Growth In South Asia Research Articles

Role of Financial Development and ICT in Promoting Inclusive Growth in South Asia: Moderating Effects of Governance

The primary purpose of this study is to compute the index for inclusive growth by taking into account the indicators of poverty, income inequality, labor productivity, life expectancy, job creation, and climate. Calculating the index accomplished by the utilization of principal component analysis in order to acquire weights. Further in the study, the influence of financial development, governance, consumption, and economic growth on inclusive growth for selected south Asian economies (Pakistan, Bangladesh, India, Bhutan, Sri Lanka, and Nepal) is measured. The data is gathered from the World Development Index (WDI), the World Governance Index (WGI), the Internet Subscriber Database, and the International Monetary Fund Development Database. Due to the fact that the data spans from the year 2000 to the year 2023 and that missing values are interpolated through the use of trend projection, a fully balanced panel data sheet has been generated. Through descriptive statistic and VIF, prerequisite information is gathered to see the robustness of model. When it came time to make a decision on the unit root testing, the cross-sectional dependency test utilized to seek guidance. According to the findings, there is no evidence of cross-sectional dependency, and the first generation of unit root tests utilized. The stationarity results of mixed order of integration and T>N indicate the use of panel ARDL. Additionally, in order to see the influence that governance has on inclusive growth in connection to financial development, the moderator effect of governance also inquired. Based on the findings, it is concluded that regulatory quality is not playing a significant moderator role of the financial development towards inclusive growth in selected economies of south Asia. Drawing the inferences from the results of the study it is suggested that to expand the financial inclusion by supporting the digital financial services particularly in marginalized areas.

Examining the Determinants of Financial Inclusion in South Asian Countries

Financial inclusion is an important aspect of achieving economic growth in South Asia. The present study is offered to examine the key factors of financial inclusion in South Asian countries. The study considered the 2017 World Bank Global Findex database for the analysis. The probit regression model is used to find the relationship between financial inclusion and its determinants for individual country level as well as for the group of South Asian countries. The results have shown that socio-economic variables like age, gender, education, income and workforce are important factors of financial inclusion. The higher income quintiles, upper education classes and workforce participation have a higher probability of owning bank accounts and greater chances of accessing formal savings and borrowings. Female households are still vulnerable in the process of financial inclusion in South Asian countries. The study suggested that financial inclusion can be enhanced with higher education, higher income and more workforce participation. JEL Codes: G21, D14, C25

Asymmetric Effects of Trade Openness, Financial Development, and Human Capital on Economic Growth in South Asia

ABSTRACT This study uses the nonlinear autoregressive distributed lag (NARDL) model to explore the relationship between trade openness and output growth in South Asia from 1980 to 2019. Findings reveal significant short- and long-term effects, with asymmetric dynamics. In linear ARDL models, Pakistan and India show strong positive correlations, while Bangladesh shows a negative one. Non-linear modeling reduces these effects, but Nepal still benefits. Sri Lanka’s linear model indicates a non-significant negative correlation, while the non-linear model reveals a positive relationship. These results highlight the complex dynamics between trade openness and economic growth in South Asia.

Is digitalization essential for abating carbon emission growth in South Asia?

Output generation processes across South Asia are deemed unclean (highly emission-intensive) due to excessive reliance on fossil fuels. Thus, decarbonizing the growth processes within this region has critical emphasis among policymakers. However, since the South Asian countries are yet to be ready to undergo the renewable energy transition, it is unlikely that “their annual carbon discharge levels will subside” anytime soon. Under such circumstances, these countries need to limit the rate at which their carbon emission levels rise each year. Therefore, the impacts of digitalization on annual carbon emission growth rates in selected South Asian countries are assessed in this study. Overall, considering internet penetration rate as a proxy of digital technology adoption, the results confirm that policies aimed at digitalizing the concerned South Asian economies not only exert emission growth rate-reducing impacts via a direct channel, but also indirectly reduce emission growth rates by making natural resources sectors more productive, expediting the energy sector greening processes, greening the financial sectors, making corruption controlling measures within institutions more effective, and limiting urbanization-induced environmental quality-worsening effects. Therefore, it is relevant for the South Asian government to emphasize on digitalization while simultaneously ensuring that green digital technologies are adopted within the major macroeconomic sectors across this region.

