Long-run Analysis Research Articles

The impact of capital flight on economic development: An empirical analysis from Palestine

This study focused on the function of capital flight to ascertain the true impact of the phenomenon of capital flight on economic development in Palestine and aimed to analyze the short- and long-term dynamic relationship between capital flight and economic development, including other affected variables. This research employed a quantitative research design and the descriptive analysis method. The analysis uses quarterly data from 2004 to 2022. This study employed the autoregressive distribution lag (ARDL) bound testing approach. Actual data from Palestine spanning the years 2004-2022 yielded significant findings. Based on heteroskedastic dynamic regression as an ARDL panel model, important findings were reached. First, both local country fundamentals and global variables have an impact on economic development and its rates over the long term, but in the near term, global forces may be predominantly recognized as drivers. Second, the variable of interest, capital flight, has a favorable impact on tax advantages. The empirical findings revealed that the short- and long-run analyses are consistent with each other. This necessitates putting into practice a variety of tactics, from creating efficient judicial and political institutions to encouraging economic development through managing macroeconomic issues. This study provides a fresh insight for policymakers to evaluate the impact of capital flight on economic development factors when coordinating fiscal and monetary policy in Palestine. The monetary and fiscal authorities should create an efficient policy framework. Palestine must reduce and stop the outflow of cash from inside its borders to improve its capacity to pay back its loans and debts to foreign creditors.

Intellectual Monopoly and Income Inequality in the United States, 1948–2021: A Long-Run Analysis

Proponents of intellectual property claim that it fosters innovation and benefits companies and workers by increasing long-run growth. A growing body of literature challenges these claims by arguing that the cumulative nature of intellectual monopoly amplifies asymmetries between winners and losers. Intellectual monopolies pose disadvantages for countries, firms, consumers, and workers who struggle to maintain a leading position. Using data at the aggregate level from 1948 to 2021 in the United States, this article estimates the long-run effects of proprietary knowledge accumulation on income shares and tests the hypothesis that intellectual monopoly amplifies income inequality. The empirical evidence shows that companies in the United States transferred to wages a significant share of their profits from intellectual property. But these transfers have widened income inequality by benefiting the top 10 and top 25 percent, to the detriment of lower income brackets. Intellectual property alone can explain 23 percent of the increase in the income share of the top 10 percent in the 1948–2021 period. JEL Classification: O34, E25, C22

Elite persistence and inequality in the Danish West Indies, 1760–1914

The issue of how elites as a social group form, maintain their position, and influence the society they control is central to the debate on inequality. This paper studies one of the most extremely unequal societies ever recorded — the sugar-based economies in the West Indies — by focusing on the island of St. Croix in the Danish West Indies and examines the emergence and persistence of its economic elite. The study relies on a novel dataset that covers the entire population of the island over 154 years, allowing for a long-run analysis of elite persistence and the effects of significant economic, institutional, and social changes. Our study shows that elite persistence remained high in global comparison throughout the period of interest, despite several 'critical junctures'. These junctures only had a temporary effect. We contend that this result can be attributed to three mechanisms of persistence: inheritance, institutional co-optation and limited franchise. Finally, we find that although the Crucian elite maintained its relative standing, it came at the cost of severe impoverishment in absolute terms.

A Dynamic Analysis of Sustainable Economic Growth and FDI Inflow in Saudi Arabia Using ARDL Approach and VECM Technique

This study investigates the relationship between sustainable economic growth and foreign direct investment (FDI) in Saudi Arabia from 1980 to 2023. The ARDL approach and VECM technique are employed to analyze the short-run and long-run dynamics. The short-run results show mixed effects. Sustainable economic growth has a positive impact on current and one-period lagged FDI but a negative impact on the two periods lagged. Trade openness and infrastructure negatively affect FDI in the short run. Interestingly, oil rents and real economic growth also have negative short-run impacts on FDI, but these effects become positive with a longer lag. Long-run analysis reveals a negative relationship between trade openness, infrastructure, and oil rents with FDI, suggesting a potential crowding-out effect. Trade openness has a positive long-run impact on most variables, including sustainable growth, FDI, real growth, and CO2 emissions. Oil rents also have a positive long-run impact on these variables. This study finds six bidirectional causal relationships in the short run, primarily between trade openness, infrastructure, oil rents, and FDI. Unidirectional causality runs from oil rents, trade openness, exchange rate, sustainable growth, and real growth to FDI and infrastructure. Additionally, CO2 emissions cause FDI, and trade openness causes sustainable growth. While sustainable economic growth benefits FDI in the long run, short-term policies regarding trade openness and infrastructure require reevaluation. Oil revenue and real economic growth may initially deter FDI, but this reverses in the long term. To attract sustainable FDI, policymakers should focus on long-term economic growth strategies and consider reforms in trade and infrastructure policies. A comprehensive FDI strategy that moves beyond oil dependence and leverages trade openness is crucial to long-term economic diversification.

