Autoregressive Distributed Lag Technique Research Articles

Financial Inclusion, Economic Growth and Macroeconomic Stability in Nigeria

In the face of the present economic realities, the study investigated the impact of financial inclusion on economic growth and macroeconomic stability over the period of 40 years (1980 - 2020), with focus on basic macroeconomic indicators (poverty, output growth, price stability and unemployment). Using secondary data from Central Bank of Nigeria (CBN) Statistical Bulletin (various years) and World Development Indicators (WDI - 2020), the study employed suitable cointegration technique viz: Autoregressive Distributed Lag (ARDL) technique. It was found that first,financial inclusion can reduce poverty in the long-run, if the inclusiveness is robust, progressive and sustained, second, the interaction between financial inclusion and output growth was inverse, and that outcome was found to be associated with some encumbrances within the financial system and the economy, third, financial inclusion can stabilize price level in the longrun if the process of inclusiveness is deepened and sustained, and fourth, unemployment can be greatly reduced vis-à-vis financial inclusion, especially if the inclusiveness is deepened and sustained. It was recommended, amongst other things, that a robust financial system should be developed, so as to deepen financial inclusion (like expanding credit and money supply, amongst other things) in a way that can encourage economic growth and stabilize the economy, ceteris paribus.

Impact of Climate Change on Agriculture: Evidence from Major Crop Production in India

The study examines the impact of climatic changes on the production of the major crops grown in India. The study estimates the panel data from 1970 to 2020 by using the Panel Autoregressive Distributed Lag technique. The results of the study show that in the long run, maximum temperature has a negative impact on crop production, whereas carbon dioxide emissions have a positive impact on crop production. In the short run, maximum temperature and average precipitation positively affect crop production, whereas minimum temperature negatively affects the production of crops. Besides climatic variables, the study also incorporates non-climatic variable such as the area under crop. The results revealed that the area under crop has a positive significant effect on crop production both in the short run and long run. JEL Codes: C50, Q1, Q15, Q54

Examining the Impact of External Debt, Natural Resources, Foreign Direct Investment, and Economic Growth on Ecological Sustainability in Brazil

Although some recent papers have explored the impacts of external debt on environmental sustainability, the impacts of external debt on the load capacity factor (LCF) have been ignored. In this regard, this work aims to examine the influence of renewable energy, FDI, and external debt on the LCF in Brazil over the period 1970–2021; this indicator implies the country’s strength to promote the population based on current lifestyles. This paper uses the novel augmented autoregressive distributive lag (A-ARDL) technique. The findings from the A-ARDL show that renewable energy positively influenced ecological sustainability by promoting the LCF by 0.451% in the short run and 0.038% in the long run. In addition, the findings show that an increase in the rent of natural resources promotes the LCF. In contrast, the outcomes illustrate that an increase in the external debt led to an adverse impact on ecological sustainability by decreasing the level of LCF by 0.093% in the short run and 0.162% in the long run. Furthermore, the findings demonstrated that FDI negatively affects the ecological sustainability quality by reducing the LCF in the country. The study provides beneficial recommendations to policymakers in Brazil for achieving sustainable development in Brazil.

Unveiling the Interplay of Institutional Quality, Foreign Direct Investment, Inflation and Domestic Investment on Economic Growth: Empirical Evidence for Latin America

Uplifting economic growth is crucial for the sustained development and prosperity of an economy. The main objective of this study is to investigate the impact of institutional quality, foreign direct investment (FDI), inflation, and domestic investment on the economic growth of Latin America from 1996 to 2021. The study utilizes a combination of panel unit root testing, cross-sectional dependency testing, panel cointegration testing, and the Panel Autoregressive Distributive Lag (PARDL) technique to shed light on the dynamics of the region's economic development. The panel cointegration techniques confirm the existence of a long-run relationship among the selected variables over the chosen time frame. The PARDL technique is employed to determine the short- and long-run impact of institutional quality, FDI, inflation, and local investment on the economic growth of Latin America. The results show that institutional quality, FDI, and local investment have a significant positive impact on the economic growth of Latin America, while inflation has a negative impact. These findings suggest that policymakers in Latin America should prioritize improving institutional quality, encouraging FDI, and promoting local investment while controlling inflation. A comprehensive economic strategy that considers both short- and long-term dynamics is necessary, highlighting the importance of an integrated approach that recognizes their interaction. The study recommends improving the quality of institutions, especially political stability, to attract FDI and encourage domestic investment by promoting a business-friendly environment, guaranteeing financial accessibility, encouraging innovations, promoting regional and global integration, controlling inflation, reducing income inequality, and raising the standard of living.