Analyzing the Intricate Nexus of Ecological Footprint, Urbanization & Economic Growth in South Asia: A Panel 2SLS Analysis

The depletion of natural resources, environmental degradation, and climate change are critical global concerns. In South Asia, rapid urbanization and economic growth have improved living standards, but they have also exerted significant pressure on the environment. It is crucial to determine interconnectedness and common determinants of these factors to address the environmental challenges effectively and promote sustainable development. This study explores the relationship between environmental degradation, urbanization, and economic growth in five South Asian countries—Bangladesh, Nepal, Pakistan, Sri Lanka, and India, over the period 1994 to 2022. To analyze these connections, this study develops indices for infrastructure and governance using Principal Component Analysis (PCA). Several tests, including the Im, Pesaran, and Shin test and the Fisher and Pesaran Augmented Dickey-Fuller unit root test, are applied to ensure the stationarity of the variables. The Variance Inflation Factor is used to check for multicollinearity, and the Wald coefficient restriction test confirms the presence of simultaneity. Findings from the Panel Two-Stage Least Squares (2SLS) regression indicate a significant one-way positive relationship between economic growth and ecological footprint, suggesting that economic growth leads to an increased environmental impact. Additionally, urbanization shows a direct positive link to both ecological footprint and economic growth, although the reverse effects are not statistically significant. The study also finds that industrialization and infrastructure development significantly contribute to urbanization and environmental degradation. Infrastructure, however, negatively impacts economic growth, while globalization encourages urbanization and reduces environmental harm. Education is found to have a strong negative relationship with urbanization. The study concludes that achieving environmentally conscious economic growth in South Asia requires focusing on sustainable development goals, investing in green infrastructure, adopting eco-friendly industrial practices, and improving the education system in the region.

Global, regional, and national levels and trends in burden of urticaria: A systematic analysis for the Global Burden of Disease study 2019.

Urticaria places a significant burden on individuals and society due to its widespread nature. The aim of this study was to evaluate the burden of urticaria in different regions and nations by analysing data from the Global Burden of Disease study 2019 (GBD 2019), with the goal of providing information to health care policymakers. By utilising data from the GBD 2019 database, this study analysed metrics such as incidence, prevalence, disability-adjusted life years (DALYs), age-standardised rate (ASR), and estimated annual percentage changes (EAPC) globally and across 204 countries and regions. The data was further stratified by age, sex, and sociodemographic index (SDI). In 2019, global incidence cases, prevalence cases, and overall disease burden as measured by DALYs all increased. The distribution of the burden exhibited marked geographical heterogeneity. At the regional level, the burden is highest in Central and Eastern Europe and Central Asia, with the strongest growth in South Asia, compared with a decline in the high-income Asia Pacific. At the country level, Nepal reports the highest burden of urticaria, while Portugal has the lowest. Gender and age analyses showed that the burden of urticaria is higher in females than in males, with urticaria cases declining with age, especially in children, and picking up among the elderly. The study also finds a correlation between the burden of urticaria and the SDI, with the central part of the SDI showing a consistent increasing trend. This study found that the global burden of urticaria has risen from 1990 to 2019. Factors like geographic location, gender, and SDI influenced the urticaria burden. Overall, these results offer a resource to guide public health strategies seeking to reduce the burden of urticaria.