Childcare restrictions and gender gap in labor outcomes

Purpose This study aims to contribute to the literature by examining the gender gap effects of childcare restrictions. Specifically, not using professional childcare services due to issues like access, quality or costs. Additionally, we explore the long-run consequences of extended work interruptions for childcare. Design/methodology/approach Using a specialized cross-sectional module from the 2018 Spanish Labor Force Survey, we estimated a set of linear regression models to capture the short and long run effects of childcare restrictions in labor market outcomes. Findings We identify substantial gender gaps in labor force, employment, full-time employment and hours worked among parents facing childcare constraints. In contrast, parents without such restrictions experience much lower gender gaps. The long-run analysis reveals that mainly career breaks lasting 2 years or more significantly diminish the labor supply and employment rates of mothers. Originality/value Our study goes beyond examining the effects of childcare restrictions on mothers’ labor market behavior and explicitly studies the gender disparities related to these restrictions. Moreover, our database includes information on work flexibility for childcare, allowing us to explore whether such flexibility can help mitigate these gender gaps. Additionally, we assess the long-term effects of work interruptions due to childcare responsibilities on women’s labor outcomes.

Municipality manufacturing agglomerations unveiled: Exploring spatial structural transformation in Mexico under import substitution and trade liberalisation

This paper conducts a comprehensive long-run analysis of the global spatial concentration and locational dynamics of manufacturing agglomerations in Mexico. While prior research on Mexico has examined the impact of trade liberalisation on processes of regional convergence or divergence, effects on the scale, location and dynamics of agglomerations and local specialisation remain underexplored. To address this gap in the literature, we use a newly-collated municipality-level dataset containing more granular data distinct from more frequently used state-level data. Our analysis spans the period 1950–2019, capturing the full extent of the growing importance of the manufacturing sector and providing a nuanced perspective on the evolution of agglomerations and local specialisation patterns. We investigate shifts in agglomeration during import substitution and following the introduction of trade liberalisation, examining whether new agglomerations emerged or existing ones attracted further economic activity and how these changes impacted local specialisation. In extension, we also examine recent trends, assessing the persistence or alteration of agglomeration dominance in the north of the country. In doing so, our analysis provides valuable insights into the intricate dynamics of agglomerations and local specialisation and their significance in shaping regional disparities.

Income inequality and CO2 emissions nexus: A long-run analysis for Turkey

The relationship between economic factors and environmental impacts is of paramount significance in the pursuit of sustainable development and the implementation of effective measures to alleviate environmental deterioration. This research utilizes the VECM, FMOLS, CCR, and DOLS methodologies to examine the relationship between income inequality and CO2 emissions spanning from 1990 to 2022 in Turkey. Theoretical frameworks such as Boyce's socio-economic dynamics, Veblen's pecuniary emulation theory, and the marginal propensity to emit provide detailed insights into the complex relationship between economic inequality and environmental degradation. In synthesizing the literature on income inequality and CO2 emissions, we observe a wide spectrum of findings ranging from positive to negative associations, with some studies yielding inconclusive results in different nations and areas. Beyond income inequality, this research considers a wider range of CO2 explanatory factors, such as GDP per capita, industrial value added, energy consumption, renewable energy, population density, and the Gini index. The estimates reveal that income per capita, industrial value added, energy consumption, and population density show positive linkages with CO2 emissions. On the other hand, renewable energy share and income inequality reflect negative associations with CO2 emissions. Notably, an increase in the Gini coefficient, reflecting worse income distribution, is associated with a reduction in CO2 emissions in Turkey.

An Empirical Analysis of an E-government System for Economic Growth in ECOWAS Countries

In many ECOWAS countries, the decision-making process for public service delivery has long remained shrouded in secrecy, rendering the general public largely uninformed. Integrating information and communication technology (ICT) into public service delivery seeks to break these barriers. This study, therefore, investigates the impact of e-governance on economic growth among ECOWAS countries, with the specific objectives of examining the effect of four components of e-governance as well as other postulated determinants on economic growth. By employing annual data across 16 ECOWAS countries spanning from 2003 to 2021, using system generalised method of moment (SGMM) and panel-corrected standard error (PCSE) techniques. The results from the PCSE and SGMM estimations show that e-governance positively influences economic growth among ECOWAS countries both in the long- and short-run. Furthermore, the study identifies the significant influence of various control variables on economic growth, persisting in both short and long-run analyses, except for the labour force variable in the short run. This underlines the intrinsic correlation between e-governance and economic growth. Consequently, it becomes imperative for stakeholders within the sub-region to meticulously link investments in e-governance with measurable economic growth outcomes. By doing so, these investments can substantiate expansive initiatives in public service delivery, while simultaneously bridging the historical gap of opacity that has separated citizens from effective government management.

