Newly Industrialized Countries Research Articles

Is the Romer Hypothesis valid for Newly Industrialized Countries? Evidence from panel ARDL

Purpose ― This study investigates the effect of trade openness on inflation, referred to as the Romer hypothesis, for Newly Industrialized Countries (NICs) from 1990 to 2022.Methods ― It uses a panel ARDL method and the Dumitrescu-Hurlin (2012) causality test. Economic growth, credit, and money supply are included in the model as independent variables. Findings ― The findings reveal no statistically significant long-term and short-term relationships between trade openness and inflation. However, money supply has statistically significant positive effects on inflation in the long run, while economic growth and credit exhibit no statistically significant impact. In the short run, money supply and economic growth reduced inflation. According to the Dumitrescu-Hurlin (2012) panel causality test, a bidirectional relationship exists between inflation and economic growth, money supply, and credit, while a unidirectional relationship is observed between inflation and trade openness. Implications ― Reducing the external dependency of sectors that rely on imported inputs is necessary to mitigate the adverse effects of trade openness on inflation in NICs. It is crucial to ensure that monetary policy helps align money supply and credit expansions with real sector trends.Originality ― This research is pioneering in its focus on testing the Romer hypothesis for Newly Industrialized Countries (NICs).

The Impact of Non-Green Trade Openness on Environmental Degradation in Newly Industrialized Countries

Environmental degradation due to human over-exploitation is one of the most pressing global issues. The ten Newly Industrialized Countries (NICs) have recently witnessed substantial economic growth and involvement in global trade. In the discussion on environmental degradation, trade has a crucial role. Scholars use trade openness to test the scale effect on the environment. This research investigates the effect of non-green trade openness, economic growth, and energy consumption on ecological footprint. Panel estimation techniques such as cross-sectional dependence, slope homogeneity, unit root, and cointegration analyses are applied to panel data of ten NICs between 2003 and 2016. The Fully Modified Ordinary Least Squares (FMOLS) method reveals that non-green trade openness increases environmental degradation in the panel. Energy consumption and economic growth are also found to increase environmental degradation. Moreover, the Environmental Kuznets Curve (EKC) hypothesis is validated. The research presents a few relevant policy implications. The NICs should invest in green energy and an energy-efficient economy and focus on stimulating green trade as a catalyst for sustainable economic development in order to improve the quality of their environment. This can be done by introducing higher tariffs on non-green products and investing in technological innovations for green production methods and renewable energy. Although local environmental pollution in the European Union (EU) decreases, an increase in pollution in the NICs threatens the global state of the environment. Therefore, non-green trade should be approached as an international problem that has detrimental effects on all countries in different phases of economic development.

Quantifying Environmental Degradation through Renewable Energy, Financial Development and Economic Sustainability: Insights from Panel Quantile Regression Analysis

The degradation of the environment is a global concern that needs serious attention, including the environmental Kuznets curve (EKC) hypothesis. This article examines the effects of renewable energy, financial development and economic sustainability on the environmental quality of newly industrialized countries (NICs) from 1998 to 2021 in light of the increasing severity of environmental problems associated with industrialization. This study utilized different panel cointegration estimation techniques and panel quantile regression (PQR) estimates to obtain robust findings by examining the variance of each quantile. The results of the cointegration tests confirm the long-run relationship among the variables. Nevertheless, the outcomes from the PQR unveiled that renewable energy negatively and significantly influences CO2 emissions in NICs, namely in the lower and middle quantiles (20th–50th). Financial development showed heterogeneity in the results of all the quantiles. It results in an increase in CO2 emissions from the 70th to 90th quantiles in NICs. The EKC hypothesis is relevant to these findings as this study presents the economic sustainability index, which postulates that when NICs achieve sustainability, they give greater importance to environmental preservation and sustainability. This shift is characterized by reduced emissions throughout all quantiles, ranging from the 10th to the 90th. Economic sustainability corresponds to the falling part of the U-shaped curve of the EKC, wherein sustainability gets priority, resulting in reduced CO2 emissions. Analogous results have been confirmed by comparing heterogeneous panel estimators; nonetheless, there was a significant variation in the intensity of their parameters. Moreover, the robustness analysis through quantile slope equality and symmetric quantiles tests proved legitimate results. The study’s findings offer policymakers with valuable policy recommendations. JEL Codes: C1, F36, F43, O44, Q56