Exchange rate and housing affordability in OECD countries

Purpose This study aims to construct alternative models to establish the dynamic relationship between exchange rates and housing affordability by estimating both the short- and long-run relationship between exchange rates and housing affordability for 18 OECD countries from 1975Q1 to 2022Q4. After that, this study demonstrates how this nexus behaves during high and low inflation regimes and turbulent times. Design/methodology/approach This study uses the panel autoregressive distributed lag technique to examine the nexus between housing affordability to capture the distinct characteristics of the sample countries and estimate various short- and long-run dynamics in the relationship between housing affordability and exchange rate. Findings Exchange rate appreciation improves housing affordability in the short run, whereas this connection tends to dissipate in the long run. Moreover, inflation can worsen housing affordability during turbulent times, such as the global financial crisis, in both the short and long run. Ignoring these changes in the relationship between exchange rates and housing affordability during turbulent times can lead to incorrect conclusions. Originality/value To the best of the authors’ knowledge, this study is the first to examine the association between exchange rates and housing affordability by demonstrating how these variables behave in high and low inflation regimes and turbulent times.

Private Sector Investments: The Implication of Deposit Money Banks’ Credits in Nigeria

Reported in this article is the empirical effect of deposit money banks’ credits on Nigeria’s private sector’s investments. The study was evaluated empirically over a period of forty-one years, from 1981 to 2021. Deposit money banks’ credits is proxied by bank credits, with interest rate and money supply moderating regressors while private sector investments is measured as private investments. Utilized for analysis are sourced secondary data from the Central Bank of Nigeria statistical bulletin and the applied methods of analysis include descriptive statistic technique, Augmented Dickey-Fuller’s Unit Root test, Auto regressive Distributed Lag technique. The findings obtained showed clearly that private investments and banks’ credits were stable at levels, as cost of credit (interest rate) and money (liquidity) supply were stationary at first difference. In addition, banks’ credits had direct and significant effects on the regress and (private investments) in Nigeria, cost of credit had negative but significant bearing on private investments while money supply had positive and significant effects the independent variable. Lastly, there exists long-run equilibrium rapport among private investment, banks’ credits, interest (credit) rate and money supply at 5 percent critical level. Sequel to these findings, it is therefore concluded that deposit money banks’ credits had significant-positive effects on private sector investments in Nigeria in both short run and long run. It is thus, recommended among others that deposit money banks need encouragement to expand credit extensions to private sector operators for sustainable enhancement of investments in this sector of the economy.

Financial Technology (Fintech) and the Performance of Firms in Nigeria

The study examines the role of fintech on the performance of deposit money banks and SMEs in Nigeria. The study employed ex-post facto research design in the work. The data generated from the secondary data were presented and analysed using quantitative method. The method of analysis used in this study was the Auto-regressive distributed lag technique (ARDL) method. The study found that financial technology have a significant impact on the performance of deposit money bank in Nigeria. This is evident from the F calculated value of 1234.17, which is greater than the F critical value of 3.11. The study found out that financial technology have a significant impact on the performance of small and medium enterprises in Nigeria. The study recommends that Deposit money banks should be encouraged to do more in getting their customers to increase the use of fintech products. In addition, SMEs should be encouraged to adopt fintech as this has been shown to serve as an instrument for business development.

Investigating the effect of an underdeveloped financial sector on non-oil export in Nigeria

Several policies have been implemented in Nigeria to shift the export trade from oil to non-oil goods; yet the share of non-oil export in total exports remains very small compared to oil export, which may be due to the low level of financial sector development in the country. Unlike previous studies on Nigeria that focused exclusively on financial sector development and aggregate export (combined exports of oil and non-oil goods), this study concentrates on financial sector development and non-oil export using an autoregressive distributed lag technique, the dynamic ordinary least squares technique, and the non-linear autoregressive distributed lag technique over the period 1986-2020. The empirical results showed that the relationship between financial sector development and non-oil export is linear. Results also showed that, in the short term, the country?s level of financial sector development worsens exports of non-oil products. However, in the long term, there is no connection between non-oil export and financial sector development, which challenges the theoretical view that trade and financial sector development are linked at any given time period. The study recommends that the government and policymakers in Nigeria should make sure that the financial sector is sufficiently developed, otherwise the goal to diversify the export base may not be achieved.