THE ECONOMIC IMPACT OF IMMIGRATION ON LABOUR MARKETS: A COMPARATIVE STUDY OF FRANCE AND GERMANY

This paper aims to investigate the impact of immigration on the labour market in France and Germany using panel data analysis from 2000 to 2020. The study examines various independent variables, including GDP per capita, net migration, inflation, unemployment, and population growth, and utilizes data from the World Development Indicators to validate the models empirically. Econometric models, such as the Pooled OLS model, Fixed Effect model, and ARDL model, are estimated using the statistical program Stata. The findings are supported by the ARDL long-run analysis, which reveals that net migration and GDP per capita have a significant and negative relationship with the dependent variable, the labour force, in the long run. Additionally, GDP per capita exhibits a significant and positive relationship with the labour force. In the short run, inflation shows significance and a positive relationship with the labour force. Moreover, the labour force has an impact on net migration, GDP per capita, and inflation

Linkages between economic growth, health expenditures, education, and environment: dynamic analysis of Nigeria

The study comprehensively analyzed the nexus between economic growth, health expenditures, education, and the environment in Nigeria, using data obtained from Central bank of Nigeria and World Bank. By utilizing a robust dataset spanning from 1981 to 2021, the study employed autoregressive distributed lag (ARDL) approach to uncover intricate relationships. Results, both short-run and long-run analyses, reveal that health and education spending, and gross fixed capital formation positively correlated with economic growth. Conversely, the findings demonstrated that population growth and carbon dioxide emissions (CO2) exerted detrimental effects on economic growth due to the negative impact on the health of the working population. Additionally, the inverted U-shaped relationship between the macroeconomic footprint and income confirms the validity of Nigeria's Environmental Kuznets Curve (EKC) phenomenon. Lastly, the findings of this study hold important policy implications, emphasizing the need for technological advancements and innovative solutions to address the challenges associated with economic growth, health expenditures, education, and the environment in Nigeria. Policy measures promoting birth control through contraception and family planning should be embraced to effectively manage the country's rapidly growing population.

The decline of Aboh’s economic influence in the Western Niger Delta of Nigeria in the era of legitimate commerce, 1830–1960

ABSTRACT This is a study of the decline of Aboh’s economic influence in the Western Niger Delta owing to Europe’s increasing influence in the internal affairs of the Niger Delta in the era of legitimate trade. It evaluates the extent to which European commercial activities influenced Aboh’s trade with other groups of the Western Niger Delta and how they reacted to the European commercial penetration of the Niger Delta interior. The paper depended on primary and secondary sources of data on the subject. The primary sources are largely colonial intelligence reports and oral testimonies from the field and supplemented with available secondary sources. It deploys descriptive and analytical methods to address the subject. The paper argues that Aboh’s pre-eminence as the key player in the trade of the Lower Niger was challenged by European commercial interests. Thus, the paper is a detailed long-run analysis of this well-known argument about European interest within a West African context. The findings show that Aboh lost its middleman position to European penetration into the Niger Delta hinterlands. It concludes that European commercial activities in the area granted economic gains to other Western Niger Delta groups originally under Aboh’s influence.

Impact of Exchange Rate Shock on Foreign Direct Investment in Nigeria.

This study examines the underlying forces of foreign direct investment (FDI) response to the exchange rate shock in Nigeria, covering the period 1981 to 2021. Including long-run analysis, this study employs the VEC model innovation accounting as an econometric analysis technique. The outcomes reveal that in the long run, exchange rate appreciation, a thriving domestic investment environment, and economic size positively drive foreign inflows. Conversely, rising economic instability, particularly associated with increasing price levels, negatively impacts foreign investment. The Innovation accounting analysis indicates that FDI positively responds to shocks in exchange rates, GDP, and capital. However, the strength of these responses diminishes over time. The relationship with consumer price index (CPI) shocks appears more complex, with varying reactions over the specified horizon. Hence, policymakers are urged to prioritize exchange rate stability, promote economic growth and innovation, and enhance the domestic investment environment. Addressing economic instability and inflation is crucial, necessitating robust policies to maintain economic stability. Continuous monitoring of CPI is advised, and long-term policy planning is recommended to ensure sustained positive impacts on FDI. Additionally, international collaboration is encouraged to foster a stable global investment environment.

