Dumitrescu-Hurlin Panel Causality Research Articles

Towards unlocking the chain of sustainable development in the BRICS economies: Analysing the role of economic complexity and financial risk

AbstractIn response to the mounting risks posed by climate change, innovation and mitigation of pollution have emerged as key drivers of sustainable growth and the environment. This research aims to explore the effect of economic complexity and financial risk on the load capacity factor. The research employed a series of second‐generation techniques such as a method of moment quantile regression and Dumitrescu Hurlin panel causality covering the period between 1990 and 2018. The findings provided convincing evidence of cointegration. The long‐run analysis showed that renewable energy use, economic complexity and financial risk contribute to ecological quality. However, non‐renewable energy and economic progress threaten ecological quality by lessening the load capacity factor. The research revealed causality from financial risk, economic growth, disintegrated energy and economic complexity to load capacity factor. Lastly, a policy framework is proposed based on the study findings to accomplish the sustainable development goals (SDGs) 7, 13 and 17.

Impact of Economic Growth, Energy use and Research and Development Expenditure on Carbon Emissions: An Analysis of 29 OECD Countries

This study attempts to investigate the impact of economic growth, energy use and research and development expenditure on carbon dioxide emissions for a panel of 29 Organisation for Economic Development and Cooperation (OECD) countries over 1995-2019. We employ two sets of econometric techniques.The first set of estimation techniques assumes cross sectional independence in the panel (also known as the first generation tests). The first generation tests include the panel unit root tests- Levin et al ( LLC), Im et al (IPS) ADF-Fisher and PP-Fisher unit root tests, Pedroni (1999) and Kao cointegration tests and the Fully Modified Ordinary Least Square (FMOLS) for computing output elasticities. The second set of econometric tests are performed after checking for cross sectional dependence using the second generation tests. These include Pesaran CD test, Breusch Pagan CD test, to establish cross sectional dependence followed by Cross-sectional augmented Im-Pesaran-Shin (CIPS) panel unit root test developed by Pesaran (2007)to test for panel stationarity followed by the error correction based panel cointegration test proposed by Westerlund and Edgerton (2007) with bootstrap. Augmented Mean Group (AMG) is performed to estimate output elasticities while Dumitrescu-Hurlin (DH) Panel Causality tests is done to ascertain causality between variables We obtain the same results for the effect of GDP and energy use on carbon emissions from the two strategies but conflicting results for the impact of research and development spending on carbon emissions, although there is evidence of stronger cointegration under the first generation tests. Based on findings from the two approaches, we conclude that with a rise in GDP, carbon emissions fall in OECD but increase with a rise in energy use. Aggregate research and development expenditure has a positive effect on carbon emissions under cross sectional independence but a neutral effect when estimated using cross-sectional dependence tests giving inconclusive results.

The impacts of tourism development on income inequality: how does tourism capital investment contribute to income distribution? Tourism Agenda 2030

PropósitoEste estudio analiza el papel del desarrollo turístico en la disminución de la desigualdad de ingresos en el sur de Asia entre 1996 y 2020. Para ello, el estudio explora la conexión entre el desarrollo del turismo, la inversión turística, el crecimiento económico, la globalización del comercio y la desigualdad de ingresos.Diseño/metodología/enfoqueEste estudio utilizó diversas técnicas, como la dependencia transversal (DSC), la raíz unitaria, las técnicas de cointegración, los estimadores de la elasticidad a largo plazo y la causalidad a corto plazo entre las variables del estudio. Este estudio adoptó los errores estándar de Driscoll-Kraay y las estimaciones de causalidad de panel de Dumitrescu Hurlin.ConclusionesLos resultados del presente estudio revelan que el turismo tiene una asociación en forma de U invertida con la desigualdad de ingresos a largo plazo, lo que apoya la hipótesis de la curva de Kuznets. En cambio, la inversión de capital en turismo tiene una asociación negativa significativa con la desigualdad de ingresos. Al mismo tiempo, el crecimiento y la globalización del comercio afectan positiva y significativamente a la desigualdad de ingresos. Además, el desarrollo del turismo tiene una causalidad de retroalimentación bidireccional de la desigualdad de ingresos. Estos resultados también apoyan el “efecto precio” del turismo sobre la desigualdad de ingresos. Por lo tanto, este estudio proporciona más implicaciones prácticas con respecto a la formulación de políticas en materia de turismo y desigualdad de ingresos en las economías en desarrollo para apuntar a la Agenda 2030.Originalidad/valorEl presente estudio es único al considerar la dependencia transversal en la estimación del modelo que ha sido ignorada en estudios anteriores y aporta nuevas perspectivas a la literatura existente al investigar cómo el desarrollo del turismo y la inversión de capital en turismo contribuyen a la desigualdad de ingresos. Este estudio se centra en las economías del sur de Asia que han sido poco estudiadas y se extiende desde 1996 hasta 2020. Como resultado, este trabajo tiene más implicaciones prácticas para la formulación de políticas en la industria turística y la desigualdad de ingresos en las economías emergentes.

