Causality Method Research Articles

Islamic Financial Performance Index: The role of Islamic Intellectual Capital

This research is intended to analyze the influence of Islamic Intellectual Capital on the Islamic Financial Performance Index of Islamic Commercial Banks in Indonesia. The used method in this research is causality method. The data were analyzed through panel data regression. The results indicate the level of Islamic Intellectual Capital of Islamic Commercial Banks in Indonesia is high. Furthermore, the Islamic Financial Performance Index indicator with a very high level are Islamic Investment Ratio or Halal Investment and Islamic Income Ratio. The high-level indicator is Equitable Distribution Ratio. The moderate level indicator is Profit Sharing Ratio. The low-level indicator is the Directors-Employees welfare ratio. The very low-level indicator is the Zakat Performance Ratio. Generally, the financial performance of Islamic Commercial Banks in Indonesia based on the Islamic Financial Performance Index has a fairly high level. In addition, Islamic Intellectual Capital has a positive and significant influence on the Islamic Financial Performance Index of Islamic Commercial Banks in Indonesia. The condition shows if the quality of employees, technology, operational systems and good relations of Islamic banks and their partners are high, it will encourage Islamic banks to have high financial performance based on Islamic Financial Performance Index. This research is expected to provide benefits in relation to the measurement of financial performance based on the Islamic Financial Performance Index of Islamic Commercial Banks in Indonesia.

Revisiting the Oil and Food Prices Dynamics: A Time Varying Approach

Given the cyclicality of energy and food commodity prices influenced by global macroeconomic uncertainties, there is a need to provide appropriate measures for understanding the predictive relationship between energy and food commodities. This study revisits the dynamics of oil and food prices using Shi et al. (J Financ Econom 18:158–180, 2020) bootstrapped time-varying Granger causality method to identify and date-stamp causal changes in the predictive effects between oil and food markets, while considering homoscedasticity and heteroscedasticity assumptions. Our results reveal bidirectional and feedback influences between Brent oil and six food commodity prices: corn, rice, sugar, coffee, meat, and palm oil. These influences align with critical global events such as the mid-1990s Asian financial crisis, the early 2000s recession, the 2000s energy crisis, the 2014 oil price crisis, the GFC and food crisis of 2008, the 2020 oil-price war, and the COVID-19 pandemic. Additionally, we observed a causal effect running from wheat and soybean prices to Brent oil prices, highlighting the importance of the predictive power of food prices in the trajectory of oil prices during periods of global events. Longer episodes of Granger causality from food price to oil price were date-stamped across the algorithms. The study suggests that global economic events and crises can affect the relationship between prices in different markets, indicating that the ability to predict prices based on information from another market may change during times of economic and financial instability. The research has a number of practical implications.

Socioeconomic Development Aspects of Democratic Governance across Selected Countries

ABSTRACT There is a need to question the main socioeconomic, political, and cultural aspects of crime rates in a cross-country context. In this context, Dumitrescu and Hurlin’s (2012) Granger causality method, which is not common in the criminological literature, is used – which does not ignore cross-sectional dependence. Moreover, we generate an indicator of “democratic governance” using principal component analysis (PCA) from “government effectiveness” and “voice and accountability.” The key advantage of using PCA is to avoid multicollinearity and make better inferences with dimensionality reduction. The democratic governance contains 93.5% common variance and is equally affected by both governance indicators. The key findings of our study underscore that crime rates are significantly Granger caused by economic growth, democratic governance, unemployment, and urbanization. The intuition drawn from the findings of this paper and the previous researchers’ contribution is that crime can be reduced as a product of good governance. Moreover, the findings revealed that urbanization and democratic governance Granger causes each other. Therefore, urbanization can make countries converge to democratic governance. What the study is unable to say is the dynamic relationship between variables; however, the current evidence offers relevant policy guidelines.

