Fully Modified Ordinary Least Squares Research Articles

Higher education’s impact on CO2 mitigation: MENA insights with consideration for unemployment, economic growth, and globalization

Higher education’s impact on CO2 mitigation: MENA insights with consideration for unemployment, economic growth, and globalization

Digital Technologies, Environmental Governance and Environmental Performance: Empirical Evidence from China

This research conducts an empirical analysis of the relationship between digital technologies, environmental governance (assessed through environmental taxes), and China's environmental performance from 1995 to 2020. Additionally, within the framework of the STIRPAT model, the impacts of GDP and urbanization on ecological footprints are examined. This study is distinguished by its innovative approach to evaluating environmental performance via ecological footprints and the application of the Autoregressive Distributed Lag (ARDL) model along with Dynamic Ordinary Least Squares (DOLS), Canonical Cointegration Regression (CCR), and Fully Modified Ordinary Least Squares (FMOLS) as long-run estimators, methodologies not previously applied to this context in China. The findings indicate that digital technologies and environmental taxes contribute to a reduction in ecological footprints, while GDP and urbanization have an adverse effect, increasing ecological footprints. Post-estimation diagnostics confirm the absence of serial correlation and heteroskedasticity, and affirm the normal distribution of the disturbance terms. For a robustness check, the study further employs DOLS, FMOLS, and CCR methods, which corroborate the initial results regarding the beneficial impact of digital technologies and environmental governance on ecological footprints. Based on these findings, the study advises the Chinese government and policymakers to enact more effective environmental tax policies and leverage digital technologies to enhance environmental sustainability in China.

Does Digitalization Lead to Environmental Sustainability and Energy Efficiency in China?

In the past 20 years, there has been an increased focus on the connection between investments in  digitalization, environment, and economic growth, however the effects of digitalization on energy efficiency  in developing nations have received little attention in empirical researches. therefore, the goal of current research is to study the effect of digitalization on environmental sustainability and energy efficiency in China over 1995-2020. For this purpose, two separate models are formulated with energy efficiency and CO2 emissions as dependent variables and digitalization (measured by ICT technologies) as the explanatory variable. The study applies three time series approaches namely, Dynamic Ordinary Least Square (DOLS), Fully Modified Ordinary Least Square (FMOLS), and Canonical Cointegration Regression (CCR) to empirically estimate the study objectives. The study findings show that ICT plays positive role in promoting energy efficiency and environmental sustainability as coefficient of ICT is negative in both models. It was concluded from the findings that ICT sector has positive implications in terms of energy and environment in China. The study recommends the Chinese government and policy makers to pay attention and device effective policies for promotion of ICT sector in the country.

Trade policy and environmental sustainability in Africa: An empirical analysis

AbstractThis study investigates whether trade policy instruments—tariffs—strengthen or worsen African environmental sustainability. To drive out the objectives of the study, fully modified ordinary least square (FMOLS), dynamic OLS (DOLS), augmented mean group (AMG), method of moment quantile regression (MMQR) and Dumitrescu–Hurlin panel causality approaches are used to analyse the effect of tariff in addition to other control variables on carbon and ecological footprints as measured of environmental sustainability from 2001 to 2020. The results from the MMQR reveal that tariffs have a significant positive effect on carbon footprints in the 0.15 quantile, while the effect becomes insignificant between 0.25 and 0.5 quantiles. However, at the upper quantiles level (0.75–0.95), the impact of the tariff on carbon footprint is negative and significant, with increasing coefficients. Furthermore, tariffs significantly positively affect lower and middle quantiles' ecological footprints (0.15–0.5). However, the effect turns negative at the upper quantiles (0.9 and 0.95), suggesting that tariff reduces ecological footprint at these levels. In addition, the long‐run estimates (FMOLS, DOLS and AMG) also support the upper quantile estimates of MMQR. A one‐way causality between tariffs, carbon and ecological footprint was found. These findings reveal that tariffs do not create market inefficiency in Africa. This study recommends that tariffs as a trade policy instrument could be used to strengthen Africa's environmental quality. The government can use the tariff revenue to subsidize cleaner production and consumption and move the economy from a traditional energy source to renewable energy.

The Effects of Education and Financial Development on Energy Poverty Reduction in Latin America

Using data from 14 Latin American countries over the period 2000–2019, this study examines the influence of education and financial development on energy poverty reduction. Evidence from different estimation approaches, such as dynamic ordinary least squares (DOLS), fully modified ordinary least squares (FMOLS), and canonical correlation regression (CCR), showed that education substantially decreases energy poverty reduction in Latin America. The results also indicated that the nexus between financial development and energy poverty reduction is positively and significantly associated. Conversely, the linkage between education, financial development, and energy poverty reduction considerably varies among Latin American countries. We suggest that policies stimulating financial development and education will be pivotal in addressing energy poverty reduction in Latin America.