The impact of natural resources, economic growth, savings, and current account balance on financial sector development: Theory and empirical evidence

The development of the financial sector is one of the main macroeconomic goals for developing countries as well as developed ones. The literature focusing on the determinants of financial sector development presents very diverse and inconsistent results. Therefore, the main aim of the study is to empirically investigate the long run and causal linkages between natural resources, economic growth, savings, current account balance and financial sector development for 33 developing countries. The study applies the cross-sectionally augmented autoregressive distributed lag (CS-ARDL) and Dumitrescu-Hurlin panel causality tests, which are among the new panel data techniques. The results reveal that natural resources, economic growth, savings, current account balance and financial sector development are cointegrated. Natural resources, economic growth and current account balance negatively affect financial development while savings stimulate financial development. It is found that there exists a bi-directional causality between all the explanatory variables and financial development. Theoretical and policy implications are discussed within the perspective of macroeconomics and financial sustainability for developing countries.

Trade off Between Military Expenditure and Fixed Capital Formation on Economic Growth: Panel Study of Some SAARC and ASEAN Countries

This paper intends to investigate the relationship between military expenditure and fixed capital formation on economic growth of some SAARC and ASEAN countries including Nepal with balanced yearly panel data of military expenditure (MILEX), gross fixed capital formation (GFCF) and constant GDP as the proxied for the variables of interest over the period of 2001 to 2020. The quantitative strategy is applied to establish the presumed relationship. The paper employs the cross-sectional dependency test, then panel generalized least square (GLS), fully modified ordinary least square (FMOLS), and finally Dumitrescu-Hurlin panel causality approaches. The CD test shows the cross-section dependency among the panel groups. The panel GLS reveals that there is positive relationship between both military expenditure and fixed capital formation on economic growth. However fixed capital formation is more crucial than military expenditure on economic growth. FMOLS suggests that military expenditure and fixed capital formation can promote economic growth but more by fixed capital formation. However, D-H panel causality does not support the view of casual relationship between military expenditure and fixed capital formation on economic growth. But there is unidirectional relationship between economic growth on explanatory variables and there is bidirectional causality between military expenditure and fixed capital formation. The stylized facts suggest to sampled countries that they need to focused on fixed capital formation with maintaining the minimal level of military to accelerate the growth. This paper has an attempt to fill the empirical gaps in Asian countries with Nepal. The updated panel data and comparative studies support to scientific communities cum policy makers of respective countries.

Impact of Education on Economic Growth: Evidence from SAARC Countries

The primary objective of this paper is to examine the influence of education on SAARC members' economic growth to estimate panel data periods from 1990 to2019, the current study employed panel unit root such as ADF Fisher Chi-square, LLC and IP&SW and for long-run and short-run co-integration applied PMG approach, Kao (1999) co-integration, and Dumitrescu-Hurlin Panel Causality test. Primary School Enrollment (PSE), Secondary School Enrollment (SSE), and Tertiary School Enrollment (TSE) have a constructive and significant influence on GDPPC growth in the long term but have a negligible outcome in short run. In all three models, negative noteworthy value of ECM suggests junction from the short term to long-run equilibrium. Moreover, there is a unidirectional causal association running from PSE, SSE, and TSE to GDPPC. This study concluded that the government should place a greater emphasis on education to stimulate economic growth.

