Growth In Lebanon Research Articles

The Effect of Economic Development on Urbanization in Lebanon: An Empirical Study

The paper aims to study the evolution of urban growth in Lebanon as a developing country with respect to its economic development. Also, the dynamics of this relationship are to be explored and shed some light on the effect, if any, of economic development on Urbanization in Lebanon. Therefore, the study identifies through literature how economic development impacts urbanization. Finally, this paper advances the research on the subject topic in Lebanon beyond the restrictions and limitations of previous literature through empirical results. The study focuses on previous literature regarding the relation of economic development and urbanization. The study uses time-series OLS multi-variate egression anaylsis in the case of Lebanon from the year 1988-2018.GDP per capita, school enrolment and life expectancy were used tocapture the urban population growth, while ores and metals exports, manufacturing value added and agricultural value added were used as conrol variables. The results indicate a positive correlation and at least one co integrating equation between the variables. The results showed that two variables are significant with urban population at regional level supporting the expected hypothesis (GDP and school enrolment) and all other variables did not show any significant relation with urbanization in Lebanon. This study might be of interest providing insights on the relationship between urbanization and economic development specially for further studies in the field of urbanization. The study believes to contribute positively to understanding of urbanization and the creation to an innovative era of economic growth, luxury and improved resource allocation.

ENVISIONING FUTURE DIRECTIONS IN PUBLIC RESOURCES

During the civil war (1975-1992), Lebanon faced total destruction that produced a negative impact on the urban growth of the Lebanese cities. The war generated some paralyzes that still produce adverse effects on the Lebanese people. Public infrastructure, public spaces, and the national public heritage, which are fundamental resources of the Lebanese society, currently are still not properly safeguard and managed by the local government. Understanding and enhancing the values of the Lebanese public resources is an indispensable tool for the development of the contemporary Lebanese society that can influence the future expansion, the revitalization and the shaping of new contemporary urban planning approach. How can we envision the future directions of the Lebanese public resources to influence the development of the Lebanese country while advocating for sustainable cities? This research tries to identify the main values, trends, influences, and ideologies linked with the public values, that should be considered and adopted to shape the development of contemporary growth in Lebanon.

CLIMATE CHANGE AND ECONOMIC GROWTH IN LEBANON

This paper examined the relation between the climate change and economic growth in Lebanon. Time series analysis for the period 1990-2013 based on ordinary least squares (OLS) estimation technique were used. Changes in annual rainfall, carbon dioxide emission, temperature changes, and forest areas were used to capture climate change, while gross fixed capital formation, labor force and urbanization were used as control variables. The results indicate that two climate variables have negative impact (carbon dioxide emissions and forest areas) and two positive impact on the Lebanese economic growth (rainfalls and temperature changes). However, only rainfalls variable is statistically significant. All the control variables were statistically significant have the theoretical expected signs. These results imply that Lebanese policy makers should implement strategies to minimize the effect of carbon dioxide emissions and forest depletion. Based on this, a specialized national council should be initiated to put series studies to deal with all climate change issues. After testing the stationarity levels, the co-integration tests confirm the existence of co-integrating relationship between the variables. Keywords: Climate Change, Economic Growth, Ordinary Least Squares, co-integration tests. JEL Classifications: Q20, Q43, Q54, O44 DOI: https://doi.org/10.32479/ijeep.7806

Monetary Policy and Economic Growth in Lebanon

Abstract The central bank of Lebanon adopted exchange rate targeting in 1994 and it has exploited several instruments (particularly interest rate) since then to stimulate foreign financial inflows. This study aims at testing the impact of this strategy on economic performance and welfare in both the short- and long-run. In this regard, we exploit monthly data covering the period January 2002-June 2017 and implement cointegration analysis and VEC model. The empirical results suggest that monetary tools exploited by the central bank of Lebanon depress economic growth in the long-run. Moreover, despite their importance for external balance, financial inflows may hinder economic activity in both short- and long-run. On the other hand, monetary policy transmission channels through bank credit and capital play a constructive role for GDP growth.