Enhancing Environmental Quality: Investigating the Impact of Hydropower Energy Consumption on CO2 Emissions in Indonesia

Achieving sustainable environmental quality has become a critical global issue, necessitating the reduction of carbon dioxide (CO2) emissions and greenhouse gas (GHG) emissions to mitigate environmental pollution. Hydropower energy has the potential to play a significant role in this effort by providing a clean, renewable energy source that can help reduce reliance on fossil fuels and decrease CO2 emissions. This study examines the dynamic impact of hydropower energy consumption, economic growth, capital, and labor on Indonesia's CO2 emissions from 1990 to 2020. Applying the Autoregressive Distributed Lag (ARDL) method, the findings demonstrate that hydropower energy consumption has a negative effect on CO2 emissions in both the short and long term, indicating that increasing hydropower energy consumption leads to a reduction in CO2 emissions. Conversely, labor exhibits a positive influence on CO2 emissions in both the short and long term, suggesting that a rise in labor contributes to higher levels of CO2 emissions in Indonesia. Furthermore, the Granger causality analysis reveals a bidirectional relationship between CO2 emissions and hydropower energy consumption. The robustness of ARDL results is confirmed through additional tests using Fully-Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), and Canonical Cointegrating Regressions (CCR) methods. The findings underscore the importance of promoting sustainable hydropower energy for effective environmental management in Indonesia. Policymakers should prioritize investments in sustainable hydropower infrastructure, encourage the adoption of energy-efficient technologies, and develop a skilled workforce to mitigate the environmental impact of increased labor force participation.

Examining the dynamic impact of carbon emissions, renewable energy and economic growth on healthcare expenditure in Asian countries

This study aims to examine the impact of renewable energy, carbon emissions, and economic growth on healthcare spending in 36 Asian countries during 2000–2019. Fully Modified Ordinary Least Square (FMOLS) and Dynamic Ordinary Least Square (DOLS) models have been applied to the panel data for 36 Asian countries. The study's findings show that CO2 emissions in Asia increased due to public and private health spending, with the commercial health sector having a larger negative influence on CO2 emissions than the public sector. According to FMOLS and DOLS findings, carbon emissions and GDP are positively related to health spending, indicating that high economic growth through energy-intensive production processes leads to increased carbon emissions, but on the contrary, renewable energy consumption has decreased healthcare expenditure. This study advocates new policies to reduce carbon emissions and hospitalisation without jeopardising national economic growth. In order to achieve sustainable health services and an environmentally friendly future in Asia, health administrators must raise state and private healthcare spending while implementing an effective cost-service and energy-efficient management plan.

Unlocking Sustainable Futures: Exploring Multidimensional Poverty in Belt & Road Initiative Countries Through Forest Plantation Perspectives

ABSTRACT Forest plantation initiatives hold significant prospects to impact various dimensions of poverty, highlighting the crucial need to understand this link in the context of sustainable development. In the 1990s, countries participating in the Belt and Road Initiative (BRI) witnessed a notable progress in forest plantations. While earlier research primarily focused on assessing the effects of these plantations on specific facets of rural poverty, this study aims to delve into the broader macroeconomic implications of forest plantations on the Multidimensional Poverty Index (MPI). From 2010 to 2020, the study used the Fully Modified Ordinary Least Square (FMOLS) and Driscoll-Kraay estimators to scrutinize the influence of forest plantations on the MPI. The research findings unveil a significant negative effect of various factors, including the rule of law (RL), agricultural expansion (AGR), and forest plantation (FP), on the MPI in BRI countries. Interestingly, political stability and the control of corruption exhibit a positive effect on the MPI. Furthermore, causality tests indicate a unidirectional link between MPI and political stability and a one-way connection between forest plantations and MPI. Suggestions for BRI countries involve promoting sustainable forest plantation initiatives through strategic encouragement and investment while highlighting responsible management practices. Also, it is advised to implement policies that encourage political stability and strengthen governance, thereby developing an enabling environment for effective poverty reduction.