Innovation, financial risk and natural resources for sustainable development: Fresh evidence from BRICS economies

The nexus between sustainable development, total natural resource rents (TNRR), technological innovation (ATI) and financial risk index (FRI) has been studied in this research. The objective of this study is to investigate this impact on the BRICS economies while employing the panel data from 1990 to 2020. The study utilized slope heterogeneity, cross-sectional dependency and cross-sectional augmented Im, Pesaran and Shin unit root tests to suggest an accurate method of regression. The study added its findings by utilizing a method of moment quantile regression, and found that TNRR and FRI are negatively related to the sustainable development. At the same time, its impact decreases with the increase in each quarter-based quantiles. Whereas, ATI is positively associated with sustainable development, the results also revealed that its impact decreases with the increase in each quarter-based quantile. Furthermore, the simple quantile regression and Dumitrescu-Hurlin Panel Causality Test were used as a robust method. Where, the simple quantile regression revealed that TNRR and FRI negatively affect sustainable development in BRICS countries while ATI has positive impact on sustainable development. According to this study, the BRICS economies will benefit from less TNRR dependence in two ways: first, as fossil fuel prices decline, money can be redirected to more environmentally friendly activities like renewable energy production, green technological advancement, and renewable energy research and development. Second, when fossil fuel use declines, especially in the industrial sector, growing use of renewable energy sources may lead to lower overall natural resource rents. Third, the BRICS nations' development process will be greatly accelerated and strengthened as a result of the greatest impact of the decrease in FRI.

Causality test among foreign direct investment, trade openness and economic growth: recent evidence from BRICS and MINT countries

This study attempts to find new evidence of causality between foreign direct investment, trade openness, and economic growth for BRICS and MINT countries between 1990-2021 using the Dumitrescu-Hurlin panel causality test. We first check whether there is a cross-sectional dependence between the countries using different cross-sectional dependence tests. After we find out there is cross-sectional dependence, we perform the CIPS unit root test. All variables are stationary at their first differences, so we applied the Dumitrescu-Hurlin panel causality test. There is bi-directional causality between trade openness and economic growth only for MINT countries. For BRICS, we found unidirectional relationships between economic growth and foreign direct investment and trade openness to economic growth. There is a unidirectional relationship from trade openness to foreign direct investment for both country groups.

Economic Globalization in Asean Countries: A Panel Cointegration Analysis

Economic globalization refers to the increasing interdependence of world economies due to the growing scale of cross-border trade of commodities and services, the flow of international capital and the vast and rapid spread of technologies. The process of economic globalization in improving the economy takes time. ASEAN consists of ten countries and each has different behaviors. The development of economic globalization and the speed in increasing economic openness for each ASEAN country is different, hence the need to analyze the relationship between time and across countries using panel data. Therefore, this study aims to analyse further the effect of economic globalization on ASEAN GDP in the short and long term. It uses ICT, economic freedom, and economic openness (trade openness and financial openness) as proxies of economic globalization. The analysis method is a panel cointegration analysis and Dumitrescu-Hurlin panel causality test. The result shows that GDP growth is significantly influenced by ICT, financial openness, and economic freedom in the long term. This study reveals that economic freedom affects GDP growth positively in the long term. Conversely, ICT and financial openness have drawbacks in the long run. Meanwhile, only ICT and trade openness significantly influence GDP growth in the short term. Finally, this study reveals that economic globalization has different impacts on the economy in the short and long term.

Modelling the impacts of climate change on cereal crop production in East Africa: evidence from heterogeneous panel cointegration analysis.

Climate change has become an issue of concern for sustainable agriculture production. East African nations are heavily reliant on the agriculture sector, which accounts for a substantial amount of their gross domestic product (GDP) and employment. Due to climatic fluctuations, the output of the sector became very unpredictable. Hence, this study investigates the effects of climate change on cereal crop production in nine East African nations between 1990 and 2018. The study implemented pooled mean group (PMG) approach to examine the long-run and short-run dynamic impacts of the varying climatic circumstances on the output of cereal crops. The results reveal that rainfall and carbon emissions have favourable and significant long-run effects on cereal crop output, even though their short-run impacts are negligible. Additionally, cultivated land area and rural population have a constructive role in enhancing agricultural output both in the long-run and short-run. However, average temperatures have negative repercussions on cereal crop production in the long-run and short-run, even though the magnitude of sensitivity is greater in the short-run. Dynamic ordinary least squares (DOLS) and fully modified ordinary least squares (FMOLS) validated the robustness of the long-run findings of the PMG technique. Besides, the Dumitrescu-Hurlin panel causality outcomes indicate that cereal crop output has a bidirectional causality with temperature, carbon emissions, and cropped area. The study further demonstrated unidirectional causation from rural population to cereal crop yield. The study recommends that East African policymakers improve the quality of farm inputs, the adoption of climate-resilient farming practices, the development of water retention facilities and the establishment of crop diversification initiatives.

