Autoregressive Distributed Lag Technique Research Articles

Linkage of Non-Fungible (NFT) Tokens to Measures of Uncertainty: Does Fear Bode Well for NFT Holders?

The study investigates the relationship between the returns of Non-Fungible Tokens (NFT) and its categories; and fear indices during times of crisis. The fear indices considered are Global Fear Index (GFI), Global Economic Policy Uncertainty Index (GEPU), Twitter based Economic Uncertainty Index (TEU), Global Consumer Confidence Index (CCI), Infectious Diseases Equity Market Volatility Index (IDEMV) and Crypto Volatility Index (CVI). Employing Granger Causality Test, Autoregressive Distributed Lag technique and ARDL Bounds test on data for the period starting 1st February 2020 and ending 28th February 2022, it is found that short run association exists between TEU, CVI and NFT returns. Further, GFI leads NFT Art returns while TEU leads NFT Metaverse returns by lag 5 and lag 2 respectively. No association between fear metrics and NFT Collectible, NFT Game and NFT utility is observed. No long run association in found between NFT returns and fear indices except TEU which influences NFT returns. It is concluded that NFT, NFT Art and NFT Metaverse returns have positive association to at least one fear index during times of turmoil, especially for the short run.

Investigating the asymmetric impact of renewable energy consumption and trade openness for carbon emission abatement using N-ARDL approach: a case of India

PurposeThis study investigates the asymmetric influence of renewable energy consumption (REC) and trade openness (TO) in the pathway of decarbonizing of Indian economy.Design/methodology/approachBy exploiting fifty years of annual time series data spanning from 1970 to 2019 with the augmentation of nonlinear autoregressive distributed lag technique with the consideration of GDP and industry value added (IVA) as control variables.FindingsOur This research not only demonstrates the asymmetric association among the employed variables but also shows that negative shock to REC stimulates emissions, where as positive shock on the same policy variable promotes environmental quality improvement. Negative shock to TO is found to be associated with the corresponding increase of environmental quality, but the positive shock on the same intensifies environmental pollution. IVA is also found to be associated with intensifying environmental squalor. In addition, the research provides the empirical evidence of existence of “EKC” hypothesis in India as long-run coefficient associated with GDP looks smaller than short-run coefficient of GDP.Research limitations/implicationsIt was difficult to include may other causal variables due to nonavailability of data pertaining to those variables.Practical implicationsMoreover, some policy guidelines have also been recommended for India at the end that may aid India to achieve net zero emissions by 2070.Originality/valueThis is an original research paper carried out by the authors and has not yet been submitted elsewhere.

Exploring the Synergistic Effects of Digitalization and Economic Uncertainty on Environmental Sustainability: An Investigation from China

This study delves into the intricate interplay between digitization, economic uncertainty, and environmental sustainability, aiming to shed light on their multifaceted roles. Using an approach, the analysis spans 28 Chinese provinces over the period from 2000 to 2020, employing linear and nonlinear autoregressive distributed lag techniques to unveil symmetric and asymmetric impacts. The findings reveal the urgent need to address the challenges posed by economic uncertainty for effective environmental sustainability. Notably, a negative association between digitization and carbon dioxide emissions is identified, emphasizing its transformative potential in driving energy efficiency and sustainable practices. Furthermore, the study elucidates the detrimental influence of industrial structure on carbon dioxide emissions, highlighting the importance of balancing economic growth and environmental sustainability. The positive influence of urbanization on carbon dioxide emissions underscores the complexities of achieving sustainable development amidst rapid urbanization. By providing a comprehensive understanding of these dimensions, this study contributes to the scholarly discourse and aids in formulating evidence-based strategies for a greener and more sustainable future. The insights gained from this research can guide policymakers and stakeholders in navigating the complex dynamics between digitization, economic uncertainty, and environmental sustainability, fostering a more sustainable and resilient world.

Does financialization enhance renewable energy development in Sub-Saharan African countries?

This study examines the influence of financial development, fiscal policy, and foreign capital on renewable energy development in 21 Sub-Saharan African nations from 2000 to 2021. The aim is to address the dearth of information on how the financial sector affects renewable energy. Using panel data and the Panel Quantile Autoregressive Distributed Lag (PQARDL) technique, we analyze the short- and long-term impacts of these factors while considering industrialization and institution quality. Our findings indicate that financial development and fiscal policy pose significant obstacles to renewable energy development across all quantile distributions in the long run. However, foreign capital positively contributes to renewable energy development across most quantiles, except the 70th quantile. We also observe a declining trend in Sub-Saharan Africa's share of renewable development due to industrialization and institutional quality in the long term. Furthermore, the interactive roles of fiscal policy and institutional quality hinder renewable advancement in the region over time. These empirical outcomes provide valuable insights on how to attract foreign capital and allocate investments in renewable development. By doing so, we can offer consumers cost-competitive choices and strive towards extending high-value-added facilities within a sustainable environment.