The Impact Of Islamic Financing Products On Islamic Banks Profitability: Case Of Al Rayan Bank (Qatar)

This study aims to determine the effect of islamic financing products on Islamic banks profitability of Al Rayan Islamic Bank. This research uses Quarterly data of Al Rayan Bank for 2011Q1-2023Q1.The variables used in this study are independent variables, Musharaka, Murabaha, Istisna’a and Ijarah financing. While the dependent variable is, the Islamic bank's profitability measured by (ROE).The study used ARDL Model to analyze the short and long-term relationships between variables. Data collected were analyzed by using EViews10 software. ARDL bounds test findings shown that there is a cointegration relationship between bank profitability and Islamic financing Products variables in the long run. The results of the long-run analysis show that Musharaka financing has a positive and significant effect on ROE at the 5% level. Murabaha financing has a negative and significant effect on ROE. Meanwhile, the Istisna’a and Ijarah variables have no significant effect on ROE. The short run dynamics show that there is a negative and significant effect of Murabaha and Ijarah financing on the profitability of the Islamic bank, while lagged value of Murabaha LMUR(-1) has a positive and significant effect on the profitability index of the Islamic bank. Simultaneously, there is no relationship and effect of Musharaka and Istisna’a on the profitability of the Islamic bank in the short term

Holding the economy by the tail: analysis of short- and long-run macroeconomic risks

We put forward a macro-financial empirical modeling framework that can examine the tails of distributions of macroeconomic variables and the implied risks. It does so without quantile regression, also allowing for non-normal distributions. The framework offers a number of relevant insights into higher moments of the US output growth distribution, as well as the effects of monetary policy and financial (risk premia) shocks on downside macroeconomic risk. This is not only from the short-run perspective but also from the long-run perspective, which has remained largely unexamined in the existing Macro-at-Risk literature. In particular, we estimate the short-run (conditional) and long-run US output growth distributions and study their evolution. The short-run analysis finds that monetary policy and financial shocks render the conditional output growth distribution asymmetric. As such, they affect downside risk over and above their impact on the conditional mean that policymakers routinely focus on. The long-run analysis indicates that US output growth left-tail risk showed a general downward trend in the two decades preceding the Global Financial Crisis (GFC), but this trend got reversed post-2008. Our examination strongly points to the adopted unconventional monetary policy framework featuring quantitative easing as a potential source of elevated long-run downside tail risk in the post-GFC period.

Resilience in maize production for food security: Evaluating the role of climate-related abiotic stress in Pakistan

The primary purpose of this research is to examine the impact of climate change on maize production in Pakistan. This research studied the impact of climate change on maize production in Pakistan from 1990 to 2020 using the Auto Regressive Distributed Lag (ARDL) technique and draws implications for the future of Pakistan's sustainable agricultural industry. According to ARDL's short-run and long-run analyses, variables such as average temperature (AVEGTP), carbon dioxide (CO2), precipitation (PRPT), and tube well irrigation (TWL) all have a significant short-run and long-run impact on maize yield at the 1 %, 5 %, and 10 % significance levels. The estimated findings were also affirmed through FMOLS and DOLS. The study's key findings indicated that variables such as average temperature, carbon dioxide, precipitation, and tube well irrigation had significant short-run and long-run impacts on maize yield. Climate change's impacts on maize yield underline the crucial need for action to address this global issue and ensure agriculture's future. A recent study has emphasized the significant impact of climate change on Pakistan's maize production, stressing the importance of addressing this global issue for food security. The study recommends selecting crop varieties and managing fertilizer applications based on projected climate change to mitigate the impending crisis. Policymakers can use the study's findings as valuable insights to formulate effective policies that ensure the resilience and sustainability of Pakistan's agricultural industry.