Empirical analysis into the nexus between energy consumption, economic growth, and natural resources in D-8 bloc: evidence from panel causality analysis.

THe importance of the impact of natural resources on economic growth is an important issue with a long history in the energy and environment literature. It is seen that the studies conducted in this field are generally shaped by the "resource curse hypothesis," a hypothesis that highlights the trade-off between economic growth and resource abundance in the growth literature. However, the extant literature have presented inconclusive results. This study aims to examine the direction of causality between capital, energy use, energy imports, exchange rate, natural resources, and per capita income in countries that are rich in natural resources and consist of developing countries (D-8). In this context, first of all, the existence of CD test was determined, and then the stationarity of the variables was determined with the CADF unit root test. Then, whether the slope coefficients of the variables were homogeneous or not, it was decided that they were heterogeneous. Finally, the direction of causality between the variables was examined with the Dumitrescu-Hurlin panel causality test applied to heterogeneous panels. The empirical analysis results show a unidirectional causal relationship from capital to GDP per capita and from GDP per capita to energy use. In addition, while a two-way causality relationship was determined between the exchange rate and GDP per capita, no causal relationship was found between energy imports, natural resources, and per capita income. These results have macroeconomic implications and spillover effects on the energy mix of D-8 economies. In addition, no causal relationship was found between natural resources and GDP per capita in this country group and within the scope of the analysis period. Policy recommendations are highlighted in the conclusion.

The dynamic impact of energy productivity and economic growth on environmental sustainability in South European countries

In the wake of global warming, the world is in an ecological state of disarray. Consequently, governments across the globe are committing to achieving low temperatures with a target of 1.5 °C, of which South European countries play a key role. This study aims to examine the effects of energy productivity (EP), economic growth (GDP), and globalization (GLO) on CO2 emissions of Cyprus, Spain, Portugal, Italy, Greece, and Malta (Southern European countries). The study covers the time from 1990 to 2018. Unlike earlier studies, the current analysis considers EP a significant factor in determining CO2 emissions in Southern European countries. Southern European countries primarily represent a group of emerging economies, but it is relatively ignored in empirical environment literature. This study is the first to reveal a newly second-generation connection among EP, GDP, GLO, and CO2 emissions in the Southern European countries by using the novel method of panel cointegration of Westerlund cointegration, Pedroni cointegration, augmented mean group (AMG), common correlated effects mean group (CCEMG), and followed by Dumitrescu–Hurlin causality tests. The empirical results suggest that the variables' effects are cointegrated, and EP reduces CO2 emissions while GDP, and GLO increase CO2 emissions in the South European countries. Furthermore, findings from the Dumitrescu Hurlin panel causality test suggest that any reductions in EP would have a positive impact on the extent of carbon emissions. On the basis of these empirical findings, this study suggests that policy administrators of the South European countries should consider the energy efficiency impact among the variables in setting their environmental, growth, and energy policies.

Do renewable energy consumption and financial development contribute to environmental quality in MINT nations? Implications for sustainable development

Maintaining a balance between the well-being of the economy and the environment has become a top priority for governments globally. In the contemporary age, world economies, particularly the emerging ones like MINT nations, highlight the need for eco-friendly economic expansion. The MINT nations are thriving economically but are having difficulty reducing their Ecological footprint (EF). This paper aimed to determine if factors such as population density, renewable energy, foreign direct investment, economic growth, and financial development impact ecological footprint in the MINT countries between 1990 and 2018. The study applied ample advanced econometrics such as method of moments quantile regression (MMQR), augmented mean group (AMG) and Common Correlated Effects Mean Group (CCEMG). The overall results indicated that the variables are integrated at the first difference and are cointegrated. The AMG, CCEMG and MMQR results reveal that economic growth deteriorates ecological well-being by promoting the EF while foreign direct investment, population density and renewable energy assists in enhancing it by mitigating the EF in the MINT nations. In addition, financial development does not exert a significant effect on EF. The Dumitrescu Hurlin Panel Causality results show unidirectional causality from economic growth, financial development, population density, and renewable energy to EF. Based on these results policy recommendations are suggested.