The Prodigious Need for Fueling South Asian Economies through Sustainable Energies

South Asia is one of the fastest growing regions in the world during the last two decades. This growth momentum has been fuelled by carbon-intensive fossil fuels as reflected through the expansion in fossil fuel utilization in the total energy mix of 60.5 per cent on average for the period 1996-2000 to 70.3 per cent by 2011-2015. Against this backdrop, the study intended to identify the relationship between energy consumption and economic growth in South Asia to recognize the feasibility of promoting low-carbon economic progress in the future. The study employed annual data for the period from 1971-2014 for five selected South Asian countries. The unit root test results indicate that all the variables are stationary at their first difference and the four statistics of the Pedroni cointegration test indicate the existence of a long-run relationship between the variables. The FMOLS estimator implies the significance of the energy consumption in economic growth in the region where one per cent increase in energy consumption leads to a 0.78 per cent increase in economic growth. The study finds a strong bi-directional relationship between the core variables which illustrates the necessity to shift towards sustainable energy sources to achieve an undisrupted economic expansion with a minimum carbon footprint. Thus, the study lays the foundations to identify the aforementioned relationships and encourage the derive of sustainable energy solutions to fuel the growth in the region.

Analysing the impact of FDI and Institutional Quality on Economic growth in South Asian: Panel ARDL APPROACH

This study investigates the impact of institutional quality and foreign direct investment (FDI) on the economic growth of South Asia from 1996 to 2021. The analysis employs various statistical techniques, including panel unit root testing, panel cointegration testing, and Panel Autoregressive Distributive Lag (PARDL) models, to gain insights into the region's economic development. For finding the association between institutional quality, FDI, domestic investment and economic growth in South Asia, first tried to check the unit root problem in the selected series by employing the panel unit testing and results of these tests conclude that some variables are integrated at level while some other variables are integrated at the first difference, so for testing the cointegration or long-run relations among these variable the panel cointegration tests are employed and these tests conclude the long-run association among the variables. For checking the long and short-run impact of institutional quality, FDI, domestic investment and economic growth the panel ARDL test is employed. The results demonstrate the significant positive long and short-run impact of institutional quality, FDI, domestic investment on economic growth in the region of South Asia. These relationships demonstrate the persistent nature of interactions among these variables, emphasizing the importance of policies that promote strong institutions, attract foreign investments, and stimulate domestic capital formation to sustain regional economic growth. The study offers critical recommendations for South Asian countries to enhance their economic growth by focusing on the strengthening institutional quality, encouraging FDI, developing the special economic zones, promoting domestic investment, investing in the infrastructure and promoting regional economic integration. These recommendations offer a clear path for South Asian countries to achieve sustained economic growth by addressing the interplay between institutional quality, FDI and domestic investment dynamics. By implementing these measures, South Asia can secure lasting prosperity and enhance the well-being of its people in a rapidly evolving global economic landscape.

Exploring the Complementary and Nonlinear Effects of Financial Development and ICT on Inclusive Growth in South Asia

The current research aims to examine the dynamics among financial development, renewable energy consumption, information and communication technology (ICT) and inclusive growth by focusing on the interaction of finance and ICT in South Asia from 1995 to 2019. The objectives of the study are obtained by using new and broad measures for inclusive growth and financial development. The panel co-integration tests confirm the long-run association between the selected variables. The existence of cross-sectional dependence and mixed order of integration of analyzed variables require the application of panel linear and nonlinear autoregressive distributed lag (ARDL). The findings of both techniques disclose that financial development and ICT individually are significant and vital contributors to inclusive growth in the long run. While their collaboration does not supplement inclusive growth during the same period which is an interesting and unique finding. The short-run outcomes also endorse this outcome. However, the individual impact of financial development remains insignificant while ICT enhances inclusive growth significantly in the short run. The panel nonlinear autoregressive distributed lag (NARDL) results have more explanatory powers than panel ARDL and endorse the assumptions of significant complementarity and nonlinearity between financial development-ICT and inclusive growth. Therefore, it is suggested to increase the access and efficiency of financial intermediaries to accelerate the participation of the masses in the economic growth process and its benefits. In addition, more investment in ICT infrastructure and education is needed so that the ICT sector can complement the financial sector efficiently to boost inclusive growth in South Asia.