Linking Non-renewable and Renewable Electricity and Government Expenditures to Environmental Degradation: Evidence of 10 Newly Industrialized Countries

This research aims to identify the relationship between non-renewable electricity (NRE), renewable electricity (RE) and government expenditures (EXPD) on environmental degradation using the ARDL model for 10 Newly Industrialized Countries (NIC) during the period 1990-2021. Our empirical findings show that the NRE increases the CO2 emissions, however the RE decrease the CO2 emissions in the long and short run. For the effect of governement expenditure on the environment, it may be classified as direct and indirect. In fact, EXPD affect positively the CO2 emissions. In contrast, The indirect effect operates through the interaction between EXPD and NRE and RE. Our results demonstrate that the interaction between EXPD and NRE affects negatively the CO2 emissions. Nevertheless, the impact of the interaction between EXPD and RE on the CO2 emissions is more important. The results show also there is a bidirectional causality between each variable and CO2 emissions. With the empirical findings as a basis, we suggest that the NI countries should reduce NRE consumption and enhance the environmental expenditures so that they may produce more RE to combat environmental issues.

Charting an Economic Sustainability Path: Quantile Regression Analysis of Green Finance and Financial Development in Newly Industrialized Economies

Sustainability, once a fringe concept, has become a central theme in global discourse, commanding the attention of governments, industries, and individuals alike. Newly industrialized countries (NICs) stand as exemplars of economies in transition, teetering on the precipice of prosperity and vulnerability. The present study aimed to chart economic sustainability through green finance and financial development in NICs. The study uses Panel Quantile Regression (PQR) and robustness analysis using annual data from 1998 to 2022. Overall, the study results indicate heterogeneity in the impacts of green finance, financial development, and foreign direct investment on the economic sustainability of NICs. The findings from the PQR unveiled that green finance contributes to economic sustainability in lower and middle quantiles (15th, 25th and 50th quantiles) while showing negative but insignificant effects in higher quantiles (75th and 95th quantiles). Financial development is proxied through three distinct variables; however, the heterogeneity in the results of all the quantiles can be witnessed. In addition, the positive and significant impacts of FDI were validated approximately across all quartiles (15–75th), but positive and insignificant effects are endorsed in the 95th quantile. Compared heterogeneous panel estimators support analogous results; however, the amplitude of their parameters varied substantially. Finally, quantile slope equality and symmetric quantiles test as robustness analysis confirmed the authenticity of the results. Therefore, this study’s empirical findings can assist policymakers in comprehending how green finance, financial development, and FDI can achieve economic sustainability and address sustainability issues. JEL Classification F43, F65, O11, Q20

Economic complexity, natural resources and economic progress in the era of sustainable development: Findings in the context of resource deployment challenges

