can be mitigated. Along with renewable energy, further investments should be made in high‐tech sector but economic complexity and financial globalization should be carefully handled.

Modeling the impacts of technological innovation and financial development on environmental sustainability: New evidence from the world's top 14 financially developed countries

Developing a sustainable economic system in the wake of unprecedented environmental challenges is the major cry of the day. This study aims to investigate the impacts of financial development, technological innovation, globalization, trade openness, and renewable energy consumption on the ecological footprint of 14 countries with the highest levels of financial development. The utilized econometrics battery include slope homogeneity tests, Westerlund cointegration, panel Augmented Mean Group (AMG), and Dumitrescu-Hurlin (2012) causality approaches. The study period spans from 1990 to 2018. The empirical outcomes indicate that financial development negatively affects environmental sustainability. The results further reveal that globalization technological innovation, trade openness, and renewable energy consumption bolster environmental quality. Based on the causality outcomes, a bidirectional causal link is witnessed between technological innovation, globalization, renewable energy consumption, and ecological footprint; however, a unidirectional causality relationship exists from trade openness and financial development to ecological footprint. The study findings underscore the importance of globalization, technological innovation, trade openness, and renewable energy consumption in fine-tuning environmental policies and improving environmental quality in these countries.

How do carbon emissions and eco taxation affect the equity market performance: an empirical evidence from 28 OECD economies.

This study examines the nexus between "stock returns," carbon emissions, and "environmental tax" in 28 OECD countries for the period 1994 to 2014. To this end, we employ second-generation econometric techniques that are robust to macroeconomic and financial datasets to eliminate the issues associated with heterogeneity and cross-sectional dependence. The "common correlated effects mean group (CCEMG)" and "augmented mean group (AMG)" estimators are a pioneering attempt to explore the association between the cross sections. These approaches take into account the complexities of real-world data and provide a more accurate understanding of the relationship between the variables. Several studies explored the relationship between CO2 emissions and economic growth. However, the literature lacks studies examining the impact of "environmental tax" implementation on "stock returns," which is a central policy instrument to curb emissions. The results demonstrate a significant and negative relationship between CO2 emissions and "stock market index returns" and a positive and significant relationship between "environmental tax" and "stock market index returns." Furthermore, both these relationships prevail in the world's biggest financial markets and second largest CO2 emitters, the USA. The empirical findings offer various useful implications for investors, policymakers, brokers, corporations, governmental pollution abatement institutions, and other stakeholders who wish to obtain a carbon risk premium.

Evaluating innovative factors of the global innovation index: A panel data approach

This study examines the connection between innovation inputs, outputs, and efficiency. Additionally, to establish the connections between the global innovation mechanisms. Furthermore, a closer look at how factors are distinguished and found to be significant based on a country's level of income. To develop the technique in this quantitative research, we utilized panel data from 105 countries and gathered data from the GII, WIPO, and WDI. In light of this, panel-corrected standard errors with robust regression and panel quantile regression techniques were used to obtain the long-run estimations. There were also two methods used to compare the results: two-stage least squares for robustness endogeneity and augmented mean group for cross-section dependency. This research demonstrates that the method is reliable and suggests that countries are open to expansion in innovation inputs, outputs, and efficiency. It also suggests that countries should record problems associated with how well innovations are implemented. In addition, a proper evaluation must be carried out, which includes the development of innovation strategies that consider the varying economic situations of the countries included in this research. Performance in innovation is essential for global success, and this paper investigates the relationship between GII, input, output, and efficiency with creative performance.

Global value chains participation and trade-embodied net carbon exports in group of seven and emerging seven countries

