Bootstrap Panel Causality Test Research Articles

Panel Data Analysis of the Impact of External Debt on Economic Growth and Inflation: The Case of Emerging Market Economies

This study aimed to analyze the impact of external debt on economic growth and inflation for emerging market economies for the period 1995-2020 using the panel data method. To this end, the study used the data on 12 countries listed in the Morgan Stanley Capital Index (MSCI) Emerging Markets Index. The results of the panel cointegration analysis showed that changes in external debt stock affect economic growth in the opposite direction and inflation rate in the same direction. According to the country-specific results of the panel cointegration analysis, external debt had a negative impact on economic growth in all countries except Mexico, Egypt, India, and Türkiye. External debt increased inflation in all countries except China, Egypt, India, South Africa, and Thailand. The Bootstrap panel causality test results showed a unidirectional causality from economic growth to external debt stock in China, India and Thailand, and a bidirectional causality in China. A unidirectional causality was also found from external debt stock to inflation in Colombia, and a unidirectional causality from inflation to external debt in China, India, Peru, and Thailand. Based on the cointegration analysis results, it is recommended that external debt should be used to finance more productive investments in order to ensure sustainable economic growth in Brazil, China, Colombia, Indonesia, Peru, Philippines, South Africa, and Thailand. The panel causality test results also showed that economic growth in China, India, and Thailand requires more external resources. Based on these results, it is recommended to reduce external debt in order to reduce inflation in Brazil, Colombia, Indonesia, Mexico, Peru, Philippines, and Türkiye.

Attainment of Zero Emission Targets by Transition Towards sustainable development of value of creative products

Wind, hydropower, solar, and other renewable energy (RE) replace conventional energy sources when the global green and low-carbon transition is broadly considered. Therefore, the current study investigates the core determinants of renewable energy development (RED) in China from 1990 to 2020: carbon emissions efficiency (CEE), green finance (GF), urbanization (URB), openness (Op), and gross domestic product (GDP). However, advanced econometric techniques are used to investigate the desired objectives, such as an interactive fixed effects panel test, threshold panel regression, Pooled Mean Group, and Bootstrap Panel causality test. The research findings shows a negative association of CEE with renewable energy development. According to these findings, which are in line with the optimization method, it seems that RED is doing an outstanding job of reaching carbon neutrality. However, there found an increase in RED via green finance and economic growth over time. Also, a negative relationship exists between urbanization and openness with energy development. In comparison, zero-emission competition is expected to reshape the globe’s demographics.

EMIGRATION AND ECONOMIC GROWTH IN EUROPEAN TRANSITION ECONOMIES: EVIDENCE FROM A BOOTSTRAP PANEL CAUSALITY TEST IN ROLLING WINDOWS

The relationship between migration and economic growth has long been a matter of discussion in theoretical and empirical domains. Previous studies which explored the link between variables suggested an estimation for an unchanging parameter. Despite that; prevailing economic and political circumstances, effective contracts and agreements, implemented policies, ongoing crises or shocks can cause a shift in the relationship across variables in due course. This study analyses the relationship between emigration and economic growth in transition economies in Europe for the period between 1995-2019 by administering time-varying causality test. Findings obtained from the bootstrap panel causality test suggest that there is a bidirectional causality relationship between emigration and economic growth only in Estonia but results of bootstrap panel rolling window causality analysis reveal that for the subperiods, there exist hidden causal relationships within Hungary, Lithuania, Poland, Slovakia and Slovenia.

Public Expenditures, Economic Growth and Income Inequality: Empirical Evidence from the Commonwealth of Independent States

This study has examined the causality relationship between public expenditures, economic growth and income inequality for transition economies called the Commonwealth of Independent States (CIS). In the study, in which the 1998-2019 period was analyzed, the effects of public expenditures on economic growth and income inequality were determined with the bootstrap panel causality test. Bootstrap panel causality test results show that there is a one-way causality relationship from public expenditures to economic growth for Armenia, Belarus, and Kazakhstan. On the other hand, a one-way causality relationship has been determined from public expenditures to income inequality in Belarus and Kazakhstan, and from income inequality to public expenditures in Kyrgyzstan. In Moldova and Russia, however, no causal relationship could be obtained between the variables. The overall evaluation of the findings obtained from the panel causality tests concluded that public expenditures in CIS member countries are closely related to both economic growth and income inequality. CIS member countries need state interventions in order for the market system to fully settle in transition period. However, implementing policies that do not exclude private investments and do not harm the functioning of the market economy should be elaborated during practicing public expenditure policies in these countries in transition.

