Growth In G7 Countries Research Articles

Total, renewable and non-renewable energy consumption and economic growth: Revisiting the issue with an asymmetric point of view

Previous literature assumes a symmetric linkage between energy consumption and economic growth. However, a variation on energy consumption does not necessarily have the same impact on economic growth, or vice-versa. Considering this possible asymmetry between the variables, this study aims to examine the long- and short-run relationships between total, renewable and non-renewable energy consumption and economic growth in G7 countries over the period 1980–2014 by using the nonlinear autoregressive distributed lag (NARDL) and asymmetric causality approaches. Findings indicate that production function matters in determining the cointegration among the variables. The results of asymmetric and symmetric relationships and causality analyses, on the other hand, are found to be very volatile across production functions and energy proxies. When the energy consumption is measured by total energy use, however, the results provide strong support of an asymmetric relationship between energy consumption and economic growth in the long-run.

Do cross-border acquisitions create more shareholder value than domestic deals for firms in a mature economy? The Japanese case

In this paper, we analyse the shareholder wealth effect in domestic and cross-border acquisitions involving Japanese acquiring firms over the period from 2000 to 2010. The results of our study reveal that cross-border acquisitions create larger returns for the acquirers’ shareholders than domestic deals. Furthermore, although acquisitions of firms in G7 countries create larger value than other acquisitions in the period between 2000 and 2003, in the period between 2008 and 2010, which corresponds to a period of slow economic growth in G7 countries after the US financial crisis, acquisitions involving target firms in non-G7 countries created greater wealth gains for shareholders than deals that targeted firms in G7 countries. Our results highlight the growing importance of M&A target firms in growing markets for mature firms in advanced and slow-growth economies.

CO2emissions and militarization in G7 countries: panel cointegration and trivariate causality approaches

AbstractThis paper aims to test the relation among militarization, CO2emissions, economic growth and energy consumption in G7 countries from 1985 to 2015 via panel methods. Long- and short-run coefficients and the causal relationship between the variables are important for G7 countries' energy policies and strategy. Cointegration among CO2emissions, militarization, energy consumption and economic growth was determined by using panel Johansen and panel autoregressive distributed lag (PARDL) methods. Further, the panel trivariate causality test was applied and unidirectional causalities from militarization to CO2emissions and from energy consumption to CO2emissions were found. The evidence of bidirectional causality between per capita GDP and militarization, between per capita GDP and energy consumption, and between energy consumption and militarization was determined. The paper recommends that environmental and energy policies must recognize the differences in the relation between militarization, energy consumption and economic growth in order to maintain sustainable economic growth in the G7 countries.

Research output and economic growth in G7 countries: new evidence from asymmetric panel causality testing

ABSTRACTRecent studies have shown increasing interest on the relationship between research output and economic growth. The study of such a relationship is not only of theoretical interest, but it can also influence specific policies to improve the quality, and probably the quantity of research output. This article has studied this relationship in G7 countries using the asymmetric panel causality test of Hatemi-J (2011). Our results show that only the UK shows a causal relationship from the output of research to real GDP. However, when the signs of variations are taken into account, there is an asymmetric causality running from negative research output shocks to negative real GDP shocks.

The causal relationship between natural gas consumption and economic growth: evidence from the G7 countries

This article re-examines the nature of the causality between natural gas consumption and economic growth in G7 countries over the period from 1965 to 2011. We employ the Granger causality procedure proposed by Emirmahmutoglu and Kose (2011) which takes into account cross-sectional dependency and heterogeneity across countries. Our overall empirical results support the neutrality hypothesis for the panel while the individual country results confirm the same result with the exception of the case of UK, where the conservation hypothesis is confirmed, showing that GDP causes natural gas consumption in the country. These results make policies that promote the consumption of natural gas risk-free with regard to their effects to the economic growth and development levels.

Renewable and non-renewable energy consumption and economic growth relationship revisited: Evidence from G7 countries

The aim of this study is to investigate the long-run and causal relationships between renewable and non-renewable energy consumption and economic growth by using classical and augmented production functions, and making a comparison between renewable and non-renewable energy sources in order to determine which type of energy consumption is more important for economic growth in G7 countries for 1980–2009 period. Autoregressive Distributed Lag approach to cointegration was employed for this purpose. Also, causality among energy consumption and economic growth was investigated by employing a recently developed causality test by Hatemi-J (2012). The long-run estimates showed that either renewable or non-renewable energy consumption matters for economic growth and augmented production function is more effective on explaining the considered relationship. On the other hand, although bidirectional causality is found for all countries in case of classical production function, mixed results are found for each country when the production function is augmented.

Do Cross-Border Acquisitions Create More Shareholder Value than Domestic Deals for Firms in a Mature Economy? The Japanese Case

We empirically analyze the characteristic differences and shareholder wealth effect in domestic and cross-border acquisitions involving Japanese acquiring firms over the period from 2000 to 2010. During this period, the Japanese economy had reached a mature economic state, and there was a strong trend for Japanese firms to shift production to foreign sites, and also to target foreign markets to enhance growth. The results of our study reveal that cross-border acquisitions create larger returns for the acquirers’ shareholders than domestic deals. Furthermore, in the last three years of our analysis period, which corresponds to the period of slow economic growth in G7 countries due to the economic crisis in the US and EU, acquisitions involving target firms in emerging markets created greater wealth gains for shareholders than deals targeted firms in G7 countries. This suggests that within the context of a mature economy, cross-border acquisitions can be considered a prime investment option for value creation. The importance of M&A in emerging markets is increasing for Japan and other advanced industrial economics.

The Causal Relationship between Patent Growth and Growth of GDP with Quarterly Data in the G7 Countries: Cointegration, ARDL and Error Correction Models

This empirical study investigates the dynamic link between patent growth and GDP growth in G7 economies. ARDL model showed that there exist positive relationship in long run between quarterly growth of patents and quarterly GDP growth. The error correction term suggests that 20,6 percent of the adjustment back to long run equilibrium of industrial production in G7 countries is corrected by 20,6% a year, following a shock like the one in 1974 , which in our study is controlled by a dummy variable D74. In the short run however at one or two lags there exist negative relationship between quarterly patents growth and quarterly growth of GDP. Johansen’s procedure for cointegration showed that long run multipliers are positive between the patent growth and GDP growth in G7 economies. Granger causality test showed that patent growth Granger cause GDP growth in G7 countries. Unrestricted VAR showed that there exists positive relationship between patent growth and GDP growth at two or three lags.