Autoregressive Distributed Lag Technique Research Articles

Exploring the impacts of tourism development and exchange rate on renewable energy demand in China: A nonlinear perspective

The demand for carbon-free or renewable energy sources is on the rise due to their role in boosting environmental performance and controlling emissions. The majority of previous research is based on the symmetry assumption while analyzing the association between tourism demand (TD), exchange rate volatility (ERV), and renewable energy consumption (REC). To plug this hole, this research scrutinizes the impact of TD and ERV on REC in China. To investigate the short and long-run implications of TD and ERV on REC, this analysis employs the autoregressive distributed lag (ARDL) and nonlinear autoregressive distributed lag (NARDL) techniques. The study's innovative approach enhances its scientific value through a novel and insightful examination of the variables of interest. The linear model results indicate that TD has a positive and significant long-run impact on REC. Conversely, ERV has a negative and significant long-run impact on REC. The NARDL model finds that a positive TD shock significantly and positively affects REC in the long run, while a negative TD shock does not exert a noticeable impact on REC. A positive ERV shock significantly and negatively affects REC in the long term, whereas a negative ERV shock has an insignificant impact on REC. Conversely, only a positive ERV shock has a significant positive impact on REC in the short run. These findings imply that policymakers must adopt stable and reliable foreign exchange market policies and promote sustainable tourism practices at tourist hotspots.

Economic Factors Influencing Housing Prices in Pakistan

The aim of this research is to explore the factors influencing housing prices in Pakistan. The author used monthly time series data for the period from 2011 to 2020, which were obtained from different sources: housing prices data from zameen.com, Karachi interbank offered rate (KIBOR) as a proxy for monetary policy, consumer price index as a proxy for inflation, and exchange rate data from the State Bank of Pakistan. Various methods, such as autoregressive distributed lag (ARDL), comparative analysis and deductive analysis were employed. Before using the ARDL technique, a proper lag length was selected, which turned out to be 11 months. Various diagnostic tests indicated model stability with no autocorrelation or structural breaks. The author concluded that the KIBOR rate negatively affected housing prices, while inflation and exchange rates affected house prices positively.

Balancing the scales: Does public debt and energy poverty mitigate or exacerbate ecological distortions in Nigeria?

AbstractAmid Nigeria's economic growth and energy challenges, the escalating public debt (PB) levels and persistent energy poverty (EP) raise critical questions about their potential impacts on the environment. Given the potential conflict among economic development, EP alleviation and ecological conservation, it becomes pertinent to understand whether increased PB and efforts to address EP inadvertently contribute to or alleviate ecological imbalances within the country. Hence, this research investigates the effect of PB and EP on the load capacity factor (LCF) in Nigeria. Using the STIRPAT model and annual data from 1990 to 2021, the study explores the relationships among total PB, EP, gross domestic product per capita, urbanization and LCF. Descriptive analysis, correlation assessments and unit‐root tests precede the data analysis conducted with the autoregressive distributed lag (ARDL) model and dynamic ARDL (DARDL) technique. Key findings reveal significant negative effects of urbanization and EP on LCF. Additionally, the ARDL and DARDL procedure highlights a positive long‐term relationship between PB and LCF. Both ARDL and DARDL analyses show a negative short‐term relationship between GDP growth per capita and LCF, signalling the need for sustainable economic practices. The study concludes with policy recommendations that aim to promote sustainable development and address ecological imbalances by tackling EP and PB challenges in Nigeria.