The asymmetric impact of fossil fuel and renewable energy consumption on life expectancy in Nigeria

AbstractThe life expectancy rate is an essential yardstick for measuring people's well–being. The healthier the population, the better the economic rate of productivity. Not many studies have investigated the asymmetric link between energy use and life expectancy. Thus, this paper addresses the gap by evaluating the impact of fossil fuel (FFEC) and renewable energy consumption (RNEW) on life expectancy (LEXP) in Nigeria from 1965–2019 using the Autoregressive Distributed Lag (ARDL) and Non‐linear ARDL methods. The bounds test to cointegration confirmed the presence of long‐run association. According to the findings of the ARDL technique, FFEC and RNEW improve LEXP in the long and short‐run. In addition, the NARDL result confirms that a positive shock in FFEC and RNEW improves LEXP in the long and short‐run. This study suggests that cleaner technologies should be applied to fossil fuel sources, while the importance and use of RNEW sources should be continually promoted.

The role of natural resources and eco-financing in producing renewable energy and carbon neutrality: Evidence from ten Asian countries

The present generation is already facing challenging situation due to global warming effects. These effects prior to pre-industrial era are more visible and severe, hence, causing ecological destruction. Economies, in this context, are exerting maximum efforts to ensure sustainable environment, especially by the year 2050. Amongst the efforts, factors such as eco-financing and renewable energy production are the effective solutions to achieve carbon neutrality goal. Thereby, the present research examines the impact of natural resources and eco-financing on producing RE and attaining carbon neutrality in ten Asian countries. With the help of cross-sectionally augmented autoregressive distributed lag (CS-ARDL) technique, results indicate that natural resources, eco-financing, economic growth, industrialization, increase renewable energy production and helps in achieving COP26 resolution; carbon neutrality goal. Asian economies having this empirical baseline, are advised to unlock the potential of eco-financing in order to achieve carbon neutrality goal.

Green financial investment and its influence on economic and environmental sustainability: does privatization matter?

Green financial investment and privatization have been widely used as policy tools to promote economic growth and efficiency in many countries. However, their effects on environmental sustainability have been less explored. This study utilizes autoregressive distributed lag (ARDL) and quantile autoregressive distributed lag (QARDL) techniques to explore the effects of green financial investment and privatization on economic and environmental performance in China. Using data from 1995 to 2021, we analyze the impact of green financial investment and privatization on economic performance, measured by GDP per capita, and environmental performance, measured by CO2 emissions based on green finance and privatization theories. Our findings reveal that green financial investment has a beneficial effect on both economic and environmental performance. On the other hand, privatization has a positive impact on long-term economic performance, while also having negative consequences on environmental performance. These findings can inform evidence-based policies and strategies that promote both economic and environmental performance.

Macroeconomics as the Basis of Commercial Banks Stability in Nepal

Background: Maintaining financial stability is vital for all financial institutions, as it fosters public trust and confidence in the entire system contributing to a healthy and well-operating economy in a country. Therefore, banks and other financial institutions must uphold their financial soundness and stability, given their crucial economic role. Objective: The study examines the influence of macroeconomic factors such as Inflation (INF), Gross Domestic Product (GDP) growth, Inflation Rate (INF), the Exchange rate (ER), Money Supply (M2), and NEPSE Index on bank stability of commercial banks in Nepal. Method: The study obtained data from the Nepal Rastra Bank, which published a quarterly economic bulletin and database on the Nepalese economy from 2001 to 2022, and applied the Autoregressive Distributed Lag (ARDL) technique for evaluation and interpretation. Result: The findings from this study indicate that the interest rate and money supply (M2) have a positive and significant impact on bank stability. Similarly, the NEPSE index has a positive but insignificant impact on bank stability. However, bank stability is negatively and statistically significantly impacted by both the exchange and inflation rates. Conclusion: The primary findings of the research indicate the presence of a sustained and stable association between bank stability and macroeconomic variables. The ARDL techniques analysis demonstrates that GDP growth, inflation, effective exchange rate, and NEPSE index are statistically significant factors, implying that they have a robust capacity to clarify the evolution of bank stability in Nepal. Implications: Therefore, the study suggests that policymakers and regulators need to pay close attention to macroeconomic indicators such as inflation, interest rates, money supply (M2), and exchange rates to ensure the stability and soundness of the banking system. The research also highlights the need for commercial banks to closely monitor macroeconomic developments and adjust their strategies accordingly to mitigate risks and maintain stability.