The Causality Relationship between Trade and Environment in G7 Countries: Evidence from Dynamic Symmetric and Asymmetric Bootstrap Panel Causality Tests

In this paper, we test the dynamic symmetric and asymmetric causality relationship between the ecological footprint and trade openness in G7 countries by suggesting a new bootstrap panel causality test based on seemingly unrelated regressions. We analyzed the time-varying behavior of the symmetric and asymmetric panel causality relationship test to reveal the instabilities in the causality relationships. The obtained results suggest a relationship between the trade openness and ecological footprint in some years of the analysis period and between the negative and positive shocks.

Analysis of the Relationships Between Agricultural Producer Protection and Macroeconomic Variables in Fragile Five Countries by Bootstrap Panel Causality Test

Agriculture is a leading sector that provides capital accumulation to sustain the economic development processes of developing countries’ economies. The low supply and demand elasticity of agricultural products cause fluctuations in agricultural product prices and producer income. Therefore, the first negative reflection of price instability that may arise from fluctuations is generally observed in farmers. Hence, policymakers intervene in the agricultural sector to reduce the instability in agricultural product prices and protect agricultural producers against these effects, as well as the capital accumulation needed for growth and development. Based on this background, this study analyzes the causality relationship between agricultural producer protection and macroeconomic variables of Brazil, Indonesia, India, Turkey, and South Africa, which are called the Fragile Five countries, using the panel bootstrap panel causality test developed by Kónya (2006) with the data between 2000 and 2020. The study findings differ among the countries in the sample. It was determined that there are causality relationships between agricultural producer protection and economic growth, economic development and inflation variables in all countries except India. Although it is difficult to generalize the main findings of the study to all countries in the sample, we can conclude that economic growth, economic development and inflation, and agricultural producer protection variables interact with one another. The study also concludes that the protective and supportive measures for agriculture, a significant sector for the macroeconomic performance indicators of the country’s economies, are too important to be neglected.

Green Finance and Green Energy Nexus in ASEAN Countries: A Bootstrap Panel Causality Test

Green energy is a crucial component in addressing expanding energy demands and combating climate change, but the possible negative repercussions of these technologies are frequently disregarded. Green energy’s deployment is tied to environmentally sustainable development goals (SDGs). It can only be achieved by scaling up the finance of investment that provides environmental benefits through new financial instruments and new policies, such as green banks, green bonds, community-based green funds, green central banking, etc. In an effort to address the issues with IPAT and ImPACT, this study employed the STIRPAT model approach, which is a proven framework for energy economics analysis. The author gathers yearly data spanning 2002–2018 for six ASEAN member countries with the aim of investigating the relationship between CO2 emissions, green finance, energy efficiency, and the green energy index (GEX). After preliminary tests, the study employed the Westerlund test and Johansen Fisher test for long-term equilibrium and estimated the Granger causal links between variables using the generalized method of moments (GMM). The results indicate that green bonds are an effective technique for promoting green energy projects and considerably reducing CO2 emissions. Therefore, governments should establish supporting policies with a long-term perspective to increase the investment of green energy projects related investment from private participants to ensure sustainable growth and address environmental challenges. This strategy may be appropriate during and after the COVID-19 period.

Asymmetric causality between renewable energy consumption and economic growth: fresh evidence from some emerging countries.

Renewable energy is an important alternative energy source in terms of both sustainable growth and climate change. In this paper, the causality nexus between renewable energy consumption and economic growth is analyzed in 15 emerging countries covering the period from 1990 to 2015. The paper adopts the bootstrap panel causality test which is developed by (Kónya, Econ Model 23:978–992, 2006) to consider the cross-sectional dependence. The results of (Kónya, Econ Model 23:978–992, 2006) prove the validity of the neutrality hypothesis in all countries. Then, we analyze asymmetric causality among the variables. Asymmetric test denotes a causality from negative shocks of economic growth to negative shocks of renewable energy consumption in South Africa, Thailand, and Turkey. Thus, a negative shock in economic growth hampers renewable energy consumption in these countries. Our results demonstrate the consequences of the application of disaggregated data in the analyses.