Nexus between Renewable Energy, Credit Gap Risk, Financial Development and R&D Expenditure: Panel ARDL Approach

In the study, we investigate the relationships between renewable energy consumption sub-indicators of G-8 countries and financial development, credit gap risk, and R&D expenditure from 1996 to 2018. The relationships among the variables in the study are analyzed by employing the Panel ARDL method and the Dumitrescu–Hurlin panel causality test. The cointegration relationships between the variables have been analyzed using the bounds test approach, and an unrestricted error correction model has been established. Contrary to previous studies in the renewable energy literature, this study employed the variable of credit gap risk. Therefore, we believe that this study will fill the gap in the literature and attract the attention of researchers and policymakers. The results indicate that increases in total demand for renewable energy positively affect the financial development of countries. Moreover, R&D expenditures increase as the demand for hydro energy and solar energy increases. This result indicates that wind power consumption has a short-term impact on R&D expenditure, and such an impact ceases to exist in the long run. According to the empirical research findings, the rise in demand for renewable energy may be a factor mitigating the credit gap risk of countries. In other words, the credit gap risk, which is considered a leading indicator of systemic banking crises, can be mitigated by the rise in the demand for renewable energy.

A regional analysis of the urbanization-energy-economy-emissions nexus in China: based on the environmental Kuznets curve hypothesis

ABSTRACT The process of urbanization has accelerated in the recent decades, bringing with it an enormous impact on climate change. This paper examines the relationships between urbanization, energy consumption, and economic growth on carbon dioxide emissions in regions of China during the 1997–2019 period. Additionally, the environmental Kuznets curve (EKC) hypothesis is also examined. The cross-sectional dependence test indicates that no cross-sectional dependence is present in the panel data, and six unit root tests show that all variables are integrated on the order of one, I(1). Results of all cointegration tests provide evidence for a long-term equilibrium in the selected time series data. The fully modified ordinary least squares (FMOLS) and the augmented mean group (AMG) estimator indicate that the EKC hypothesis is valid in all regions except Western China. Given its abundant renewable resources, this region can vigorously develop renewable energy and energy storage technology. Moreover, energy consumption can lead to emissions increasing, while it is not certain that urbanization leads to emissions decreasing. Clean technologies for energy and intensive development of urban area should be emphasized. Finally, the results of pairwise Dumitrescu-Hurlin (DH) Panel causality test between each pair of variables are complicated and mixed in different regions.

Sağlık Harcamalarının Medikal Ürün İhracatı Üzerindeki Etkisi: E7 Ülkeleri Örneği

It was aimed to analyze the impact of health expenditures on medical product exports in E7 countries (Turkey, China, India, Russia, Indonesia, Brazil and Mexico) in the developing countries group in the paper. In this context, it was first performed the MADF unit root test to test the stationarity of the series in the study covering the period 2000-2017. Then it was performed the Swamy S test to determine the homogeneity and heterogeneity of the series. Finally, it was applied the Dumitrescu-Hurlin Panel causality test to determine the causality relationship between the series. As a result of the findings, it was determined that the series were stationary and heterogeneous in the first difference and that there was a bidirectional causality relationship between the two variables. In other words, both health expenditures affected medical product exports and medical product exports affected health expenditures. In this perspective, when countries' health expenditures increase, medical product exports also increase, and when medical product exports increase, health expenditures also increase.