The nexus between female unemployment and labor supply: evidence from Arab countries

With an emphasis on groups like women who have an elastic labour supply, this study examines the link between unemployment and labour market participation in Arab countries from 1991 to 2021. The bootstrap panel Granger causality method is used to determine the causal direction, considering cross-sectional dependency, slope heterogeneity, and structural breaks. The results provide mixed evidence for the invariance, discouraged worker, and additional worker hypotheses, which qualify earlier findings. Of the 17 countries, only 4 are in favour of the unemployment invariance theory. Policies that raise the growth path of capital, productivity, and increase the effective working-age population may influence the unemployment rate.

Institutional quality, financial development and sustainable economic growth among lower income countries

AbstractThis article postulates strong endogenous relationships in lower income countries between institutional quality, financial development and sustained economic growth. These associations were investigated using the vector‐error correction model (VECM) and Granger causality method for a sample of 79 countries from 2005 to 2022. The findings show that (1) these variables reinforce each other in the short run. (2) In the long run, both institutional quality and financial development can fuel economic growth. (3) The positive effect of institutional quality on economic growth is greater than that of financial development. Policy implications of these findings are that careful attention should be paid to co‐development policies to enhance the institutional quality and the financial system in these economies. Policies should also consider economic growth strategies to enable sustainable economic growth rates.

Examining the symmetrical effect of traditional energy resources, industrial production, and poverty lessening on ecological sustainability: Policy track in the milieu of five neighboring Asian economies

Adopting the Westerlund, Kao, Pedroni, Fisher cointegration test, pooled mean group (PMG-ARDL) model and Dumitrescu Herlin granger causality method, the penetrating objectives of the current study is to investigate the long-run relationship, dynamical causality and symmetrical effect of each regressor individually, like traditional energy use, lessening of poverty, real exchange rate, and industrial production on environmental sustainability in the longer and smaller run epoch of time in five neighboring (Bangladesh, China, India, Pakistan, and Thailand) Asian economies from 1990 to 2018. Primarily, the estimated results of the study revealed strong evidence of co-integration among study variables. The PMG model's numerical outcomes further indicate that increased use of traditional energy and industrial production adversely influence environmental sustainability. On the contrary, an uplift in the exchange rate and lessening poverty enhances environmental sustainability in the long run. Nevertheless, in a smaller epoch of time, the impact of all the variables has been insignificant on environmental sustainability. Moreover, outcomes of the Dumitrescu Herlin granger causality method reveal uni (bi) direction causality from industrial production and exchange rate (lessening of poverty and traditional energy use) to environmental sustainability. By summing up the discussion, overall calculations of co-integration under four different tests conclude that there is a strong and stable indication of a co-integration relationship among variables. Whereas, under the PMG-ARDL model, traditional energy use & industrial production (exchange rate & lessening of poverty) declines (upsurges) environmental sustainability. These calculations recommend various policy suggestions that environmental sustainability can be achieved in five neighboring economies by replacing traditional energy with modern one, converting old industrial technology with advanced one, and reducing poverty.

Space-Time Causality Analysis of Regional Impacts of ENSO on Terrestrial and Oceanic Precipitation

Future changes are expected in precipitation under climate change, therefore, changes are projected in the oceanic and terrestrial components. However, it remains poorly elucidated how the El Niño–Southern Oscillation (ENSO) can influence these changes. Therefore, we aimed to perform a space-time causality analysis of regional ENSO impacts on terrestrial and oceanic precipitation by using the Granger causality method as a function of eight temporal lags (lags 1–8). The monthly values of total precipitation obtained using the Lagrangian approach and their respective terrestrial (PLT) and oceanic (PLO) components were used. The analysis was performed for the two regions of western North America (WNA) and eastern South America (ESA) with strong ENSO signals. For the WNA region in winter, the maximum Granger causality was observed in the component of oceanic origin for temporal lags 1 and 2 (3 and 6 months), with a predominance of both positive and negative ENSO conditions. For the ESA region, it was verified that the causality of the ENSO index was maximum for PLT. Temporal lags 2–5 (6–15 months) stood out in winter when there was a marked region of the Granger causality over the La Plata Basin. In autumn, for lags 1–4 (3–12 months), the Granger causality values were predominant in the southern and western areas of ESA and showed a tendency to move northward with an increased temporal lag. Finally, it was shown that high correlation values did not imply the causality of the relationship between the ENSO index and precipitation in the two regions.