An Approach to the EKC Hypothesis Considering Tourism Industry and Renewable Energy Consumption: Considering Cross-Sectional Dependence and Heterogeneity

Purpose - This study analyzed the Environmental Kuznets Curve (EKC) hypothesis between CO2 emissions and economic growth using panel data from 37 OECD countries from 1998 to 2015, and investigated the impact of tourism and renewable energy consumption on CO2 emissions. Design/Methodology/Approach - We used AMG (augmented mean group) estimation and Dumitrescu-Hurlin Bootstrap panel causality test considering the cross-sectional dependence and heterogeneity of panel data for long-term and short-term analysis. Findings - As a result of the long-term analysis, we confirmed that the EKC hypothesis was established between CO2 emission and economic growth. And it has been estimated that tourism increases CO2 emissions, and renewable energy consumption reduces CO2 emissions. As a result of the short-term analysis, we found that economic growth, tourism and renewable energy consumption affect CO2 emissions. Research Implications - It implies suggest that sustainable economic growth is possible through the development of eco-friendly tourism industry policies along with policies to increase renewable energy consumption. OECD countries should develop eco-friendly tourism industries using renewable energy in the short and the long term, and come up with measures to improve the efficiency of resource utilization in the tourism industry by closely reviewing and cooperating with other countries.

Application of Bootstrap Panel Granger Causality Test in Determining the Relationship between Renewable and Non-Renewable Energy Consumption and Economic Growth: a Case Study of OPEC Countries

The purpose of this article was to investigate the relationship between renewable and non-renewable energy consumption on economic growth in 10 oil-exporting countries for the period 1980 to 2018. To get to this purpose, the bootstrap panel causality test has been deployed. According to the findings of this study on renewable energy consumption, the results of the causality test showed that the growth hypothesis for Ecuador is well grounded. Besides, the conservation hypothesis is valid for Algeria and Iran. The feedback hypothesis based on a two-way relationship between renewable energy consumption and economic growth in Saudi Arabia and the UAE has also been confirmed, while there was evidence of the neutrality hypothesis for Angola, Iraq, Nigeria, Venezuela, and Congo. Regarding non-renewable energy consumption, the feedback hypothesis has been confirmed for Ecuador, UAE, Iran, Saudi Arabia, Nigeria, Venezuela, and Congo. The conservation hypothesis was observed for Iraq and Algeria. Also, there has been no causal relationship between non-renewable energy consumption and economic growth for Angola, and the neutrality hypothesis is confirmed.

The Relationship between Defense Expenditures and Employment in NATO Member States: Bootstrap Panel Causality Test

In recent years, global tensions, geopolitical risks, political crises, regional conflicts, and wars have played an important role in the increase of defense expenditures of countries. The economic effects of increased defense spending have become one of the frequently discussed topics. The aim of this study is to examine the causal relationship between defense expenditures and employment rates in 18 NATO member countries. To this end, the relationship between defense expenditures and employment rates were analyzed using the Kónya (2006) Bootstrap Panel Causality Test in the post-Cold War period. According to the findings from the 1991-2018 period, a causality relationship was found in 5 of the 18 countries in the panel from defense expenditures to employment, and in 3 of the 18 countries from employment rates to defense expenditures. Thus, it seems impossible to make a general inference about the causality relationship between defense expenditures and employment in NATO member countries.

Causality Relationships Between Per Capita Income and Research and Development (R&D) Expenditures in Asian Tigers, China, and Turkey

This study aims to investigate the relationship between R & D expenditures and per capita income for Asian Tigers (Hong Kong, Korea, Singapore), China, and Turkey. For this purpose, the relationships between variables are investigated using the bootstrap panel causality test developed by Konya (2006). In the study, analyses are made by using data for the period 1998-2016. According to the analysis results, there is a unidirectional causality relationship from R&D expenditures to per capita income in Hong Kong and Korea. On the other hand, there is a unidirectional causality relationship from per capita income to R&D expenditures in China and Turkey. The coefficients of these causality relationships are positive.