Does the digitalization crusade a way out of poverty and income inequality? Evidence from developing countries

PurposeThis study examines the effect of digitalization on poverty and income inequality in developing countries. The study answers the question of whether digitalization is a way for developing countries to get out of poverty and income inequality.Design/methodology/approachThe study uses data from 17 developing countries with data from 2005 to 2021. The study employs fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS), with an augmented mean group (AMG) for robustness. Digitalization, as the variable of interest, is proxied by the digitalization index (DI), constructed using principal component analysis (PCA). The dependent variables are poverty and income inequality, which are used in different models.FindingsThe evidence indicates that digitalization decreases poverty and income inequality in developing countries. These findings are justified when we use the AMG estimator, but the strength of the coefficients and significance levels are higher in the FMOLS and DOLS estimators. The results of the control variables also show that human development (LHDI), CO2 emissions and foreign direct investment (FDI) have decreasing effects on poverty and income inequality. Thus, digitalization is a good option for developing countries to get out of poverty and income inequality to achieve sustainable development goals (1&10).Originality/valueThis study provides rigorous empirical evidence on the effect of digitalization on poverty and income inequality in developing countries. Unlike the previous studies on developing countries, this study used a DI to proxy digitalization. In addition, the authors use FMOLS and DOLS estimators, with an AMG estimator for robustness, to provide long-run coefficients.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-08-2023-0586

The dynamic impact of non-renewable and renewable energy on carbon dioxide emissions and ecological footprint in Indonesia

The global trend of environmental degradation, marked by escalating carbon dioxide (CO2) emissions and expanding ecological footprints, poses a significant risk to the planet and leads to global warming. This decline in the environment is primarily attributed to the extensive use of non-renewable energy sources and substantial economic activities. This study investigates the dynamic impact of non-renewable energy (coal, gas, and oil), renewable energy, economic growth, and capital formation on CO2 emissions and the ecological footprint in Indonesia spanning from 1965–2022. Employing Fully Modified Ordinary Least Squares (FMOLS), Ordinary Least Squares (DOLS), and a robustness test with Canonical Cointegrating Regression (CCR) techniques, we seek to establish long-term associations among the studied variables. Preliminary findings, supported by our primary models, reveal that every increase in coal and gas directly results in higher CO2 emissions but does not affect ecological footprints. Conversely, every increase in oil affects the rise of ecological footprints but not CO2 emissions. Meanwhile, the rise in renewable energy will reduce both CO2 emissions and ecological footprints, consequently enhancing Indonesia's environmental quality. Furthermore, increasing economic growth will increase both CO2 emissions and ecological footprint, while the rise in capital formation reduces the ecological footprint. The Granger causality test showed unidirectional causality from CO2 emissions to renewable energy and also revealed bidirectional causality between ecological footprint and renewable energy. This study clarifies the patterns of energy emissions in Indonesia and provides policymakers with recommendations for maintaining environmental sustainability, including investing in renewable energy use and transitioning away from non-renewable energy, given the pressing climate challenges and the goal of achieving carbon neutrality.

Economic Globalization and Human Development in Bangladesh

Economic globalization has garnered significant scholarly interest due to its potential to contribute to social stability and economic development. In recent years, there has been a growing emphasis on human development indicators in the context of Bangladesh's economic progress. This research examines the impact of economic globalization on the HDI of Bangladesh, focusing on the indicators of foreign direct investment (FDI), foreign assistance, and personal remittance inflow. Using an autoregressive distributed lag (ARDL) model and fully modified ordinary least squares (FMOLS) estimates, the research finds that not all globalizing variables have a linear effect on Bangladesh's HDI. The empirical results also suggest that the impact of economic globalization on HDI varies across the different dimensions of human development. Short-term association between foreign assistance is rather high. There is a long-term, positive correlation between FDI and foreign assistance. The research offers some policy recommendations to address the challenges of economic globalization and human development in Bangladesh. These include: Investing in education and healthcare to improve the skills and productivity of the workforce, implementing social safety nets to protect vulnerable groups from the negative effects of globalization, ensuring equitable distribution of resources to ensure that everyone benefits from the benefits of globalization, promoting inclusive growth by supporting small and medium-sized enterprises and creating jobs in the informal sector. The research concludes that a balanced approach to economic globalization is essential to maximize the benefits for human development in Bangladesh.