Impact of Remittances on Inflation in Nigeria

International remittances have emerged as an indispensable financial resource for development. However, despite remittances’ growing relevance in overall foreign financial flows in Nigeria, the consumptionoriented nature of the economy of the country presents an intriguing opportunity to consider the connection between foreign remittances and inflation within the country. This study investigates the influence of foreign remittances on inflation in Nigeria from 1990 to 2021. The autoregressive distributed lag technique was employed to scrutinize the long-term behavior of inflation and remittances. The empirical findings indicate that foreign remittances exhibit a negative and statistically insignificant correlation with inflation in Nigeria. The money supply has a satisfactory impact on inflation and is statistically substantial. According to statistical analysis, the exchange rate and economic growth have a negative correlation with inflation, while the exchange rate of the national currency remains stable. Additionally, economic growth has a significant impact on inflation, whereas no correlation has been found between remittances and inflation in the short run. The study argues that in order to ensure price stability, it is important to establish and maintain a mechanism that effectively controls the growth of the money supply and aligns it with economic development goals. This mechanism should promote interaction between financial and fiscal authorities to establish a coherent structure that adjusts monetary policy based on government spending, stimulates sustainable economic growth to reduce inflation, and encourages the creation of jobs and production zones to accelerate economic growth. This may lower inflation by increasing the supply of goods and services. It is necessary to support these efforts by regularly monitoring exchange rate changes and their implications for inflation. Nigeria can maintain economic stability and low inflation by balancing domestic and foreign financial flows.

Intellectual property's role in achieving carbon neutrality through resource efficiency

This study conducts an assessment and comparative analysis of the impact of intellectual property on resource efficiency in both emerging economies (E7) and developed economies (G7). The investigation utilizes annual data spanning from 2000 to 2020 and employs the ARDL (Autoregressive Distributed Lag) technique. The findings reveal distinct patterns: intellectual property rights have a limited impact on resource efficiency in E7 nations, while they act as catalysts for enhancing resource efficiency in G7 countries, showing both short-term and long-term effects. Furthermore, the analysis uncovers varying effects of the Consumer Price Index (CPI) on resource efficiency, with notably adverse consequences in E7 countries. ICT development has a negative influence on resource efficiency in E7 countries but a positive impact in G7 countries, primarily due to disparities in energy sources. Additionally, the stock exchange market value and engagement in green energy trade emerge as positive drivers of resource efficiency in both E7 and G7 groups. Building on these insights, the study proposes practical policy recommendations, such as developing energy-efficient solutions, expanding international collaboration for the exchange of green technologies, and providing green financial support and grants.

Non-linearity in the Phillips curve: evidence from Nigeria

PurposeThis study reinvestigates the validity of the Phillips curve in Nigeria for the period 1980–2020 by considering the asymmetric nexus between unemployment and inflation.Design/methodology/approachThe nonlinear autoregressive distributed lag (NARDL) technique was used to decompose the unemployment variable into two components: tight and loosened labour markets.FindingsThe empirical outcome shows that unemployment has a significant negative effect on inflation when the labour market is tight and a weakly negative and significant effect on inflation when the labour market is loose. The study confirms an asymmetric Phillips curve in Nigeria since the positive (tight) unemployment rate exerts a greater effect on inflation than the negative (loosened) unemployment rate.Practical implicationsThe findings of this study have important implications for implementing monetary policy in Nigeria.Originality/valueTo the best of the authors’ knowledge, this is the first study to investigate the existence of a nonlinear Phillip curve in Nigeria.

The Asymmetric Effects of Foreign Direct Investment Inflow on Economic Growth: Fresh Evidence from Somalia

Purposes: Although there has been some progress since the 2012 establishment of the Federal Government Somalia, Foreign direct investment is the one of critical engines in economic growth. The latest value of foreign direct investment for 2021 was 5.97% of GDP, comparison of previous years to 2020 was 6.74% of GDP in Somalia. This paper aims to investigate the asymmetric effects of foreign direct investment (FDI) inflow on economic growth in Somalia from 1977-2021. In addition to FDI, inflation, gross capital formation, and trade openness are used as control variables to examine their influence on economic growth. Design/Methodology/approach: This research employs the nonlinear autoregressive distributed lag (NARDL) technique. Finding: The findings reveal that a positive shock in FDI positively influences Somalia's economic growth, while a negative FDI has a negative impact. The Wald test establishes the asymmetric effect of FDI on economic growth in both the short and long run. Moreover, trade openness and inflation rate significantly reduce the pace of economic growth in both the long and short run. However, gross capital formation only boosts economic growth in the long run. Research limitations/ implications: although Somali faced a lot of challenges including civil war, terrorists, macroeconomics instability, poor infrastructure, and corruptions are not considered owing to data availability. Policy implications: firstly, increase revenue through tax reforms and anti-corruption measures. Secondly, initiatives policies that help public finance investments and reduce trade barriers. Finally, maintain macroeconomic stability of inflation, and exchange rates, can help reduce the negative impact on economic growth improve the investment climate and Somalia’s image abroad.