Empirická verifikace vztahu mezi saldem hospodaření sektoru vládních institucí a běžného účtu platební bilance: Případ zemí Evropské unie

The article focuses on the relationship between the general government balance and the current account of the balance of payments. The aim is to summarize the existing knowledge about the relationship based on the twin deficit theory and to carry out an empirical verification. As part of the analysis, the Granger causality method is first applied to each EU country separately, and then the threshold panel regression method is used. For the subsequent estimation of the threshold panel model, the direction of the relationship from the general government balance to the current account is considered based on the results of Granger causality. Within the panel, the dependence of the balances on the level of the general government debt to GDP is tested. First, the relationship and its strength are verified in all EU countries. Due to the diversity of EU countries, the economies are subsequently aggregated into sub-panels. Threshold values for general government debt affecting the strength of the relationship between balances are different for individual panels and depend, among other things, on the perception of these countries by the financial markets and often also on the (high) indebtedness of the private sector, which usually requires a more drastic fiscal policy response.

THE IMPLEMENTATION OF SHARIA BANKING ON THE ECONOMY OF SOCIETY IN INDONESIA

The rapid development of Islamic banking in Indonesia, which must be balanced with contributions to economic growth, is the background for writing this article. The analysis in this article uses the Ordinary Least Square (OLS) method to find out how much influence Islamic banking has on economic growth as represented by the Gross Domestic Product. The financial sector plays an important role in driving a country's economic growth. This study aims to analyze the causal relationship between Islamic banking on Indonesia's economic growth, analyze the response of Indonesia's economic growth when shocks occur in Islamic banking variables, and determine the contribution of Islamic banking variables to Indonesia's economic growth. Total deposits, total credit/total financing, and total assets as a variable that represents banking. GDP (Gross Domestic Product) as a variable that represents economic growth. Using the Cointegration and Granger Causality methods, the results show that in general conventional and Islamic banking have an effect on economic growth in Indonesia.

The role of the COVID-19 pandemic in time-frequency connectedness between oil market shocks and green bond markets: Evidence from the wavelet-based quantile approaches

This study contributes to the existing literature on the relationship between oil market shocks and the green bond market by investigating the impact of the COVID-19 pandemic on their dynamic correlation. We first decompose the oil market shocks into components using a time-frequency framework. Then, we combine wavelet decomposition and quantile coherence and causality methods to discuss changes during the COVID-19 era. We observe positive effects of both supply-driven and demand-driven oil shocks on the green bond market at most quantile levels. However, supply-driven oil price changes play a major role. The results also indicate that long-term changes have a greater impact than short-term changes on the connection between oil and green bond markets. Nevertheless, the COVID-19 pandemic changed the nature of the causal relationship, as we observed no relationship under extreme market conditions during the pandemic era. We argue that the economic and social impacts of the COVID-19 pandemic have left investors focusing on the short-term substitution between oil and green bond markets.

Investigations into Ghana’s Macroeconomics Relationship between Inflation and Unemployment. Quantitative Analysis Based on Time Series in the Years 1990-2014.