In recent years discussion on natural resource curse goes beyond the growth measure to incorporate other development measures of which economic complexity forms a major part. To gauge how natural resource exploitation is determined, researchers and policy makers explore the major determinants of resource curse. Surprisingly, the discussion on the role of economic sophistication in impacting natural resources continues to be scant. Against the backdrop of the perceived gap, this study explores the association between economic complexity and natural resources. This study used linear and non-linear model specifications to explore the impact of economic complexity (ECI) on the natural resource utilization (mineral resources) for ten Newly Industrialized Countries (NICS). In addition to economic complexity, economic growth, human capital, foreign direct investment, and population density were used as control variables in this study. We hypothesize that the relationship between ECI and natural resource rent may have an inverted’ U′ shape, depending on the technological sophistication and complexity of the economic processes. The panel data spans the years 1975–2020. Novel estimation techniques, including cross-sectional dependence tests, panel unit root tests, and cointegration tests, were used in this study. To achieve robust inferences, the long-run estimation was performed using panel Quantile regression, pooled OLS, and System GMM. The research findings support the existence of the inverted ‘U' shaped across natural resource rent and economic complexity. The Dumitrescu and Hurlin, panel causality tests confirm bidirectional causality links across economic complexity and rent on natural resources, mineral resources, human capital, and population density. These findings urge policymakers to recommend comprehensive economic and natural resource deployment policies to achieve sustainability.

How is energy intensity affected by industrialisation, trade openness and financial development? A dynamic analysis for the panel of newly industrialized countries

Exploring the factors that affect energy intensity is a worthy research topic because a decline of energy intensity lowers greenhouse gas emissions and increases energy security. Therefore, using the World Bank data from 2000 to 2020, this study examined how industrialisation, trade openness, financial development, and urbanisation affected energy intensity in 12 Newly Industrialized Countries (NICs). We used panel autoregressive distributed lag/pooled mean group (ARDL/PMG), cross-sectional ARDL (CS-ARDL), and fully modified ordinary least squares (FMOLS) to determine the long- and short-run effects of explanatory variables on the dependent variable, energy intensity. All variables are found stationary after the unit root test and cointegration test confirms that variables are linked in the long run. Panel ARDL/PMG and CS-ARDL results show that industrialisation increases energy intensity in the long and short runs. These tests also show that financial development increases energy intensity over time but not immediately. Trade openness decreases energy intensity in the long run but not in the short run. Urbanisation has negligible effects. Dumitrescu and Hurlin (2012) Granger causality test result shows that energy intensity causes trade openness. The test also shows two-way causality between industrialisation, financial development, and energy intensity. Results-driven policy recommendations, such as investment in efficient and environmentally friendly technologies, and facilitation of trade openness, are made following the conclusion.

Role of economic complexity and technological innovation for ecological footprint in newly industrialized countries: Does geothermal energy consumption matter?

This research evaluates how energy (geothermal and coal), economic complexity, and technological innovation impact the ecological footprint in newly industrialized countries (NICs), considering the period 1990–2018. The authors employed economic complexity, technological innovation, and ecological footprint as significant considerations instead of standard environmental and economic parameters. The study used cross-sectional augmented distributed lag (CS-ARDL) and the pairwise Dumitrescu-Hurlin (DH) panel causality to consider the dynamic character of the correlation between the Environment and economic activities. The outcomes of the CS-ARDL showed that economic growth and coal energy intensify ecological footprint in both the long and short run. However, CS-ARDL results revealed that geothermal energy consumption, economic complexity, and technological innovation lessen the ecological footprint in NICs in the long and short run. Finally, the DH causality results revealed a unidirectional causality from geothermal, technological innovation, economic complexity, and coal energy use to ecological footprint. This demonstrates that all the exogenous variables have a predicted power on the ecological footprints in NICs. Based on these findings, policy measures to diversify products have the potential to tackle ecological problems.

The Nexus between Savings Gap, Foreign Exchange Gap, and Foreign Direct Investment Inflows into Asia: Two Gap Model Analysis with Panel Data Approach