Renewable energy development, unemployment and GDP growth: South Asian evidence

PurposeThis study aims to investigate the interplay between renewable energy development, unemployment and GDP growth within Bangladesh, India, Pakistan and Sri Lanka. The research underscores the significant role of renewable energy plays in stimulating economic growth and mitigating unemployment, offering crucial policy insights for sustainable growth in South Asia.Design/methodology/approachUtilizing the autoregressive distributive lag (ARDL) framework and Toda Yamamoto causality through the vector autoregressive (VAR) approach, the study analyzes the long-term and short-term impacts of these variables from 1990 to 2019.FindingsThis study reveals a significant co-integration among renewable energy consumption, unemployment and GDP growth in selected South Asian countries. The long-term estimation shows renewable energy consumption influences negatively economic progression in Bangladesh, with no notable correlation with unemployment. In contrast, Sri Lanka demonstrates an optimal relationship among all the variables. Short-run assessments reveal a significant positive relationship between renewable energy consumption and economic growth in India, while an inverse relationship is evident in Pakistan. Moreover, the relationship between unemployment and economic progression, the result shows a negative and significant relationship in India and Sri Lanka.Research limitations/implicationsThe study emphasizes the need for policy development concerning renewable energy development, unemployment reduction and sustainable economic growth in South Asia. While limitations exist, future research can expand upon this work by incorporating varied data, additional countries or alternative modeling techniques.Originality/valueThis research offers a unique exploration into the multidimensional impacts of renewable energy consumption, unemployment and economic growth in the South Asian context, an area previously unexplored in such depth.

Decomposed and composed effects of economic freedom on economic growth in south Asia

It is frequently asserted that high levels of economic growth are supported by economic freedom. For the period 1995–2021, this study examines the influence of the composed economic freedom index and several subcomponents of economic freedom on the economic growth of four South Asian economies, namely Bangladesh, India, Pakistan, and Sri Lanka. The Ordinary Least Squares, Random Effect Model, and Robust Least Squares approaches are utilized to estimate the composed and decomposed influence of economic freedom on economic growth. Robust Least Squares reflects the robustness of the connection between economic liberty and growth. According to the results of these tests, economic liberty has a strong and favorable stimulus on growth. When the different indicators of economic liberty are evaluated independently, we discovered that the magnitudes of most economic freedom indicators are significant. Conversely, monetary freedom contributes very little to economic expansion. The effects of government spending, public trust, and labor flexibility on economic expansion are hypothetical. The tax load hinders economic expansion in the economies under consideration. Property rights, freedom to do business, trade liberty, investment choice, and financial liberty all have a positive, strong, and sizeable stimulus on economic growth. The decomposed influence of each indicator of economic freedom will help develop policy choices.

Assessing the Relationship Between Income Inequality and Economic Growth in South Asia

The trade-off between inequality and growth and what should be done about it are some of the most debated issues in economics. The study aims to assess the relationship between income inequality and economic growth in South Asia. With different kinds of literature assessing different relationships between these two variables, the effects of inequality on growth are still very ambiguous for researchers. The paucity of time series data on the ‘Gini Ratio’ for South Asia has been one of the primary reasons for a small or no contribution to the effects of inequality in growth in the region. Here, the study used the data on the income share ratio of the top 10 percentile and bottom 50 percentile from 1980 to 2015 as a proxy for inequality and see its relationship with growth using the ‘Generalized Method of Moments’ estimation technique. The study found that inequality has a significant positive relationship with growth, which provides the basis for a trade-off between equity and efficiency. This gives rise to important policy implications for policymakers dealing with inequality.