Étude de causalité entre la consommation d’électricité et la croissance économique au Liban

This article studies the causal relationship between electricity consumption and economic growth in Lebanon over the period 1971-2012. This relationship is examined using cointegration and Granger causality tests. The results of the estimates indicate that economic growth and electricity consumption in Lebanon are not cointegrated and that there is no causal relationship between variables according to Granger’s tests. However, a unidirectional causality is detected in the post-war period (1990-2012), ranging from electricity consumption to economic growth. The results of this research prove strongly, and with an econometric approach, that electricity consumption was the fundamental sourceof economic growth after the civil war in Lebanon, which explains the appearance of this causal relationship. In addition, the most relevant implication of this study is that mitigation of current power generation shortages should be a national priority, given its potential positive effect on the Lebanese economy.

Assessing the Role of Remittances and Financial Deepening in Growth: The Experience of Lebanon

We investigate the relationship between remittances, financial deepening and the growth of the Lebanese economy using quarterly data from 1993 to 2011. Our results provide strong support for the theoretical contention that remittances and financial development share a robust long-run relationship with growth in Lebanon. However, the results indicate that short-run effects on growth volatility are statistically insignificant from financial development but strongly significant from remittances. These results extend recent findings on the financial development, remittances and growth nexus and imply that benefits expected from remittances for addressing growth volatility in Lebanon materialize more than those associated with financial development.

The Determinants of Credit Growth in Lebanon

This study aims at defining the credit growth determinants in Lebanon by exploiting a panel data of 34 commercial banks over the period 2000-2015. The empirical results show that deposit growth, GDP growth, inflation, and money supply, all boost bank credit to the resident private sector. Conversely, credit risk, lending interest rate, T-bill rate, public borrowing, and remittance inflows decrease loan growth. We extend our analysis and detect the impact of one year lag of all exploited variables in order to find out if they have a delayed impact on credit growth, where we find several different results. For instance, lag LLP recorded the opposite effect of LLP; ROA does not affect credit growth, whereas its lag lowers credit growth; the impact of a change in money supply amplifies considerably after one year; and finally, the negative impact of remittances fades away after one year.

The electricity consumption, employment and growth nexus: evidence fromLebanon

AbstractThe causal relationship between electricity consumption and growth inLebanon is examined using aggregate employment in a trivariate setting for the period 1980–2011. We test the main hypothesis that electricity is an input in the aggregate production function. Our results reject the input hypothesis inLebanon in both the short run and long run. However, electricity is found to be a by‐product only when we employ a stronger test forGranger causality. These results seem to suggest that electricity conservation strategies should be easier to implement without additional sacrifices to growth inLebanon. By contrast, we find evidence of a long‐run relationship between employment and growth. We offer some specific detailed strategy toLebanon that provides support for carrying out policies that increase the level of labour‐promoting investments in the country.

Tourism and growth in Lebanon: new evidence from bootstrap simulation and rolling causality approaches

A multivariate model incorporating tourist arrivals, real output, and the real exchange rate is estimated to study the causal relationship between tourism and economic growth in Lebanon. This study covers the monthly data from January 1995 to December 2011. The Granger causality between the variables of interest is determined using the TYDL bootstrap causality approach. Then, we apply the Granger causality with rolling regression technique to evaluate the stability of the tourism-led growth hypothesis in Lebanon. We find that the tourism-led growth hypothesis is supported empirically in the case of the Lebanese economy. Meanwhile, we also find some evidences of uni-directional Granger causality running from the real exchange rate to tourism and economic growth in Lebanon. Therefore, tourism can be used a policy instrument to stimulate long-term economic growth in Lebanon.