Nexus between economic growth, natural resources rents, trade globalization, financial development, and carbon emissions toward environmental sustainability in Uruguay

There have been variances in environmental quality as the globe continues to become a globalized society, however, research including trade globalization into the environmental policy framework remains inconclusive. Using the Uruguayan time series dataset between 1990 and 2020, this study investigated the impact of economic growth, natural resource rents, trade globalization, and financial development on carbon dioxide (CO2) emissions. Using an Autoregressive Distributed Lag (ARDL) model, this inquiry quantifies short- and long-run dynamics. The results of the ARDL bounds test indicate a long-term relationship between carbon emissions and these variables. Additionally, the ARDL short-and long-run analyses demonstrated a positive and statistically significant effect of economic growth, natural resource rents, and trade globalization on Uruguay's CO2 emissions. However, both the short-run and long-run coefficients of financial development are statistically significant and negative, indicating that financial development has no effect on environmental deterioration in Uruguay. Furthermore, by using Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), and Canonical Cointegration Regression (CCR), the findings were confirmed. Based on the findings of this study, it is recommended that international trade regulations be reevaluated and export limitations for goods with high levels of pollution are strengthened.

Impact of Renewable Energy Consumption and Public Capital Expenditure on Poverty Reduction in Nigeria

Poverty has been an important issue of discussion in underdeveloped countries and has been of crucial concern to many stakeholders across the globe. This article examines the extent to which renewable energy consumption and public capital expenditure impact the poverty rate in Nigeria over the period 2003 - 2019. We employed cointegration and Autoregressive Distributed Lag (ARDL) bounds model for our analysis. Our results revealed that renewable energy consumption significantly escalates poverty in the short run. Public capital expenditure, economic growth, and governance quality substantially reduce Nigeria's poverty. The long-run analysis reveals that renewable energy consumption significantly elevates Nigeria's poverty rate in the long run. Moreso, economic growth and quality of governance reduce the poverty rate substantially, whereas public capital expenditure does not significantly reduce the poverty rate in Nigeria in the long run. The Nigerian government was recommended to adopt modern renewable sources through a public-private partnership and promote good governance, especially in the efficient and appropriate implementation of public capital expenditures.

Nexus Among Human Capital, Public Expenses and Economic Growth: Empirical Evidence from Developing World

Public spending and human capital are always focused on appropriate economic growth via a variety of short and long term methods. In this study, government spending, human capital, and economic growth in 31 developing countries are examined from 1986 to 2017. The long-term connections between public spending, human capital, and economic growth are examined in this study. To do this, the research estimates an empirical model that considers human capital, public investment, and the combined impact of these variables on economic growth. For the unit root, econometric procedures such as the ADF test were employed. Comparably, co-integration has been measured using the Pedroni, Johansen Fisher, and Kao tests. For long-run analysis, the FMOLS and DOLS estimators are employed. In the empirical models, labor force, capital formation, public spending, and human capital are independent variables. Long-run results indicate that labor force, capital formation, public spending, and human capital positively affects economic growth. Significant empirical connection among economic growth, public spending, and human capital is quantified in this study. The results of this evaluation, which took place in 31 developing nations between 1986 and 2017, have a big impact on human capital accumulation and fiscal policy. Regardless of whether the model is estimated using weighted or pooled DOLS estimators or weighted or pooled FMOLS estimators, this relationship is robust from the estimation approach.

From finance to sustainability: Understanding the financial development-environment nexus with the environmental Kuznets curve in East-Asia and Pacific economies

This study examines the effect of financial development on environmental quality in East Asia and the Pacific (EP) countries from 1995 to 2020. A unique technique, Dynamic Common Correlated Effects, is utilized to resolve cross-sectional dependence and heterogeneity. The Pooled Mean Group technique is also applied to verify the robustness of the results. The long-run analysis confirms financial development's positive and significant impact on CO2 and CH4 emissions while exhibiting an inverse impact on ecological footprint and N2O emissions in overall and developed EP countries. The study confirms the presence of an inverted U-shaped environmental Kuznets curve (EKC) when analyzing ecological footprint, CO2, and CH4 across all groups of selected countries. However, for N2O emissions, a U-shaped EKC pattern emerges specifically in less-developed and overall EP economies. It is proposed that governments of EP economies should maintain financial development while promoting sustainable environmental management to address climate challenges.

Impact of green digital finance on green economic recovery and green agricultural development: implications for green environment.

This study explores the potential of green digital finance and green agricultural growth to contribute to the green economic recovery of the BRICS economies. We examine the relationship between these variables using empirical data and various statistical techniques, including vector error correction, co-integration, unit root tests and long-run analysis. Our results suggest that well-functioning financial institutions play a crucial role in facilitating the structural transformation of green digital finance and promoting green agricultural growth to achieve green economic recovery in the BRICS region. Our findings underscore the need for pro-financial and green economic development policies and institutions to support and enhance economic recovery. Our results are robust and supported by our study. We also suggest future research directions for stakeholders interested in promoting sustainable economic growth in the BRICS countries.