Testing Environmental Kuznets Curve Hypothesis in Somalia: Empirical Evidence from ARDL Technique

Economic growth is typically attributed as the fundamental cause of environmental problems due to higher production which generates more pollution. The EKC hypothesis is used to test the link between economic growth and environmental pollution. In this regard, this study aims to ascertain the validity of the EKC hypothesis in Somalia using time series data spanning between 1989 to 2020. The autoregressive distributed lag (ARDL) technique is applied to verify the presence of EKC and integrations between the sampled variables. According to the empirical result, it was revealed that all the regressors are statistically significant except trade openness. Agriculture production and squared economic growth are negatively related to environmental pollution whereas economic growth significantly impedes environmental quality in Somalia. Hence, an inverted U-shaped relation between growth and pollution has been found confirming the EKC hypothesis. In contrast, both economic growth and squared growth Granger cause environmental pollution but not vice versa. Policymakers should develop environmental policies to help reduce pollution emissions in order to achieve economic sustainability in the country by promoting and investing in cleaner energy resources to improve Somalia’s economy's overall energy efficiency.

Elements of Internally Generated Revenue and Economic Growth in Lagos State

State governments in Nigeria need revenue to invest in social infrastructures and creating social safety nets to stimulate economic growth. One of the sources of revenue that state governments have direct control over to maximize domestic revenue is the internally generated revenue. Empirical evaluation of the relationship between internally generated revenue and economic growth, therefore, becomes imperative. Consequently, this study examined the relationship between the components of Internally Generated Revenue (IGR) and Economic Growth (GDP) in Lagos State. The research design is ex-post facto while the period of study was from 2012 to 2020. The data obtained on the dependent and explanatory variables from National Bureau of Statistics and Lagos State Bureau of Statistics was analysed with the Autoregressive Distributed Lag technique. The results show a long-run significant relationship for other taxes, direct assessment and road taxes with gross domestic product in Lagos state, leaving out pay as you earn with insignificant impact. In the short run, however, other taxes, direct assessment, pay as you earn and road taxes have positive and significant relationship with gross domestic product. The F-statistic of 824.42 with a probability value of 0.000 at 1 percent level suggests that internally generated revenue exerts significant influence on gross domestic product in Lagos State. The study concluded that internally generated revenue strengthened economic growth in the state. Lagos State government should sustain the current tempo of domestic revenue mobilization drive with special emphasis on pay as you earn as a component of internally generated revenue to spur economic growth.

Effect of Government Expenditure on Inflation in Nigeria

This study examined the effect of government expenditure on inflation in Nigeria while disaggregating expenditure into capital and recurrent. The study also examined the response of inflation to changes in government expenditure in Nigeria. Secondary data collected from the Central Bank of Nigeria Statistical Bulletin was employed for a period of thirty-eight years (i.e. 1981-2019). The Auto Regressive Distributed Lag technique was employed. For the first model explaining government capital expenditure, short run estimates reveal that in the current period, government capital expenditure has a significantly negative relationship with inflation. For government recurrent expenditure, it was established that government recurrent expenditure has a positive relationship with inflation. The impulse response test used in analyzing the effect of an unanticipated change in government expenditure (capital and recurrent) on inflation shows that the effects of the change in both cases are temporary as they are seen to revert to the mean. The study recommends that the government should maintain a good strategic balance between capital and recurrent expenditure to prevent the economy from being consumption - based.

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).