The tourism led growth hypothesis: the Lebanese case

Purpose– The purpose of this paper is to study the direction of the causality between tourism development and economic growth in Lebanon between 1995 and 2013, after taking into consideration terrorist incidents and their intensities. These are considered as exogenous shocks that affect tourism development and economic growth instantaneously and with a lag.Design/methodology/approach– To reach the objectives, the authors estimate a vector auto regressive model with exogenous variables, applying a series of unit root tests with and without structural breaks and the Granger causality test.Findings– The findings suggest a positive unidirectional causality running from tourism development to economic growth in the short run. Thus, the authors find evidence for the tourism-led growth hypothesis (TLGH) in Lebanon despite the exposure of the country to frequent terrorist incidents. The impulse response functions reveal that tourism development (economic growth) responds positively to a positive shock to economic growth (tourism development).Practical implications– The findings call for Lebanese policy makers aiming at promoting growth to design policies that encourage tourism, such as implementing tourism marketing policies and building the needed tourism infrastructure. Such policies will have positive but transitory effects on economic growth. The findings may also be useful for regional representatives of intergovernmental organizations and the offices of statistics of United Nations World Tourism Organization and the World Bank to better understand the tourism industry in Lebanon and similar countries suffering from instabilities.Originality/value– This paper contributes to the existing literature in three points: despite the importance of the tourism industry to the Lebanese economy, this topic did not receive careful attention in the literature; it takes into consideration the presence of structural breaks and possible nonlinearities in the number of tourist arrivals; and it investigates the TLGH after accounting for instability in the country.

The Links between Energy Consumption, Financial Development, and Economic Growth in Lebanon: Evidence from Cointegration with Unknown Structural Breaks

We investigate the relation between financial development, energy consumption, and economic growth in the economy of Lebanon over the period 2000M2–2010M12. Our findings confirm the existence of cointegration among the variables. The results indicate that financial development and energy consumption contribute to economic growth in Lebanon. The impact of energy consumption on economic growth is positive showing the significance of energy as a main stimulant of economic growth. Financial development is also found to play a vital role in enhancing economic growth. Financial development and economic growth also result in further increase in energy consumption. We offer some policy implications specific to Lebanon considering the recent discovery of large oil and gas reserves in the country and the historical importance of its banking sector which remains a center of Lebanon’s service-oriented economy.

The relationships between economic growth, financial deepening, and information and communication technology: Empirical evidence from Lebanon

The impact of financial deepening and the use of information and communication technology (ICT) in Lebanons economy is empirically investigated by estimating a Vector Error Correction Model (VECM) using data from 1993 to 2009. In the short-run, our empirical results show that neither financial deepening nor ICT seems to impact economic growth. However, there is a unidirectional causality running from economic growth to financial deepening implying that the `demand-following hypothesis, in which financial development is a by-product of growth, is supported in the case of Lebanon. In the long-run, economic growth is found to be strongly related to financial deepening and ICT levels. This suggests the absence of evidence for a dampening effect from either financial deepening or ICT developments on cyclical fluctuations in the shortrun, but strong effects in the long-run growth in Lebanon. A major implication of our results is that growth volatility reductions in Lebanon expected from developments of financial markets, or ICT will be slow to materialize.