The dynamics of green innovation, environmental policy and energy structure for environmental sustainability; Evidence from AfCFTA countries

Environmental pollution caused by many factors including energy use has been a major problem around the world. A sustainable energy structure can help improve environmental sustainability. The roles of green innovation and environmental policies in determining an effective energy structure and achieving environmental sustainability have gained attention in recent research, but there are gaps to fill. Given the rapid development and unification of Africa to boost economies, this article aims to establish whether or not green innovation and environmental policies have influenced energy structure and environmental sustainability. Thirty-one (31) countries out of the 55 African Continental Free Trade Area (AfCFTA) countries were used in the analysis. The study adopted the Fully modified ordinary least squares (FMOLS) and the Dynamic ordinary least squares (DOLS) models in its analysis. Major empirical results revealed that a 1% increase in green innovations reduces ecological footprints by 0.7% and 1% (DOLS and FMOLS). Also, a percentage increase in environmental policies can reduce ecological footprints by 10.12% (DOLS) and 21.87% (FMOLS). A 1% rise in renewable energy improves their environmental sustainability by 3.26% (DOLS) and 1.82% (FMOLS). A 1% consumption of non-renewable energy reduces environmental sustainability by 4.59% (DOLS) and 1.55% (FMOLS). These results provide insights into the importance of green innovation, environmental policy, and renewable energy in improving environmental sustainability. Stringent measures and policies to boost green investment, sustainable energies, and environmental sustainability are necessary for the region.

Assessing Energy Consumption and Economic Growth Interrelations in Asia-Pacific: A Multivariate Approach with Panel FMOLS and Bootstrap Granger Causality Tests

This study investigates the cointegration and causal relationship between energy consumption and economic growth using data from 16 Asian and Pacific countries from 1970 to 2010. The expanded production function is used in this investigation; this function considers not only labor but also financial resources. This study investigates whether or not a rise in energy demand is associated with a healthy economy. Human capital, in addition to material and labor resources, is taken into account by this operation. One of the first studies to adopt a multivariate method and add human capital was undertaken on the energy-growth nexus. Using the panel unit root and cointegration tests, this study confirms the existence of a long-run cointegrating connection between these variables. These studies recognize the presence of cross-sectional interdependence, according to specific reports. The significance of considering the interconnection of various countries is confirmed by comparing estimates from panel heterogeneous fully modified ordinary least squares (FMOLS) models with those from unceasingly efficient and fully modified models. Nonetheless, the bootstrap panel Granger causality test findings demonstrate that economic growth is a causal factor in rising energy consumption in the region, indicating that the relationship is not constant across countries.

Exploring the dynamic capability of green technology innovation for achieving sustainable development: an empirical insight from China

ABSTRACT During the past several decades, the world has been putting strong emphasis on the role of environmental technology innovation which can reduce environmental degradation and promote sustainable development. This research sheds light on the impact of green technology or eco innovation on sustainable development for China. Additionally, the effects of other variables such as governance, information and communication technology, trade uncertainty and urban population are also analysed. The study employs Fully modified ordinary least squares (FMOLS) and Canonical Cointegration Regression (CCR) as the long run tests and Breitung and Candelon Spectral Granger-Causality as the time varying granger causality test. The results suggest that green innovation promotes sustainable development in the long run. The roles of governance quality and urbanization are also found to be positive while the role of ICT is found to be insignificant yet negative. The role of trade uncertainty is positive yet insignificant. Based on these results, the study calls for the private and public organizations and industries to invest in eco innovation. Different incentives from the government can also encourage private industries to invest in green innovation technologies.

Does public debt moderate government spending – informal economy nexus? Evidence from the Asian countries

PurposeThe purpose of this study is to explore the relationship between government spending, public debt and the informal economy. In addition, this paper investigates the moderating role of public debt in government spending and the informal economy nexus.Design/methodology/approachBy utilizing a data set spanning from 2000 to 2017 of 32 Asian economies, the study has employed the dynamic ordinary least squares (DOLS) and fully modified ordinary least squares (FMOLS). The study is also extended to consider the marginal effects of government spending on the informal economy at different degrees of public debt.FindingsThe results indicate that an increase in government spending and public debt leads to an expansion of the informal economy in the region. Interestingly, the positive effect of government spending on the informal economy will increase with a rise in public debt.Originality/valueThis study stresses the role of government spending and public debt on the informal economy in Asian nations. To the best of the authors' knowledge, this study pioneers to explore the moderating effect of public debt in the public spending-informal economy nexus.