Indicators of a country's economic well-being include the unemployment rate and inflation rates. The empirical relationship between inflation and unemployment in Ghana's economy is explained and analyzed in this paper. It appears that the most hotly debated statistics in Ghana are the rate of inflation and the rate of unemployment, yet there is lack of knowledge about the connection between unemployment and inflation, it is imperative that we gain this understanding. In addition, the tax rate, compensation for employees, participation in the labor force, and enrolment in tertiary education are all indicators of unemployment. A quantitative framework is used to explain the empirical relationship between inflation and unemployment in Ghana and determine the sensitivity of unemployment to changing inflation levels using co-integration regression, causality, correlation, and sensitivity analyses. The Augmented Dickey-Fuller test of stationarity was adopted, after which the Granger causality method was used to determine causation between inflation and unemployment The study relied on World Bank data from 1990 to 2014 and found a strong correlation between unemployment and inflation in the Ghanaian economy which is also consistent with Haug and King (2011), whereas Onwioduokit (2006) found a negative correlation. The model's variables are stationary, and the findings of the causality test point to a link between Ghana's high unemployment rate and its high inflation rate. The unemployment will rise by 3.2795 percent if inflation rises by 1 percent. I therefore recommend that the Ghanaian economy maintain a low and stable inflation rate in order to reduce unemployment, equivocally, thanks to the findings of this research. There is evidence to suggest that inflation has a long-term positive impact on and is a direct cause of unemployment in Ghana, so policymakers and the government should put more effort into keeping inflation low in order to address this problem. Since inflation levels can be used to measure unemployment levels to some extent and the R-squared is significantly low in the regression result, the measurement of inflation should be done more accurately to avoid errors. Ghana's Statistical Service must devote more resources to ensuring that the CPI basket includes only relevant items and should be given the appropriate weights. Real-world impact should be reported in relation to other indicators or factors to make it more comprehensible. For example, an increase in unemployment of z percentage points could be explained by an increase in the price of an item purchased on the market rising by y percentage points. Finally, the researcher recommends that other economic indicators, such as employee compensation, tax rate, labor force participation rate, and tertiary school enrollment, be taken into consideration as potential indicators of unemployment in African economies.

The Influence Of Work Motivation And Work Environment On The Performance Of Educational Personnel With Religiosity As Moderation At The Kiai Haji Achmad Siddiq State Islamic University, Jember Regency

This study aims to assess the impact of work environment motivation on the performance of teaching staff at UIN KHAS Jember. A higher education institution is considered a knowledge carrier and learning institution with high hopes and goals, a scientifically developed Forum to provide ethical and skills guidance to students and academics. This study uses the causality method with a causal relationship between the positions of the research variables and the influence of the independent variables on the dependent variable. Based on the results obtained, work motivation can positively impact performance. This indicates that the reason increased by the employees' leadership will affect increasing motivation. The results of the path coefficient indicate that the relationship between fellow employees has a significant role in carrying out social relations with many people. It will create a sense of security and make you feel acknowledged by others. The work environment positively influences the performance of UIN Khas Jember's academic staff, which indicates that a good work environment can produce high-performance levels, thereby indirectly causing employees to work at optimal levels.

Financial Risk and Environmental Sustainability in Poland: Evidence from Novel Fourier-Based Estimators

Using Fourier-based ARDL and Fourier Toda Yamamoto causality methods, this study aims to detect the impact of financial risk on environmental sustainability in Poland while controlling economic growth, primary energy consumption, and renewable energy consumption from 1990Q1 to 2019Q4. The outcomes of the Fourier ADL cointegration test indicate all variables are cointegrated. Additionally, the Fourier ARDL long-form estimates indicate both renewable energy consumption and financial risk contribute to reducing environmental degradation in Poland. However, the Fourier ARDL long-form estimates show that both primary energy consumption and economic growth have detrimental impacts on the economy’s level of environmental degradation. Analysis of causality direction with the Fourier Toda Yamamoto causality test indicates both financial risk and renewable energy consumption for the period had a one direction causal effect on environmental degradation. For policy insight, the government could support environmental policies requiring companies to factor climate-related risks into their supervision and financial stability monitoring. The Polish government requires financial institutions to prioritize climate risk scenarios in stress testing to control catastrophic weather-related losses.