Lebanon's market for domestic solar water heaters: Achievements and barriers

Domestic solar water heating systems are a cost effective and mature technology that enjoys increasing popularity around the world yet in many countries the penetration rates are still low. The recent growth in Lebanon's solar water heater market reflects tremendous efforts on the legislative, financial, and awareness level. This paper analyzes the developments in this market and highlights persisting barriers. Our scenario analysis presents a baseline scenario (BS) and two different renewable energy scenarios. RES-1 makes solar water heating systems mandatory for newly constructed dwellings while RES-2 requires also the use of solar water heating systems in already existing buildings. Results show that in the BS electricity consumption growth (for water heating purposes) reaches a record high of 2430GWh in 2027 while this number is limited to 1550GWh in the same year in RES-1. In RES-2 electricity consumption reaches only 1393GWh in 2027. The penetration rate of domestic SWH systems in the BS, RES-1 and RES-2 reaches respectively 10%, 58% and 67% by 2027. Yearly savings in government subsidies reach 209million USD in 2027 in case of RES-1 and 246million USD in 2027 in RES-2. We also present avoided CO2 emissions in each scenario. Increasing electricity prices to cost recovery levels, a SWH capital cost subsidy of 18% in combination with a zero interest green loan can leave a consumer's electricity bill unchanged during the repayment period. Under subsidized electricity prices, a 70% capital cost subsidy would be necessary to achieve the same result. We recommend the implementation of legislation making the use of domestic solar water heating systems mandatory for both existing and newly constructed dwellings, the further development of subsidization programs and increasing electricity prices to cost recovery levels. Concomitantly these measures will foster economic development in a sustainable manner.

Small sample evidence on the tourism-led growth hypothesis in Lebanon

This paper investigates the contribution of tourism to economic growth in Lebanon for the time period of 1995–2010. The presence of long-run and causal relationships is investigated applying the bounds testing approach to cointegration and Granger causality tests. Because of the small sample (T = 16), econometric approaches and critical values used for testing receive special attention. Additionally, a number of diagnostic tests are utilised to ensure that the model is suitable and correct. Interestingly, our results reveal that tourism and economic growth are cointegrated. The Granger causality test indicates that the tourism-led growth hypothesis is valid for Lebanon. Therefore, policy initiatives promoting tourism ought to be further developed and implemented to stimulate economic growth and development for the economy of Lebanon.

The causal relationship between energy consumption and economic growth in Lebanon

This paper investigates the dynamic causal relationship between energy consumption and economic growth in Lebanon over the period 1980–2009. Within a bivariate framework, imposed on us due to data limitations, and in an effort to increase the robustness of our results, we employ a variety of causality tests, namely, Hsiao, Toda-Yamamoto, and vector error correction based Granger causality tests. We find strong evidence of a bidirectional relationship both in the short-run and in the long-run, indicating that energy is a limiting factor to economic growth in Lebanon. From a policy perspective, the confirmation of the feedback hypothesis warns against the use of policy instruments geared towards restricting energy consumption, as these may lead to adverse effects on economic growth. Consequently, there is a pressing need to revise the current national energy policy that calls for a 5% energy conservation target. Also, to shield the country from external supply shocks, given its substantial dependence on energy imports, policymakers should emphasize the development of domestic energy resources. Further, the most pertinent implication is that relaxing the present electric capacity shortages should be made a national priority, in view of its potential positive effect on the economy.

Electricity consumption and economic growth, the case of Lebanon

In this paper we investigate the causal relationship between electricity consumption and economic growth for Lebanon, using monthly data for Lebanon covering the period January 1995 to December 2005. Empirical results of the study confirm the absence of a long-term equilibrium relationship between electricity consumption and economic growth in Lebanon but the existence of unidirectional causality running from electricity consumption to economic growth when examined in a bivariate vector autoregression framework with change in temperature and relative humidity as exogenous variables. Thus, the policy makers in Lebanon should place priority in early stages of reconstruction on building capacity additions and infrastructure development of the electric power sector of Lebanon, as this would propel the economic growth of the country.

Trade and Competition Policies for Growth in Lebanon: A General Equilibrium Analysis

Using recent data on concentration indexes, we estimate that rents accruing from monopolistic positions represent more than 16 percent of GDP in Lebanon. In turn, using an applied computable general equilibrium model, we compare the long term impact of raising domestic competition with that of reducing import tariffs. Simulation results suggest that Lebanon would largely benefit from the reduction of anti-competitive practices. By way of comparison, reducing tariffs would be structurally less effective in terms of raising investment opportunities and real wages, which, in the long run, would inevitably affect economic growth.