Energy Diversification and Economic Development in Emergent Countries: Evidence From Fourier Function-Driven Bootstrap Panel Causality Test

Energy is a crucial development indicator of production, consumption, and nation-building. However, energy diversification highlighting renewables remains salient in economic development across developing economies. This study explores the economic impact of renewables (RE) and fossil fuel (NRE) utilization in 17 emerging nations. We use annual data with timeframe between 1980 and 2016 and propose a bootstrap panel causality approach with a Fourier function. This allows the examination of multiple structural breaks, cross-section dependence, and heterogeneity across countries. We validate four main hypotheses on the causal links attached to the energy consumption (EC)-growth nexus namely neutrality, conservation, growth, and feedback hypotheses. The findings reveal a causal relationship running from RE to GDP for Brazil, Egypt, Indonesia, Korea, Pakistan, and the Philippines, confirming the growth hypothesis. Besides, the results validate the conservation hypothesis with causality from GDP to RE for China, Colombia, Egypt, Greece, India, Korea, South Africa, and Turkey. We identify causality from NRE to GDP for Pakistan, Mexico, Malaysia, Korea, India, Greece, Egypt, and Brazil; and from GDP to NRE for Thailand, Peru, Malaysia, India, Greece, Egypt, and Colombia. We demonstrate that wealth creation can be achieved through energy diversification rather than relying solely on conventional energy sources.

YÜKSEK-ORTA GELİRLİ ÜLKELERDE TURİZM VE GSYİH ARASINDAKİ BOOTSTRAP NEDENSELLİK ANALİZİ

One of the sources that increases the income of the countries is tourism. Many studies show that there are causal associations between GDP and tourism in various countries and country groups. In this respect, the purpose of current paper is to explore the causal relationship between tourism and GDP in 33 upper-middle income countries. Therefore, bootstrap panel causality test of Emirmahmutoğlu and Köse (2011) to annual data from 1995 to 2018. This test is powerful both under cross-section dependency and independency, also when the number of observations is small. The findings reveal that a unidirectional causality from tourism to GDP for Grenada and South Africa; a unidirectional causality from tourism to GDP in Albania, Bulgaria, Dominic Republic, Ecuador, Jamaica, Peru and Sri Lanka; bidirectional causality between tourism and GDP in Armenia, Mauritius and North Macedonia; and no causality for remaining 21 countries.

RETHINKING THE REASONS OF GREENHOUSE GASES EMISSION IN ASEAN COUNTRIES: FINDING REASONS IN URBANIZATION, INDUSTRIALIZATION AND POPULATION GROWTH

Recently, more of the greenhouse gases emission has been seen within ASEAN countries. Basically, there are different factors that can cause greenhouse gas emissions. Some of the reasons of greenhouse emission can be industrialization, urbanization, population growth, manufacturing processes, energy consumption etc. In this research paper, the impact of urbanization, industrialization, population growth on greenhouse gases emission has been analyzed. This analysis has been done in the context of Brunei, Laos, Cambodia, Indonesia, Myanmar, Malaysia, Philippines, Vietnam, Singapore and Thailand – the ASEAN countries. The methodology used for the analysis is the bootstrap panel causality test, LM panel test of co-integration, panel unit root test of Pesaran and Shin that permit cross-sectional dependency. The outcomes of the research have proposed that hypothesis of emission of greenhouse gases is valid in Vietnam, Indonesia and Laos. However, these factors play less significant role in greenhouse gas emission in Philippines, Malaysia and Myanmar. These factors have some impact over greenhouse gas emission in Brunei, Cambodia and Singapore too. Based on the overall analysis given in the research, it can be stated that urbanization, industrialization and population growth do have an impact over the greenhouse gas emission. Keywords: Greenhouse Gas Emission, Gross Domestic Product, Urbanization, Industrialization, Population Growth JEL Classifications: P25, O14 DOI: https://doi.org/10.32479/ijeep.10688