The influence of intellectual capital on organizational performance

Intellectual capital is by far the most important factor in enhancing organizational performance. Companies require skilled workers who have the know-how, skills, experience, as well as the ability to bring new ideas for the success of the business. The contemporary economy is a knowledge-based economy, which means that information, knowledge, and other intangible assets are considered to be more valuable than physical commodities. The present research is aimed at investigating the connection between intellectual capital and organizational performance among the business sectors of Turkiye. The current research uses the current dataset of the business sectors of Turkey from 2009 to 2021. The Autoregressive Distributive Lag technique, which provides robust results on short-time period dataset, is employed to investigate this association. The present research differs from past studies in that it uses secondary data in analyzing the effect of human capital component of IC on firm performance, hence the originality of this research. Past research has widely examined the association of intellectual capital (IC) and firm performance with primary data. The major results of the present research show the importance of debt and equity finance in raising organizational performance. The results also show that long-term liability and intellectual capital reduce firm profitability. The present research gives crucial policy recommendations that are vital for policy making.

Assessment of green economic development through the impacts of fossil fuels resources and education in China

This paper evaluates the association between education, fossil fuel resources, and green development in China from 1980 to 2021. The findings from the ARDL (Autoregressive Distributed Lag) technique confirmed that the education index has a positive effect on sustainable development. Sustainable electricity generation in China positively affects sustainable development, while using fossil fuels in the industry has an adverse effect on China's sustainable development. The inflow of foreign direct investment harms the sustainable development index, whereas the effectiveness of the green financing market in promoting sustainable development goals exists only in the long term. The Chinese policymakers should pay attention to the digital green financing market, green cryptocurrencies, green FDI regulations, and further cooperation with the United Nations in the education for sustainable development (ESD).

Determinants of trade of mineral resources between China and ASEAN

This research evaluates the mineral resources trade pattern between China and ten ASEAN members using the Autoregressive Distributed Lag technique and annual data from 2000 to 2021. The findings confirmed that the sustainable development index harms the trade of mineral resources between China and ASEAN countries. Regarding the export of mineral resources from China to ASEAN countries, the openness of the financial markets has no significant effect. Besides, the poverty variable significantly impacts only in the short term. However, regarding China's import of mineral resources from ASEAN countries, the indicators of poverty and the openness of China's financial markets are effective in the short- and long-term. The suggested practical policies by this research are developing poverty alleviation policies, expanding regional financial markets, and multilateral trade agreements in technology transfer and green utilities.

Role of Energy Consumption on the Environmental Impact of Sectoral Growth in Malaysia

Although some studies have posited that sectoral growth could influence environmental pollution through energy consumption, the issue has not been explicitly and empirically investigated in the carbon-neutrality literature. Hence, this analysis fills the gap in the extant literature by employing the interaction models to ascertain the moderating role of energy consumption on the environmental impacts of the industrial, agricultural, financial, and service sectors in Malaysia. It also analyzes the marginal effects of sectoral growth on environmental pollution (i.e., ecological footprint and carbon emissions) at various levels of energy consumption. The Autoregressive Distributed lag technique utilized in this study found that the variables are cointegrated. The empirical estimations reveal that energy consumption plays a harmful moderating role on the impacts of the industrial and financial sectors on environmental pollution but does not aggravate the environmental impacts of the agricultural and service sectors. Besides, the marginal effects of the industrial and financial sectors on environmental pollution increase as the level of energy consumption rises in Malaysia. Based on the findings, this study highlights the policy implications and options. JEL Classification: Q53, O13, O14

Monetary Policy and Commercial Banks’ Credit to Agricultural Sector: A Study of Nigeria