The study analyses the nexus between Savings (Savings- Investment), Foreign Exchange (Import- Export) Gap and net Foreign Direct Investment (FDI) inflow into Asian Countries. Economies for this analysis are taken from Newly Industrialised Countries (NICs) based on the valuation of GDP of the respective countries. Six countries, such as, China, India, Indonesia, Thailand, Malaysia and Philippines are considered for this study over a period 1982-2016. Using Panel Data Approach, the analysis has been able to find out a long run cointegration between Savings Gap and FDI as well as Foreign Exchange Gap and FDI. As proposed by Two Gap Model, the influence of FDI has been found on both the variables. Whereas the effect of savings gap on net FDI inflow is positive and significant for the said period with a negative Error Correction Term which proves the movement from short run disequilibrium to long run stable equilibrium. After proving the direction of causality, the short run joint influence of savings gap with its lagged values has been checked. Through Wald Test, the result is proved to be significant. On the other hand, the effect of Foreign Exchange Gap on FDI is not significant in nature. Finally, from the study, it is suggested that if domestic savings for all the six countries together are given importance from the level of respective Governments, the Savings Gap may be reduced which will indicate less dependence on foreign investments into these countries. Being NICs, self-funding of future investments is always preferred which is only possible if countries are contended with adequate capital accumulation on their own in previous periods.

The causal relationship among trade openness, financial development, and economic growth: Recent evidence from newly industrialized countries (NICs)

A country's financial development and trade openness are important indicators that affect integration into the economic system at the international level. Especially in newly industrializing countries, these variables can be beneficial in ensuring economic growth. Financial development supports economic development through the mobilization and effective use of capital. Trade openness is one of the unifying forces of productivity and economic growth. The effectiveness of trade openness is highly dependent on structural reforms. Newly industrialized countries are motivated to attract large amounts of capital and investment from the global economy. These countries tend to encourage exports while ensuring their industrialization. This research investigates the relationships between financial development, trade openness, and economic growth for ten newly industrializing countries. Research data contained the period from 1990 to 2020. The Dumitrescu-Hurlin panel causality test was used in the analysis. Considering the results, there is a uni-directional causality relationship between trade openness to economic growth and financial development to trade openness. Moreover, a bidirectional relationship between economic growth and financial development has been observed.

Trade openness, globalization, and natural resources management: The moderating role of economic complexity in newly industrialized countries

Enhancing resource efficiency is the primary concern for industrialized countries. Climate susceptibility motivates the development and identification of resource efficiency drivers. Although the existing literature is evident on the factors influencing resource consumption, the role of economic complexity and trade openness is under-explored. Therefore, the study anticipates the short and long-run impact of trade openness, economic complexity, economic growth, and globalization in newly industrialized countries (NICs) from 1990 to 2019. The study utilized the Cross-section Augmented Autoregressive Distributed Lag (CS-ARDL) model to overcome the concerns of cross-section dependence and slope heterogeneity along with the Augmented Mean Group estimates to validate the outcomes. The results reveal that trade openness, globalization, and economic growth are negative, while economic complexity positively affects the material footprints in the NICs. The moderation effect of trade openness and economic complexity significantly affects resource consumption in the long run, whereas its effect is negligible in the short run. These findings signify that trade in industrialized countries is responsible for the excessive usage of materials in the region; however, resource depletion is meticulous if industrial processes are augmented with complex products. The findings imply that economic complexity neutralizes the negative consequences of globalization and revising the trade policies in the newly industrialized region could help to reduce resources consumption.

The 60-year downward trend of economic growth in the industrialized countries of the world

This report, using data from a range of authoritative sources, studies the long-term postwar economic growth of the industrialised North and shows that this has fallen continuously, with only brief and limited interruptions, since at least the early 1960s. The trend is extremely strong and includes all major Northern economies without exception. It is confirmed by both Purchasing-Power-Parity (PPP) and a range of standard real GDP measures, by a variety of weightings of the growth rates, and a variety of aggregations of different countries. The Newly-Industrialised Countries (NICS), after early high growth rates, joined the general trend of other industrialised countrieds after the Asian Financial Crisis of 1997. It is thus an extremely well-confirmed historical trend. Recent data show no evidence of any post-COVID reversal. These results sheds new light on the current difficulties of the world economy and have many implications. They conflict with any idea that Secular Stagnation as it is increasingly referred to even in mainstream literature, originates in some recent upset such as the 2008 crash, or in the incidence of, or problems created by, a putative new régime of accumulation such as neoliberalism or financialisation. In fact, the roots of the present crisis lie in a long historical process which set in very shortly into the ‘Golden Age’ of postwar expansion.