OECD ÜLKELERİNDE BİLGİ VE İLETİŞİM TEKNOLOJİLERİNİN İŞGÜCÜ VERİMLİLİĞİ ÜZERİNE ETKİSİ

1980’den sonra bilgisayar kullanımının artmasıyla ve internetin hızla yayılmasıyla birlikte bilgi ve iletişim teknolojileri önem kazanmıştır. Bilgi ve iletişim teknolojilerinin yaygınlaşması ile birlikte ekonomideki verimlilik de gözle görülür şekilde artmıştır. Ekonomiler, pazar paylarını geliştirip genişletmek, daha az maliyetle üretim yapmak ve verimliliği artırmak amacı ile bilgi ve iletişim teknolojilerini kullanmaya yönelmişlerdir. Bu çalışmada, bilgi ve iletişim teknolojilerindeki gelişmeler ile işgücü verimliliği arasındaki nedensellik ilişkilerinin Bootstrap Panel nedensellik testi olan Konya (2006) nedensellik analizi ile 1985-2010 dönemi ve verisi olan OECD ülkeleri için araştırılması amaçlanmıştır. Elde edilen sonuçlar ülkeden ülkeye farklılık göstermiştir. Bazı ülkelerde anlamlı nedensellik ilişkileri tespit edilmişken, bazı ülkelerde herhangi bir nedensellik ilişkisi tespit edilememiştir. Jel Kodu: J23, O33, D21.

Quality of Education and Technological Readiness: Bootstrap Panel Causality Analysis for Northern European Countries

ABSTRACT The purpose of this study is to determine the direction of causality between the quality of education and technological development for the selected Northern European countries over the period 2006–2017. To this end, we employ the bootstrap panel causality test. The findings of our study indicate that the quality of education leads to changes in technological readiness in the long run. Interestingly, the reverse direction causal effect is not detected. These findings provide further evidence on – other – positive impacts of the Nordic educational system and are likely to stimulate the interest of policymakers in this field.

Testing the environmental Kuznets curve for G7 countries: evidence from a bootstrap panel causality test in rolling windows.

The Environmental Kuznets Curve hypothesis is a theoretical proposition explicating the link between a locality's income level and environmental degradation. Previous studies estimated the current relationship with an unchanging parameter. However, due to changes in global conomic and political conditions, natural disasters, technological shocks, and implemented policies, the link between income and environmental degradation is about to change. The study investigates the income-pollution nexus for G7 countries-Canada, France, Germany, Italy, Japan, the UK, and the USA-from 1970 to 2014 using a novel methodology: bootstrap panel rolling window causality. In this context, this approach is advantageous for determining the link between income and pollution level in sub-sample periods, rather than assuming an unchanging parameter, and captures the hidden causal linkages between income and environmental pollution. The results confirm the validity of the EKC hypothesis in Japan and the USA, whereas in the other countries, the relationship between EF and GDP exhibits no evidence for an inverted U-shaped pattern.

Cause and effect of renewable energy consumption on urbanization and economic growth in China's provinces and regions

Renewable energy development is one of the cleaner production paths for China's transformation of urbanization and economic development. Recognizing the nexus among them may help China to formulate a targeted policy for efficient and clean energy utilization, as well as for carbon reduction. Based on the panel data of 30 provinces and seven geographical regions over the period of 1997–2015, we apply a bootstrap panel causality test to explore the cause and effect of renewable energy consumption on urbanization and economic growth in China after a cross-sectional dependence test and a slope homogeneity test. We find that China's renewable energy consumption, urbanization and economic growth in one region might be influenced by the others. However, no causality is found in 80% of provinces and 71% of geographical regions for the nexus of renewable energy consumption and urbanization, and no causality is found in 53% of provinces and 43% of geographical regions for the nexus of renewable energy consumption and economic growth. Besides, significant geographical differences are found for the nexus. Therefore, the Chinese government should not only strengthen a unified renewable energy management system to advocate regional cooperation, but also give full play to the weak joint linkages and adopt differentiated renewable energy policies according to local conditions. The interactive mechanism and a virtuous cycle among the three indicators should be established in the medium and long term to help China's energy use towards a cleaner transition.

The effect of biomass energy consumption on economic growth in BRICS countries: A country-specific panel data analysis

In this study, the relationship between economic growth and biomass energy consumption has been examined within the framework of the production function for Brazil, Russia, India, China, and South Africa—the BRICS countries from 1992 to 2013 using the cross-sectionally augmented Im, Pesaran and Shin (CIPS) panel unit root test, the Westerlund and Edgerton bootstrap LM panel cointegration test, and the bootstrap panel causality test that allow cross-sectional dependence. The results show that the growth hypothesis is valid in Brazil and India; however, the conservation hypothesis is valid in China and South Africa. The hypothesis that applies to Russia is the feedback hypothesis. The main finding is that BRICS countries should increase the use of biomass energy consumption to sustainable environment, promoting economic growth and reducing energy dependency.