Cross-sectional dependence in financial openness and its influence on renewable energy consumption in Asia

Renewable energy is known for its lower environmental impact compared to conventional fossil fuels. The integration of financial openness plays a pivotal role in driving renewable energy consumption. The existing literature has predominantly overlooked the nonlinear impact of financial openness on renewable energy consumption. This study examines the nonlinear impact of financial openness on renewable energy consumption across different regions in Asia, such as Central Asia, East Asia, South Asia, Southeast Asia, and West Asia, by employing linear and nonlinear cross-sectionally augmented autoregressive distributed lag techniques. The findings of the linear analysis confirm that financial openness favorably impacted renewable energy consumption in the long run in all regions. On the other side, the nonlinear analysis highlights that an increase in financial openness promotes renewable energy consumption in all regions except West Asia. In contrast, the fall in financial openness hurt renewable energy consumption in Asia, Central Asia, and West Asia. Greenhouse gas emissions and GDP promote renewable energy consumption in almost all regions in both linear and nonlinear analysis, and ICT and trade help the consumption of renewable energy to rise in some regions. Policymakers in Asia and its subregions should focus on increasing the collaboration between the financial sectors of the Asian economies and increasing the flow of funds to renewable energy sources in Asia.

Fossil Energy Consumption, Carbon Dioxide Emissions and Adult Mortality Rate in Nigeria

The health implications of fossil energy consumption and carbon dioxide(CO2) emissions remain a global concern. This study examines the effectof fossil energy consumption and CO2 emissions on adult mortality rate inNigeria. The study relies on the Health Production Function and utilisesthe Autoregressive Distributed Lag technique to analyse time series datafrom 1980 to 2019. The results of the estimated model show that fossil energyconsumption reduces adult mortality rates in the short run, while co2emissions increase adult mortality rates both in the short and long run.In addition, government health expenditure follows an inverted U-shaperelationship in explaining adult mortality while foreign direct investmenthas a U-shape relationship with adult mortality in Nigeria. Trade opennessand monetary policy are insignificant in the short and long run. Itis recommended that the government should substitute clean energy forfossil fuel energy to improve the quality of life, strengthen CO2 emissionstax and ensure health funds are used for the improvement of healthcareservice delivery in Nigeria.

Investigating the impact of ICT on transport-based CO2 emissions: empirical evidence from a quantile cointegration regression analysis.

In the global initiative to leverage information and communication technologies (ICT) for reducing emissions, sub-Saharan Africa (SSA), a region of unique significance, has exhibited a delay in adopting ICT. This study aims to investigate the intricate relationship between ICT and carbon dioxide (CO2) emissions from transport in SSA. Employing the panel quantile autoregressive distributed lag (PQARDL) technique, the study analyzes panel data from 24 SSA nations spanning from 2000 to 2021. The results indicate that internet usage and fixed telephone subscriptions have a mitigating effect on CO2 emissions from transport across all quantiles in both the short and long run. However, mobile phone subscriptions contribute to CO2 emissions from transport across all quantiles. Additionally, the middle-income groups demonstrate negative relationships between ICT variables and emissions from transport, while the low-income group exhibits significant positive associations. These findings imply that ICT plays a pivotal role in mitigating transport-based emissions and reveal pronounced disparities in ICT adoption across various income groups within SSA, highlighting overarching underdevelopment in ICT infrastructure. Robustness checks employing a two-step system generalized method of moment (GMM) model reinforce our findings. The study provides policy recommendations, including the promotion of ICT infrastructure development, implementation of smart transportation solutions, and fostering public-private partnerships to address these challenges, shedding light on the path toward a greener and more sustainable transport ecosystem in SSA.

Influence of trade liberalization and digital trade on material footprint in the BRICS region

Resource efficiency (REF) is essential in designing a sustainable climate policy. Environmental susceptibility and resource deficiency instigate the economies worldwide on how to maintain and identify the factors of REF. Although numerous studies explore the determinants of sustainable resource management, scant attention has been given which integrates and evaluating its linkage with trade liberalization (TL), digital trade (DT), and technology innovations (TI). In this dimension, our study scrutinizes the influence of TL, DT, and TI on REF in BRICS economies using the annual data from 2005 to 2021. Besides, economic prosperity (GDP) and industrial value addition (IVA) are included as control variables to enhance the model's performance. For empirical assessment, the study employs the cross-sectional autoregressive distributed lag (CS-ARDL) technique to address the issues of cross-section dependency and slope heterogeneity. The model's findings reveal that TL, DT, and TI are the significant factors of REF in reducing the resource footprint; however, GDP and IVA decrease the REF by spurring resource consumption. In addition, the findings are echoed through alternative panel estimators. The overall outcomes provide result-based recommendations to the policymakers that they should promote digital transformation and technological enhancements in international trade policy to achieve resource sustainability.