Domestic Debt and Exchange Rate Stability in Nigeria (1980 - 2021)

This study investigated the relationship between domestic debt and exchange rate stability in Nigeria using data for the period 1981 to 2021. Domestic debt was disaggregated into treasury bills (TBILLS), treasury bonds (TBONDS) and Federal Government bonds (FGNB) as well as other sources of debt (OTHERS). Exchange rate stability was proxied by Nigerian naira/US dollar exchange rate. Data was collected from the Central Bank of Nigeria Statistical Bulletin 2021 and analyzed using a combination of Johansen cointegration, granger causality and co- integrating regression adopting the fully modified ordinary least square (FMOLS) technique. The findings showed that there is no long-run relationship between domestic debt and exchange rate stability. Also, TBILLS, TBONDS and OTHERS positively and significantly affect exchange stability in the short run at 5% level of significance while FGNB has a positive but insignificant short run relationship with exchange rate stability at 5% level of significance. It was also revealed that domestic debt variables (TBILLS, TBONDS and FGNB as well as OTHERS), does not granger cause exchange rate stability at the 5% level of significance. The study concluded that domestic debt significantly affects exchange rate stability in the short run but domestic debt has no long-run relationship with exchange rate stability, and there is no causal relationship between domestic debt and exchange rate stability. The study recommended among others that domestic debt variables are actually contracted using short term instruments. Thus, they should be used to maximally ensure short- and medium-term stability in exchanges.

Exploring correlations between economic indicators with natural and societal factors based on linear regression model

Existing research on the determinants of a nations economic development has predominantly centered on individual factors, including energy, land resources, education, taxes, employment, and healthcare. Regrettably, there is a paucity of studies that holistically examine these factors collectively and assess their respective contributions to economic development. Therefore, the primary objective of this study is to investigate the interrelationships between economic indicators and various natural and societal factors. The article firstly uses the Pearsons correlation coefficient to filter out a portion of the higher degree of correlation from factors that may have an impact on the countrys economic development for further analysis. For the selected factors, using two linear regression models: Ordinary Least Square (OLS) method for preliminary modeling for the extent of affects between each factors and economy; and Fully Modified Ordinary Least Squares (FMOLS) method, as an optimization model, further eliminating the less influential variables. After obtaining the final impact model of the linear correlation, the data is screened based on the variables within the model. A portion of the selected data is used as a training set for training the model and the remaining data is used as a test set for testing the performance. The results of the study show that factors including land area, army size, CO2 emissions, population, minimum wage, would have varying degrees of integrated impact on the economic development of the country.

Are Trade Openness Drivers Relevant to Carbon Dioxide Emission? A Study of Emerging Economies

This research is focused on an in-depth analysis of the trade drivers that influence trade openness and their impact on carbon dioxide emissions, with a concentrated examination of emerging economies from 1995 to 2020. This examination is contextualized within the scope of various trade and environmental theoretical frameworks. In our analysis, we employed a range of advanced panel regression methods, including stepwise regression for model selection, as well as Fully Modified Ordinary Least Squares (FMOLS), Panel Ordinary Least Squares (Panel OLS), and Fixed Effects Model (FEM). The long-term patterns were evaluated using Johansen co-integration tests. Additionally, the study delves into the causal links between carbon dioxide emissions and the key drivers of trade, employing Granger causality tests for this purpose. Our findings disclose a complex web of relationships, both in the short and long term, between trade openness and carbon dioxide emissions, influenced by several key factors: (i) net inflows of foreign direct investment, (ii) trade reserves, (iii) per capita income, (iv) exchange rates, and (v) gross national savings.

The Relationship between Electricity Consumption and Economic Growth in BRICS Countries

This study analyzed the Gross Domestic Product (GDP) determinants in Brazil, Russia, India, China, and South Africa (BRICS). The method used in this study is a Fully Modified Ordinary Least Square (FMOLS) panel that can overcome the problem of non-stationary panels and the effect of heterogeneity between countries. The analysis range of this study is from 1992 to 2021, with three independent variables, namely electrical energy consumption, labor force, and gross fixed capital formation (GFCF) or investment. The results showed a significant favorable influence on energy consumption, labor force, and investment in GDP in BRICS countries from 1992-2021. This research resulted in a review of one of the policy recommendations to improve the economy in BRICS countries.

European Tourism Sector Development in the Context of Energy Uncertainty

The research is a novel to study the impact of energy uncertainty on international tourism receipt in 11 European countries namely Belgium, Croatia, Denmark, France, Germany, Greece, Ireland, Italy, Netherlands, Spain and Sweden due to availability of energy uncertainty index data recently developed by Dang et al. (2023). As econometric tool, we employ a Fully Modified Ordinary Least Squares (FMOLS) framework and include obtained long-run relations in a panel Vector Error Correction model (VECM). The findings suggest that 1% increase in energy uncertainty leads to 0.08% decrease in international tourism receipt in Europe. Moreover, international tourism receipt reaches the equilibrium with the adjustment speed of 23% annually. Regarding the effect of control variables, economic development has a negative relation whereas CO2 emissions and institutional quality have a positive association with international tourism receipt. As a policy implication, enhancing renewable energy is suggested to cope with energy uncertainty consequences that might affect tourism development.