A vast literature has examined the empirical link between gross exports and total carbon emissions for different country groups. However, countries’ increasing participation in global value chains (GVCs) challenges this traditional approach since the gross measures neglect trade-embodied carbon emissions and intermediates-driven value-added trade. Therefore, this study scrutinizes how backward participation (foreign contents in domestic exports) and forward participation (domestic contents in foreign exports) in GVCs affect per capita net exports of trade-embodied carbon dioxide emissions. The study adopts input-output accounting and value-added decomposition framework for Group of Seven (G7) and Emerging Seven (E7) countries over the 1995–2018 period. (i) Pre-estimation analyses reveal that the net carbon importer G7 group had a comparative advantage in high-tech exports and a lower export product concentration level, while the net carbon exporter E7 group had a comparative advantage in resource-intensive exports and a higher export product concentration level, albeit significant within-group heterogeneities. (ii) The augmented mean group estimates reveal that increasing backward participation raises net carbon exports for both G7 and E7. The forward participation-net carbon exports nexus is negative for G7 but positive for E7. (iii) While economic growth reduces net carbon exports in both groups, the effects of comparative advantages in resource-intensive and high-tech exports differ. Practitioners should be aware of the GVCs-driven carbon circle when assessing decarbonization performances and obligations of countries.

Foreign Direct Investment, Technological Innovations, Energy Use, Economic Growth, and Environmental Sustainability Nexus: New Perspectives in BRICS Economies

In the current era, economic growth is inevitable for global prosperity but achieving sustainable economic development is one of the significant challenges for the developing world. The present study explores the impacts of foreign direct investment, energy use, and technological innovations on the economic growth and environmental quality of BRICS countries for the period 1990–2018. We used the augmented mean group (AMG), the common correlated effects mean group estimator (CCEMG), and several other modern-day empirical techniques to analyze data. The findings show that foreign direct investment increases economic growth but harms the environmental sustainability of BRICS countries. Moreover, we have seen that energy use is directly proportional to economic growth and CO2 emissions. This confirms that energy use is one of the factors which harms the environmental quality in BRICS economies. Likewise, economic growth increases CO2 emissions. On the other hand, technology innovation has a direct relationship with economic growth but an inverse relationship with CO2 emissions as it improves the environmental sustainability of the BRICS region. This research adds to the existing literature by exploring the interplay between FDI, innovation, energy use, economic growth, and environmental outcomes in the context of major emerging economies. The study’s findings provide empirical evidence on the role of these factors in shaping the environmental outcomes in the BRICS economies, and they have implications for policymakers and stakeholders in addressing environmental challenges such as global warming and climate change.

The Dynamic effects of Foreign Direct Investment Services and Energy Consumption on Information and Communication Technology Sector

This study scrutinises the influence of foreign direct investment (FDI) inflows, energy consumption on Information and Communication services (ICTs) in selected economies of South Asia. This research is based on heterogenous and second generation framework of panel data-set from 1999 to 2021. This study used augmented mean group (AMG), mean group (MG), and common correlated effects mean group (CCEMG) assessors, which further promotes the substantial and favourable influence of FDI services, and energy consumption on ICTs. However, the impact of terrorism is insignificant on ICTs in the region of South Asia. The results indicate that economies of these region must embrace investment reform measures in order to draw FDI into the services sector, increase exports of services, and progress towards economic stability.

The future of green transportation: evaluating the impact of innovation in hybrid electric vehicles relating technologies on carbon dioxide emissions in Asia's top knowledge-based economies.

The significant contribution of the transportation sector to carbon dioxide emissions (CO2e) has become a developing concern for legislators and environmental experts. Innovation in hybrid electric vehicle-related technologies (IHVRTs) has been identified as a possible strategy for reducing CO2e in the transportation industry. Even though IHVRTs have the potential to reduce CO2e, there are insufficient studies on their impact in the top three Asian knowledge-based economies (Japan, South Korea, and Japan). This study attempts to address this gap in the literature by investigating the association between innovation in IHVRTs and CO2e in the top three Asian knowledge-based economies, with independent variables gross domestic product per capita (GDPPC), economic complexity (ECC), renewable energy consumption (RNEC), and financial development (FD). The model's coefficients are estimated using the augmented mean group, which considers cross-country dependencies and country-specific effects. The empirical findings indicate that IHVRTs have a substantial negative effect on CO2e. In addition, FD has a favorable relationship with CO2e, whereas ECC has a negative relationship with CO2e. The results also demonstrated that RNEC reduces CO2e, whereas the GDPPC reduces CO2e. The policy implications of the results imply an urgent need for additional investment in IHVRTs and a transition towards more environmentally conscious and less ecologically damaging economic activity.