Assessing sustainable development with the forces of technological innovation, entrepreneurial activity and energy consumption: Insight from asymmetric and bootstrap causality methods

This is a sustainable study of China amidst high carbon emissions. China has experienced tremendous increase in its economic operations and development which involve the excessive utilization of fossil fuel energy sources. This has put China in the list of nations that contribute towards global warming via carbon emission. On this note, data from China over the period 2002Q1–2019Q4 is analyzed, using multiple techniques (nonlinear autoregressive distributed lag-NARDL, fully modified ordinary least square-FMOLS, and bootstrap approach of Granger causality) for clear insight into China's sustainable development. Relevant instruments (technological innovation, entrepreneurial activities, economic growth proxied by GDP, fossil fuel energy consumption, and FDI) are used to measure China's economic and environmental performance to determine the level of sustainable development of the country. NARDL and FMOLS results reveal that technological innovation and entrepreneurial activity mitigate carbon emissions, while fossil fuels and economic growth induce China's carbon emissions. Also, findings from the bootstrap approach affirm the NARDL and FMOLS outcomes, with both two-way and one-way nexus established among the selected variables. Policies targeting the reduction of fossil fuel consumption in China despite the technological innovations and entrepreneurial activities are thus recommended.

FinTech Investment and GDP Relationship: An Empirical Study for High Income Countries

Technology, the internet, and demographic change have started a rapid transformation in the financial services sector. The widespread use of innovation and technology in financial services in social and economic areas made these services more effective and companies called Fintech have emerged important economic actors. The Fintech sector has generated changes in the traditional financial service understanding and the delivery of these services. In this area, Fintech companies are developing new financial business models with the help of the latest technological developments and offering innovative financial products and services such as payment services, asset management, and insurance services. 
 This study investigates, the relationship between GDP and Fintech investment using panel causality methods from 2014Q1 to 2020Q4 for eight high-income countries: The United States, United Kingdom, Singapore, Australia, Canada, Germany, Israel, and France. The results indicate the existence of cross-sectional dependence among countries. According to Westerlund’s panel cointegration test results, a cointegration relationship between two variables has been found in the long run. In the short run, panel Granger causality variables have been found only in Germany. We find a positive effect of Fintech investment on GDP in seven countries, and we see a negative relationship in Singapore.

The Effect of Job Stress, Job Satisfaction and Emotional Intelligence on Turnover Intention

The purpose of this study was to examine and analyze the effect of job stress, job satisfaction, and emotional intelligence on turnover intention in employees of PT. ISS Indonesia Bintaro. Methods This research uses the causality method. The population in this study were all employees of PT. ISS Indonesia Bintaro. The number of samples used was as many as 150 respondents. Data analysis method using Partial Least Square (PLS). The results of this study are as follows: Job stress has a significant positive effect on turnover intention in employees of PT ISS Indonesia. Job satisfaction has a significant negative effect on the turnover intention of PT ISS Indonesia employees. Emotional intelligence has a significant negative effect on the turnover intention of PT ISS Indonesia employees.

The Effect Of Price Perception, Location And Facility Perceptions On Purchasing Decisions (Survey On Consumers Of Mitra Mart Minimarkets)

This study aims to determine the influence of perceptions of price, location and facilities simultaneously and partially on purchasing decisions at Mitra Mart Minimarkets. The method used in this study is a quantitative research method with a causality method and a consumer survey approach with a sample of 100 respondents. The data were collected using questionnaire techniques. The data analysis used in this study used multiple linear regression analysis, correlation coefficient and coefficient of determination. The results showed that the perception of price, location and facilities had a significant simultaneous and partial effect on the purchasing decision of Mitra Mart Minimarket.