This study examines the relationship between monetary policy and commercial banks credit to agricultural sector in Nigeria with uses of secondary data for the period 1981 to 2021 by applying Autoregressive Distributed Lag technique. Result from this study shown that, liquidity ratio, monetary policy rate, loan to deposit ratio and cash reserve ratio have no significant influence on commercial banks credit to agricultural sector in Nigeria. On the other hand the treasury bill ratios has significant positive effect on commercial banks credit allocated to agricultural sector in Nigeria. The study therefore recommends that Central Bank of Nigeria should cuts down the cash reserve ratio to encourage the loanable funds available with the banks. Regulatory authority should put in place suitable policy that will prevailing cash hoarding in the economy to achieve desired liquidity ratio level. CBN should use the loan to deposit to center for regulating and moderating commercial banks for a positive significant impact to sectors in Nigeria. Authorities should use monetary policy rate to expand the volume of commercial banks’ ability to grant credits. Finally, monetary policy authority should ensure that holding of treasury bills by commercial banks should be reduced to enhance the ability to grant loans and advances to the public for productive purposes. .

The evolution of renewable energy and its impact on employment in China: assessing the role of education.

Renewable energy has an established role in improving environmental quality and economic growth. However, the nexus between renewable energy, education, and employment have yet to be disclosed in detail. Therefore, our primary focus in this analysis is to investigate the impact of renewable energy investment and education on the employment level in China. The empirical analysis is based on the novel quantile autoregressive distributed lag (QARDL) technique that can measure the estimates across quantiles. From the estimates of the QARDL model, we confer that renewable energy investment and education significantly and positively impact the employment level in China in the long run. In short-run, renewable energy investment does not have any noticeable impact on the employment level, while the rise in the education level help increases the employment rate in China. Moreover, the long-term positive impact of economic growth and information and communications technology (ICT) is more pronounced.

A time series analysis of government expenditure and health outcomes in Nigeria.

Despite a significant share of Nigeria's budget in the health sector, the health status has not improved, as reflected by poor health indicators. This study investigates the linkages between government expenditure and health outcomes in Nigeria. The Autoregressive Distributed Lag technique was used to examine the short- and long-run effects of government health expenditure on health outcomes separately. The health outcome was captured by life expectancy at birth and mortality rate. Findings show a negative relationship exists between health expenditure and mortality rate, implying that a rise in health expenditure leads to a decrease in mortality rate, while life expectancy at birth positively responds to the changes in health expenditure. As a policy recommendation from this study, the government should pursue increasing health expenditure and partner with the private sector in the form of Public-Private Partnerships to improve the health sector and outcomes.

How human capital and energy prices play their role to enhance renewable energy: defining the role of innovations and trade openness in G-11 countries.

It is crucial to switch from nonrenewable energy to renewable energy sources to improve environmental quality. For this reason, innovations play a crucial part, yet the use of renewable energy is insufficient. This work contributes to the literature by Using both aggregate and disaggregated data, this study investigates the relationship between energy consumption, trade openness, human capital (HCA), and innovations in G11 nations. This study analyzed yearly data from 1990 to 2020 using empirical methods of augmented mean group (AMG) and cross-sectional autoregressive distributed lag (CS-ARDL) techniques. The findings highlight the significance of human capital, energy pricing, and innovations in fostering the growth of renewable energy in G-11 nations. A 1% increase in GDP and trade openness will enhance total energy consumption by 0.47% and 0.07%. GDP and trade are also increasing non and renewable energy consumption. A 1% increase in human capital and eco-innovations are increasing renewable energy by reducing non-renewable energy consumption. In addition, the G-11's rising commerce and GDP have increased their reliance on energy sources that rely on fossil fuels. The authors of this study suggest raising HCA as a means of encouraging the G-11 to use cleaner forms of energy. The need to bolster renewable energy to achieve a cleaner environment in the G-11 countries.

Exchange Rate and Inflation Rate Nexus: The Nigerian Experience

This study examined the Exchange rate and inflation in Nigeria using annual time series data covering the period 1981-2021. To achieve this objective, the study adopted an ex-post facto research design, used secondary data obtained from the CBN Statistical Bulletin, and specifically employs the Autoregressive Distributive Lag (ARDL) technique to analyze the time series data from the period January 1981 to December 2021 to investigate the relationship between Real Gross Domestic Product, inflation expectation, Money Supply, Fiscal Deficit, Inflation Rate, and Exchange Rate. The study used the Augmented Dickey-Fuller test to determine the presence of a unit root, the Breusch-Godfrey Serial Correlation LM test to know the presence of serial correlation, and ARDL bound test for the co-integration test to establish the relationship among the variables in the study. The results of the stationarity test indicated that the variables have mixed order of integration while the result for co-integration shows that there is a long-run relationship between the variables. Findings showed that Real Gross Domestic Product (RGDP) and exchange rate (EXR) had a positive and significant impact on inflation, meaning that inflation in Nigeria is caused by exchange rate fluctuations as well as an increase in RGDP. From the Granger Causality test, it was found that Fiscal Deficit, Money Supply, and Real GDP granger cause inflation in Nigeria. Meanwhile, in terms of the ability of inflation to predict the explanatory variables, it was revealed that the exchange rate does not Granger cause the inflation rate. The test of the hypothesis shows that the Exchange rate has a significant impact on inflation in the short run. Based on the findings, the study recommended that the growth of the money supply should be controlled by the central bank to reduce inflation to the barest minimum. Keywords: Exchange rate, Inflation rate, Bound test, Money Supply DOI: 10.7176/JESD/14-10-02 Publication date: May 31 st 2023