Debt and Economic Growth in South Asia

After 1980s, in most developing countries, the rate of debt accumulation and increase in debt servicing are highlighted as major factors affecting the growth rate of output. Most of these countries lost their competitiveness in the international market mainly as a result of insufficient exchange rate adjustments. In addition, the weakening of terms of trade, economic mismanagement and crisis of governance also lowered growth rates in the developing countries. The downward pressure was larger in the countries facing higher debt burden as these countries faced higher interest rates, decline in the external resource inflow, lower export earnings, lower domestic output and lower imports. In case of South Asian countries, the external debt scenario has changed over time. According to World Bank (2001) Pakistan’s ranking worsened to ‘severely-indebted low income country’ from ‘moderately-indebted low income country’ in 1997, where as India’s ranking improved to ‘less indebted low income’ country from ‘moderately indebted’ in 1997. The rapid accumulation of debt, rising repayment burden and the economically and politically resource inflow or rescheduling motivated rescheduling of debt (as in case of Pakistan) has raised concerns regarding the impact of debt on the growth process of the South Asian countries.

Exports, Imports, and Economic Growth in South Asia: Evidence Using a Multivariate Time-series Framework

This paper examines the export-led growth hypothesis for the five largest economies of the South Asian region using a multivariate time-series framework. The South Asian countries present an interesting case study in view of their increasing outward orientation and adoption of export promotion policies as part of their growth strategies. A key feature of the study is the explicit incorporation of imports in the analysis to make allowance for their role in the export-economic growth relationship. While controlling for imports, the results indicate bi-directional causality between exports and output growth in Bangladesh, India, and Sri Lanka in the short-run. The study finds long-run equilibrium relationships among exports, imports, and output for Bangladesh and Pakistan. However, for India, Nepal, and Sri Lanka, no evidence of a long-run relationship among the relevant variables is found. These results are in contrast to some earlier work that found the export-led growth hypothesis to be a long-run phenomenon for all countries in the region.

Dynamic Modelling of Energy and Growth in South Asia

Energy plays an important role on the demand and the supply sides of the economy. On the demand side, energy is one of the products a consumer decides to buy to maximise his utility. On the supply side, energy is the key factor of production in addition to labour, capital and other raw materials. Energy is considered to be the key element in the socio-economic development of a country. It also helps to improve the living standards of the society through the increase in economic growth. This implies that there is a causal link running from energy consumption to economic growth. If causality runs from energy consumption to GDP then it implies that an economy is energy dependent and hence energy is a stimulus to economic growth [Jumbe (2004)]. Shortage of energy may negatively affect economic growth and may cause poor economic performance leading to a reduction of income and employment. On the other hand, if causality runs from GDP to energy consumption, this implies that economy is not energy dependent, and hence energy conservation policies may be implemented without adverse effects on economic growth and employment [Masih and Masih (1997)]. If there is no causality between energy consumption and GDP, it implies that energy conservation policies may be pursued without affecting the economy [Jumbe (2004)]. Based on these arguments, it is necessary to analyse the link between energy consumption and economic growth because it is often argued that the increased availability of energy services act as key stimulus of the process of economic development.

Productivity and Economic Growth in South Asia and China (Distinguished Lecture)

This paper, begins with a discussion of the well-known issues involved in defining and measuring total factor productivity (TFP) and its contribution to growth (as well as the possible contribution of growth to productivity), the economic theory underpinning productivity, and policies that impact on and influence changes in productivity. It is followed by, first, a selective discussion of the studies on cross-country variation in productivity levels and growth, and then the experience of South Asia and China in a comparative perspective across the region and across the developing world. The share of South Asia in global GDP and its growth has remained stagnant since the early nineties. Disturbingly, except India, the rest of South Asia experienced a decline in TFP growth between 1989-95 and 1995-2003. The paper concludes that for achieving sustained productivity growth, well-functioning social and economic institutions are important, since through their incentive structure they influence, labour force participation, savings and accumulation of human and physical capital, risk-taking and innovation as well as efficiency of resource allocation. Public policies, particularly macro-economic, foreign trade and investment policies, matter a great deal.