Material productivity and environmental degradation: Moderating role of environment-related technologies in achieving carbon neutrality

After the COP21 climate summit in Paris, the majority of emerging nations confront challenges in achieving their goals of a sustainable economy and carbon neutrality with the lowest possible CO2 emissions. In doing so, environment-related technologies are crucial components that can assist in achieving carbon neutrality objectives. Therefore, the present study examines the impact of material productivity on environmental degradation with the moderating role of environment-related technologies in 17 emerging nations using data from 1995 to 2019. For the empirical analysis, the Driscoll Kraay standard error and Dumitrescu and Hurlin causality methods are used, which are robust to cross-sectional dependence. The results reveal that economic growth, globalization, and financial development positively impact environmental degradation. However, material productivity and environment-related technologies decrease environmental degradation. Furthermore, environment-related technologies negatively moderate the relationship between material productivity and environmental degradation. This study helps policymakers in developing a comprehensive policy to improve environmental sustainability using environment-related technologies in emerging nations.

Pengaruh Workplace Spirituality terhadap Job Related Affective Well-being pada Guru di SMK Swasta Kota Bandung

Abstract. This study aims to determine and analyze the effect of Workplace Spirituality which has three aspects, meaningful work, sense of community, and alignment with organizational values on Job Related Affective Well- being on teachers at Vocational High School in Bandung. The research method used is the causality method with the number of subjects as many as 98 teachers at the Bandung City Vocational High School. This study uses a psychological scale with a workplace spirituality measurement tool from Milliman, Gatling, Kim, and a job related affective well-being measurement tool from Van Katwyk, Fox, Spector, & Kelloway. The results of the study found that 94.90% of teachers had high workplace spirituality and 60.20% of teachers had high job-related affective well-being. The results of multiple regressions show that workplace spirituality has an effect of 69.9% on job related affective well-being, while the meaningful work aspect has the largest effect, which is 33.82%, sense of community is 23.88% and the aspect of alignment with organizational values has the smallest effect, which is 12.19%.
 Abstrak. Penelitian ini bertujuan untuk mengetahui, dan menganalisis pengaruh Workplace Spirituality yang memiliki tiga aspek yaitu meaningful work, sense of community, dan alignment with organizational value terhadap Job Related Affective Well-being pada guru di SMK Swasta Kota Bandung. Metode penelitian yang digunakan adalah metode kausalitas dengan jumlah subjek sebanyak 98 orang guru di SMK Swasta Kota Bandung. Penelitian ini menggunakan skala psikologis dengan alat ukur workplace spirituality dari Milliman, Gatling, Kim, serta alat ukur job related affective well-being dari Van Katwyk, Fox, Spector, & Kelloway. Hasil penelitian ditemukan 94.90% guru memiliki workplace spirituality tinggi dan 60.20% guru memiliki job related affective well-being tinggi. Hasil multiple regression menunjukkan workplace spirituality memiliki pengaruh sebesar 69.9% terhadap job related affective well-being, sedangkan aspek meaningful work memberikan pengaruh paling besar yaitu 33.82%, sense of community sebesar 23.88% dan aspek alignment with organizational value memberikan pengaruh paling kecil yaitu 12.19%.

Pengaruh Good Governance Dan Komitmen Organisasi Terhadap Kinerja Dinas Pemerintah (Sensus pada Dinas Kota Tasikmalaya)

The object of research in this paper is Good Governance, organizational commitment and performance of government agencies. As for the title taken by the author in this thesis is the Influence of Good Governance and Organizational Commitment to Government Service Performance (Census on the Tasikmalaya City Service). The purpose of this study is to find out and analyze the influence of Good Governance and Organizational Commitment on Government Service Performance. In this study the author uses the research method used is descriptive method and causality method. The analytical tool used is Path Analysis. Based on the results of the study it is known that partially Good Governance has a significant positive effect on the performance of the Tasikmalaya City government service, while the organizational commitment does not have a significant effect on the performance of the Tasikmalaya City government service. Simultaneously Good Governance and Organizational Commitment have a significant effect on the performance of the Tasikmalaya City government service.