Do illiteracy and unemployment affect financial inclusion in the rural areas of developing countries?

The aim of this study is to examine the effects of illiteracy and unemployment on financial inclusion in rural areas of Nigeria between 2017 and 2022. Most rural areas in developing countries have high illiteracy and unemployment rates, creating challenges for researchers to measure the inclusiveness of financial services and products. This study examined the effect of illiteracy and unemployment on the inclusiveness of financial services and products in rural areas of Nigeria. The ex-post facto research design, systematic sampling, dummy for latent variables (erratic power supply and insecurity in rural areas), and autoregressive distributed lag (ARDL) techniques were employed. The result showed that the coefficient estimate for the illiteracy rate is negative (-0.5318), indicating that higher illiteracy is associated with lower financial inclusiveness, and the coefficient estimate for unemployment rate is also negative (-2.1977) and statistically significant, suggesting that the higher unemployment rate is associated with financial inclusiveness. These findings indicate that a decline in the delivery of financial services in developing nations attest to illiteracy and unemployment. This study concluded that there is a need to improve education and employment rates in rural areas of developing countries to achieve optimal inclusiveness of financial services and products.

The Impact of Institutional Quality on Sectoral Foreign Direct Investment in Pakistan: A Dynamic Simulated ARDL Approach

Capital is needed to accelerate the development process, but developing nations struggle with minimum resources. Since foreign direct investment (FDI) is essential to solve the funding shortage, developing nations make every effort to attract FDI to their countries. This study was conducted to explore the impact of institutional quality on sectoral FDI in Pakistan using time series data for the period from 1986 to 2019. To create a solid foundation for policy formulation, this study developed a single measure of institutional quality by utilizing a wide range of institutional indicators. It evaluates the impact of overall institution quality on sector-level FDI and examines the causal relationship between institutions and sectoral FDI with a clear focus on a single-country analysis. The dynamic simulated autoregressive distributed lag technique was employed to explore the impact of institutional quality and other factors on FDI. The results of the study explained that institutional quality and TO have a positive and significant effect on the FDI of the primary FDI sector at 5%, while in the case of the secondary sector, the effect of institutional quality, HDI and GDP on FDI inflow is significant at 10% and TO has a significant effect on secondary sector FDI at 5%. In addition, institutional quality and GDP have a positive relationship with tertiary sector FDI at 5%. The empirical findings show that higher institutional quality in emerging economies such as Pakistan encourages large transfers of technological advances through FDI, increasing the overall performance of the economy. This study found that institutional quality significantly increases sectoral FDI in Pakistan. Finally, this study prescribes some policy measures to increase FDI based on the findings.

The role of natural resources in financial expansion: evidence from Central Asia

Central Asian States (CAS) have diverse natural resources. This research aims to shed light on the finance–natural resource’s association in the context of CAS namely Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan in 1996–2020 using the cross-sectionally augmented autoregressive distributed lag technique. It seeks to examine the research question, “What is the effect of natural resource wealth on the financial expansion (FE) of Central Asia?” The results demonstrated an inverted U-shaped association between financial growth and natural resource rents. It implies that natural resources are initially a “resource blessing” that later becomes a “resource curse.” Additionally, the effect of institutional quality (INQ) and human development (HD) on financial growth is examined. The results reveal that INQ and HD positively affect FE. Moreover, a bidirectional causal relationship exists between FE and INQ. Finally, all variables contribute to a long term FE. Based on these outcomes, the major policy recommendations are that the CAS authorities diversify their financial services and products and direct the proceeds from natural resource rents to effective investments particularly in HD. In addition, the social and political infrastructures in CAS must be restructured to achieve a high-quality institutional environment, which is necessary to increase the role of the private sector.