BRICS-T Ülkelerinde Ekonomik Büyüme Üzerinde Yenilenebilir Enerji Tüketiminin Etkisi

In this study, it is aimed to investigate the effect of renewable energy consumption on economic growth in BRICS countries and Turkey. In this context, panel data analysis in the form of coefficient estimates and causality analysis was applied using annual data for the period 1990-2018. Within the scope of the determinants of economic growth, besides the renewable energy consumption variable which forms the basis of the study, the variables of capital accumulation, population, trade openness, foreign direct investments and non-renewable energy consumption are also used. According to the coefficient estimation results made with the fixed effects model, it has been determined that the increase in renewable energy consumption has negative and significant effects on economic growth. On the other hand, it has been determined that the increase in non-renewable energy consumption has a positive effect. In addition, it is among the findings that the increase in capital accumulation has a positive effect on economic growth and the increase in trade openness has a negative effect. Finally, Dumitrescu-Hurlin (2012) panel causality test results revealed that there is a unidirectional causality relationship from renewable energy consumption to economic growth. Accordingly, it was seen that the growth hypothesis was valid among the variables.

CAUSALİTY RELATİONSHİP BETWEEN INFLATİON AND INCOME DİSTRİBUTİON: A STUDY ON DEVELOPİNG OECD COUNTRİES

Gelir eşitsizliği insanların gündelik hayatını önemli ölçüde sosyo-ekonomik açıdan etkilemektedir. Bu nedenle, hangi faktörlerin gelir dağılımını etkilediğini bilmek, söz konusu eşitsizliği gidermek anlamında önem taşımaktadır. Literatürde gelir dağılımını etkileyen başlıca faktör olarak enflasyon oranları gösterilmektedir. Bu çalışmada gelişmekte olan 8 OECD ülkesinin 2007-2019 dönemini kapsayan yıllık verilerini kullanarak enflasyon ve gelir dağılımı arasındaki nedensellik ilişkisi Dumitrescu-Hurlin panel nedensellik testi ile araştırılmıştır. Sonuç olarak ele alınan ülke grubu için hem enflasyon oranlarından gelir dağılımına doğru hem de gelir dağılımından enflasyon oranlarına doğru herhangi bir nedensellik ilişkisine rastlanmamıştır. Diğer bir ifade ile analize dâhil edilen ülkelerde enflasyon oranları gelir eşitsizliğinin sebebi olmadığı gibi gelir eşitsizliği de enflasyonun sebebi değildir.

Does globalization augment environmental degradation through the channel energy and FDI? Evidence from BRI initiatives

From 2000 through 2020, this study examines the impacts of FDI, economic development, and globalization on E.D. in a sample of Belt and Road Initiative (BRI) nations. Data for the inquiry is gathered using a variety of tests, including the Westerlund cointegration test, the Dynamic seemingly unrelated regression (DSUR) long-run panel estimate approach, and the Dumitrescu-Hurlin panel causality test. Panel unit root tests reveal which variables are hidden where and after initial difference and long-run association documents have been processed using conventional and error-correcting methods. DSUR discovered a positive relationship between long-term energy use and environmental degradation, implying that greater energy consumption and total output would exacerbate the current condition of environmental degradation. Foreign direct investment (FDI), financial expansion, and globalization benefit the global economy more than harm the environment. Aside from the unidirectional impacts of financial development, globalization, and economic expansion on environmental degradation, directional causality studies demonstrate the presence of a feedback hypothesis that helps to explain these causal relationships. This research demonstrates the need for Belt and Road (B.R.) energy measures to improve energy efficiency.

Nexus between globalization, energy consumption and globalization in belt and road countries

This research evaluates the effects of FDI, economic growth, and globalization on E.D. in a sample of Belt and Road Initiative (BRI) countries from 2000 to 2020. Various techniques, including the Westerlund cointegration test, the Dynamic seemingly unrelated regression (DSUR) long-run panel estimate methodology, and the Dumitrescu-Hurlin panel causality test, are used to collect data for the investigation. After initial difference and long-run association documents have been analyzed using conventional and error-correcting techniques, panel unit root tests indicate which variables are hidden where and why. DSUR revealed a positive correlation between long-term energy use and environmental degradation, meaning that increased energy consumption and production will aggravate the existing state of environmental deterioration. Foreign direct investment (FDI), financial growth, and globalization are more beneficial to the global economy than detrimental to the environment. In addition to the unidirectional effects of financial development, globalization, and economic growth on environmental degradation, directional causality investigations reveal the existence of a feedback hypothesis that helps to explain these causal links. This study highlights the need of Belt and Road (B.R.) energy measures to enhance energy efficiency.