Effects of volatility, fiscal policy cyclicality, and financial development on growth in South Asia

This study empirically investigates the association between macroeconomic volatility and growth in the presence of credit constraints and governmental fiscal policy stance. This study considers four South Asian countries: Bangladesh, India, Pakistan, and Sri Lanka to examine the relationship between macroeconomic volatility and growth during the period lasting from 1980 to 2018 using the fully modified least square method. This study finds an inverse impact of volatility on growth in the presence of financial market constraints as credit market imperfections restrict companies from borrowing which eventually affect long-term investment and innovations. Also, the results suggest that fiscal policy for South Asian countries is pro-cyclical.

Political Disorders and Economic Growth Nexus during 1960-2020: An Empirical Analysis of South-Asian Countries

Background: The election is a process of transferring power and authorities to lead the public position in democratic practice. This process not only hands over the power for the decision making but also introduces changes in the governing system that influence either way to the individual, firms, community, society, and the entire nation through various governing tools. An election affects the economic system from within and outside in south-Asian countries. Therefore, the south-Asian economy keeps tracking the different types of elections to adjust their economic system accordingly grounded on the level of its harm and benefits. Academic research can provide a directional understanding of how the election can influence the economy.
 Objective: The major objective of this study is to examine the impact of the national election on the economy in South Asian countries. 
 Methods: This study has employed the panel data of five major south-Asian countries: Bangladesh, India, Nepal, Pakistan, and Sri Lanka, from 1960 to 2020. We collected the series of data from the World Bank database and the official websites of respective countries. The data were empirically analyzed using the difference-in-difference (DID) method and descriptive statistics.
 Results: An empirical analysis result shows a positive role of the national election in South Asia except for Pakistan. Further, this study also indicates that the coefficient of different-in-difference is positive, indicating a positive impact of the first Constituent Assembly Election-2008 on economic growth in Nepal. However, this analysis also shows that the national election before the Constituent Assembly (CA) Election-2008 had a more significant positive impact on economic growth than the post-CA elections in Nepal. 
 Conclusions: Overall, this study concludes that the national election has a positive impact on economic growth in South Asia except for Pakistan, but the degree of influence depends on the socio-political and economic structure of the respective country in the region.
 Implications: The findings of this paper would be useful for scholars interested in a sociopolitical economy in the south Asian region and equally valuable for the policy stakeholders.

Post-2015 India-Nepal Relations and China Factor in South Asia

The India-Nepal relationship has always been regarded as a distinctive one because of strong cultural, political, and civil ties. The unannounced economic blockade imposed by India in 2015, however, takes the India-Nepal relationship to a cult. The misplayed neighbourhood policy of India after 2015 moved Nepal towards its northern neighbour. Likewise, for India, Nepal is equally very strategic to China as one of the signatories and the core component of the ‘Belt and Road Initiative’. Thus, the Indian-Nepal partnership bitterness and multilevel Chinese participation in Nepal is the same scenario for India’s overall neighbourhood policy misconduct and China’s growth in South Asia. This study examines the major events that occurred in Nepal after 2015, encouraging distancing relationships with India and closeness to China.

External Debt and Economic Growth: Evident from South Asian Countries

External debt is one of the fiscal policies that are still widely used by developing countries as an instrument of development capital. Limited capital in development in developing countries is one of the obstacles to the accelerated development of a country, one of which is in South Asian countries. This study aims to determine the effects of external debt, exports, foreign direct investment (FDI), and exchange rates on economic growth in South Asian countries using panel data in eight countries with a 2005–2019 series. data in the form of panel data from several data sources, including the World Bank, UnctadSTAT, and the Asian Development Bank. The panel data regression method is used to see the effect of external debt and other macroeconomic variables on economic growth as proxied by GDP growth for South Asian countries. The results of the analysis found that external debt, exports, and FDI had a significant positive effect on economic growth in South Asian countries. However, the exchange rate has a significant negative effect on economic growth in South Asian countries. These results imply that external debt is still needed as a policy instrument in development and economic growth in South Asia, with debt management for the allocation of productive activities. As indicated by increasing welfare and national economic growth, external debt management can accelerate development.