Role of technology management for carbon neutrality in Gulf economies: the role of social globalization and financial development.

This study is founded on the United Nations' Sustainable Development Goals (SDGs) for 2030, particularly SDGs 8, 11, 12, and 13, among others. Investigating the impact of nonrenewable energy, social globalization, financial development, and ICT on CO2 emissions in the Gulf nations, data from 1992 to 2019 was employed using advanced panel methodologies. Both linear and nonlinear autoregressive distributed lag techniques, along with a panel causality approach, were utilized for a comprehensive analysis. These extensive investigations offer robust insights into the ecological sustainability dynamics within the Gulf nations. The empirical findings highlight that positive (negative) shifts in social globalization, economic growth, ICT, and nonrenewable energy correlate with an increase (decrease) in CO2 emissions, while positive (negative) shifts in financial development contribute to a decrease (increase) in CO2 emissions. These results emphasize the need for a policy framework aligned with the SDGs, advocating an inclusive policy framework tailored for the Gulf nations, aiming to drive progress towards achieving SDGs 7, 8, 9, 13, and 16.

Assessing the influence of fiscal and monetary policies on carbon dioxide emissions

This paper examines the impact of fiscal and monetary policies on carbon dioxide emissions in Trinidad and Tobago, using data from 1970 to 2020. We use a fiscal policy index based on government revenue and expenditure, a monetary policy index based on interest rates and reserve requirement data, and a Non-linear Autoregressive Distributed Lag technique. Our results show that expansionary fiscal policy raises emissions, while contractionary fiscal policy reduces emissions. Intriguingly, expansionary monetary policy increases emissions, while contractionary monetary policy lowers them. These findings hold significance for fiscal and monetary policymakers working on climate change mitigation strategies.

Evaluating the symmetric and asymmetric effectiveness of low carbon energy consumption for ecological footprint in China: the role of environment-related technological innovation.

The objective of this study is to scrutinize the impact of low carbon energy consumption, environmental-related technological innovation, urbanization, economic growth, and trade on China's ecological footprint from 1980 to 2021. To investigate the nature of the long-term connections between the variables, we employ the symmetric and asymmetric autoregressive distributed lag (ARDL) technique to explore the long- and short-run elasticities of coefficients. The results of ARDL and NARDL verified the environmental Kuznets curve (EKC) hypothesis in the long run in the presence of low carbon energy consumption. Moreover, the findings show that the positive part of low carbon energy consumption is negatively connected with the ecological footprint. Alternatively, the positive part of low carbon energy consumption is positively linked with the ecological footprint. The outcome highlights that environment-related technological innovation reduces the level of ecological footprint. Similarly, urbanization has a detrimental effect on the ecological footprint. Based on the estimated findings, it is suggested that China's economy should place a greater emphasis on increasing its level of investment in the low carbon energy sector and adopting severe environmental legislation to protect the economy from environmental burden.

Moderating effect of governance on healthcare and environmental emissions

Governance has become indispensable within the healthcare sector, but previous studies have not explored the potential environmental benefits linked to healthcare governance. Thus, this study focuses on the role of governance in moderating healthcare and environmental emissions in 159 low, lower-middle, upper-middle and high-income countries. To do so, cross-sectional autoregressive distributed lag (CS-ARDL) techniques were applied using panel data from 1999 to 2021, followed by the computation of threshold and marginal effect of governance on healthcare and environmental emissions nexus. Findings revealed that, with the exception of high-income countries in the short run, governance has an insignificant impact on healthcare and emissions nexus in low-, lower-middle and upper-middle-income countries. Surprisingly, the findings imply that, in the long run, countries with greater levels of governance are likely to have lesser environmental impacts related to healthcare. There was also evidence indicating that low, lower-middle, upper-middle and high-income countries must reach a certain level of governance before realising the benefits of healthcare. Therefore, to achieve lower environmental impacts from healthcare, countries must promote effective governance policies that can incentivise and enforce sustainable practices and technologies in the healthcare sector.

Evaluation of relationship between nonmetallic mineral resources production and sustainable development

This research delves into the repercussions of nonmetallic resource production on sustainability across 23 Asian economies from 2000 to 2021, employing the ARDL (Autoregressive Distributed Lag) technique. A 1% upswing in nonmetallic resource production triggers a transient 0.04% decline in sustainability, followed by a durable 0.14% upturn. Immediate effects stem from environmental resource strain, while prolonged impacts signify economic and technological growth, fostering sustainability. The Consumer Price Index (CPI) detrimentally influences sustainability by diminishing purchasing power, whereas trade openness positively contributes by facilitating technology transfer. The limited role of patent applications in promoting sustainability underscores the necessity for advancements in green patents. Initially, GDP per capita has a negative impact, but it transitions to positive in the long run, indicating a connection between income growth and sustainability. Income levels significantly influence short-term sustainability impact, particularly in lower-income countries. Policymakers are advised to prioritize efficiency, circular economy practices, green financial instruments, and sustainable corporate management to bolster sustainability in nonmetallic resource production.

