Impact Of Capital Formation Research Articles

The Impact of Capital Formation on Economic Diversification in GCC Countries—Empirical Analysis Based on the PVAR Model

The Impact of Capital Formation on Economic Diversification in GCC Countries—Empirical Analysis Based on the PVAR Model

Effects of Energy Efficiency Index on Economic Activity: The Case of G7 Countries

This investigation aims to examine the effects of energy efficiency improvements on economic growth for G7 countries during 1971-2018. To measure energy efficiency, we calculate the energy efficiency index (EEI) using the Fisher Ideal index decomposition method. This study utilizes capital and labor as control variables, in addition to the EEI variable, as determinants of economic growth. Methodologically, this paper conducts the LM (Lagrange Multiplier) bootstrap panel cointegration test which is developed by Westerlund ve Edgerton (2007), and the AMG (Augmented Mean Group) estimator of Eberhardt ve Teal (2010). Both methodologies take into consideration of cross-sectional dependency (CD) issue in the panel setting. The empirical results of this paper indicate that there is a cointegration relationship between the aforementioned variables. In detail, the impact of capital formation on economic growth is positive for all countries, while the effect of labor varies across countries. Besides, it is found that an improvement in energy efficiency leads to an advancement in economic growth for five out of seven G7 countries. The empirical findings of this paper provide some implications for policymakers.

Structural Decomposition Analysis of Global Metal Footprint Change, 1995–2013

With the increasing competition for limited metal ore resources, the impact of capital formation on nations’ metal footprints have been studied broadly. However, the driving forces and pathways of metal footprint change still haven’t been fully understood. Therefore, in the present study, the additive structural decomposition analysis is adopted to decompose the world metal footprint from 1995 to 2013 into five major driving factors. The obtained results indicate that: i) the modern production structure has been becoming increasingly dependent upon metal resources; ii)the production structure effect and consumption volume effect are dominant factors driving the metal footprint increase, yet the intensity effect is the main force offsetting this inclining trend; iii) all the driving factors in developing countries tend to be more divergent comparing with developed countries consistent with their economic growth characteristics. The findings of this study are significant for policy makers to understand the deep causes for domestic metal footprint change and propose proper relevant polices.

Impact of capital formation on production and export: A case of agriculture sector in India

This study empirically examines the impact of capital formation in agriculture and allied sector on production and exports of agriculture sector in India. The study runs from 2004 through 2010. The study employed two and Multi- variables regression analysis model specified on the basic of hypothesized functional relationship between capital formation as the explanatory variables, while Agriculture Production and Agricultural Exports constituted the explained variable. The model for the study was estimated using the ordinary least square (OLS) technique. The result shows that capital formation in agriculture and allied sector has statistically significant impact on the agricultural production and agricultural exports of the economy in the period of reviewed.

Falling Labor Share and Rising Unemployment: Long-Run Consequences of Institutional Shocks?

Abstract The literature on unemployment has mostly focused on labor market issues while the impact of capital formation is largely neglected. Job creation is often thought to be a matter of encouraging more employment on a given capital stock. In contrast, this paper explicitly deals with the long-run consequences of institutional shocks on capital formation and employment. It is shown that the usual tradeoff between employment and wages disappears in the long run. In line with an appropriation model, the estimated values for the long-run elasticities of substitution between capital and labor for Germany and France are substantially greater than one.