Symmetric and Asymmetric Effects of Exchange Rate on Indonesia Stock Prices

Understanding the effect of exchange rates on stock prices is essential essential because of how they are tied to various aspects of the economy. This study examines the symmetric and asymmetric effects of exchange rate changes on stock prices in Indonesia using both auto regressive distributed lag (ARDL) and nonlinear ARDL (NARDL) techniques. To determine short run and the long run association between the study variables. This study using Indonesia monthly data collected from January 2022 to December 2022. The study discovered a long-run equilibrium for both the ARDL and NARDL models, showing a symmetric short and longrun relationship between exchange rates and stock prices. Exchange rates have a negative effect on stock prices, which lowers investor trust in the market. Even in linear and nonlinear analysis, inflation has a negative impact on stock prices over the and long terms. High inflation can reduce consumer purchasing power, which can result in a drop in sales and profitability for businesses that significantly rely on consumer spending. authorities and investors require taking consider the relationship between exchange rates and stock prices to manage foreign exchange and stock markets.

Does energy efficiency, renewable energy and effective capital promote economic growth in the emerging 7 economies? New evidence from CS-ARDL model

Gross Domestic Product is regarded as the major indicator which determines the standards of living in a country. Consequently, energy use is far regarded as one of the major determinants of economic growth in an economy. However, fossil fuel energy greatly contributes to environmental degradation, global warming and the spread of various diseases. The present-day research is aimed at examining the effect of energy efficiency, renewable energy and effective capital on Gross Domestic Product in the emerging seven countries (Brazil, Russia, Mexico, Turkiye, Indonesia, China and India), during the period 1990 to 2019. The main novelty of the research is that it examines the effect of effective capital on Gross Domestic Product, a study which has not been done. Effective capital which is the combined effect of energy and physical capital in the production process is inevitable in raising economic growth. Additionally, the effect of energy efficiency on economic growth in the emerging seven countries has been partially investigated. The findings of this research are robust and unique to those of past researches, because Cross-sectional Augmented Autoregressive Distributive Lag technique which is strong in the presence of cross-sectional dependence, heterogeneity and dynamics is employed. The outcomes provided in this research shows that, energy efficiency and effective capital significantly promotes economic growth, while non-renewable energy provides significant positive effect in the short-run, with no significant effect in the long-run. This study recommends the efficient utilization of energy, ensuring that each single unit of energy employed produces the highest possible output.

Dynamic effects of energy consumption, economic growth, international trade and urbanization on environmental degradation in Nigeria

MotivationA crucial but difficult goal for governments and policymakers in Nigeria in recent years has been the sustainability of economic growth. This goal must be accomplished by regulating or lowering greenhouse gas emissions, which calls for switching to a low- or zero-carbon production system. The lack of in-depth empirical studies on the environmental impact of socioeconomic variables on Nigeria and a number of unresolved issues from earlier research are what led to the current study. ObjectiveThis study fills an important empirical gap by investigating the existence of an Environmental Kuznets Curve hypothesis and the long and short-run dynamic impact of socioeconomic variables on ecological sustainability in Nigeria. Data and methodAnnual time series data covering the period 1980 to 2020 and the Autoregressive Distributed Lag technique in the presence of structural breaks were adopted for this study. ResultsThe empirical findings support the existence of environmental Kuznets curve hypothesis for Nigeria in the long and short run. Energy consumption and total import exacerbates environmental deterioration in the long and short run, whereas total export improves environmental quality in the long and short run. Financial development, which contributed to a conspicuous decrease in the level of environmental destruction in the long run, escalated it in the short run. In contrast, urbanization caused a significant increase in environmental damage in the long run but motivated a decrease in biodiversity loss in the short run. ImplicationsThe government, policymakers, and all energy stakeholders should take additional measures to ensure the implementation and diversification of energy sources to accommodate more renewable energy sources that emit less carbon in order to promote efficiency in Nigeria's production processes and lower carbon emissions. In order to promote the production and trade of environmentally friendly goods, they should also revise and strengthen environmental policies. With affordable, dependable, and sustainable energy use for higher productivity and inclusive growth, Nigeria will be able to achieve its long-term development goals of good health and wellbeing.