International Trade, Foreign Direct Investment, Financial Development and Renewable Energy Supply: Panel Data Evidence from Newly Industrialized Countries

In many newly industrializing countries (NICs), increased international trade activities are often triggered by several advancements, including attracting foreign direct investment (FDI), financial development, and technological changes. Recently, abundant and diversified renewable energy sources used in production have also started to take their place among these advancements. Although the relationship between FDI, financial developments, and international trade for NICs has been analyzed in many studies, incorporating renewable energy supply’s impact in this linkage has been relatively narrow. This paper aims to fill the gap in the literature by investigating the effects of renewable energy supply on FDI, financial development, and international trade for newly industrialized countries using panel causality and panel cointegration analyses between 1990 and 2019. Our findings indicate (i) uni-directional causality running from international trade to financial development, (ii) uni-directional causality running from renewable energy supply to financial development, and (iii) bi-directional causality between financial development and FDI. The result of the cointegration analysis showed that there is no long-term relationship between the variables.

Does geothermal energy and natural resources affect environmental sustainability? Evidence in the lens of sustainable development.

Climate change and global warming have been driven by a rise in carbon dioxide (CO2) concentrations in recent decades, posing a danger to environmental sustainability. Thus, this research scrutinizes the effects of two types of energy (coal and geothermal) and natural resources on CO2 emissions in 10 newly industrialized countries (NICs). The study also considers the role of financial globalization using a data between 1990 and 2019. This research applied a fresh nonparametric econometric technique termed "method of moments quantile regression (MMQR)." This approach is resistant to outliers and produces an asymmetric connection between variables. Furthermore, the long-run estimators (AMG and CCEMG) are employed as a robustness check. The findings reveal that natural resources, coal, and economic growth contribute to the degradation of the environment in the NICs in all quantiles (0.1-0.90). However, geothermal energy aids in enhancing environmental sustainability at all quantile distributions (0.1-0.90). Our findings are robust with alternative methods (AMG and CCEMG). The research's outcomes have the potential to help NICs nations design policies. Finally, based on the research results, a policy framework is proposed to solve the objectives of SDGs 7 and 13.

How collaboration with G7 countries drives environmental technology innovation in ten Newly Industrializing Countries

The development and deployment of environmental technologies (ETs) is critical to avert further environmental destruction, to significantly reduce emissions and to halt climate change. Innovation in ETs is particularly pertinent in newly industrializing countries (NICs), since they will soon overtake developed countries in terms of aggregate greenhouse gas emissions, but also have the economic strength required to scale up ETs rapidly. Even though NICs now supply a substantial share of low-carbon technologies, multilateral climate change policies continue to focus narrowly on technology transfer rather than collaboration and co-invention. In addition, G7 countries have vocalized their intention to collaborate with developing countries to innovate and diffuse ETs, suggesting that collaboration can be a key driver of developing country innovations. Against this background, we conduct an empirical analysis of ten NICs from 1990 to 2017 and demonstrate that technological collaboration with G7 countries significantly increases ET innovation in NICs.

Natural resources management and technological innovation under EKC framework: A glimmer of hope for sustainable environment in newly industrialized countries

The association between natural resources and environmental destruction has major ramifications for the ecosystem, and technological innovations are considered an imperative tool to address these challenges. Therefore, this study examines the dynamic association between natural resources, technological innovation, and environmental sustainability using annual data of newly industrialized countries (NICs) from 1990 to 2019. We applied advanced panel cointegration techniques and confirmed that natural resources and technological innovations have a stable long-term association with ecological sustainability. The long-run results from the Cross-Sectional ARDL estimator indicate that natural resource rent limits environmental sustainability while green technological advancements help reduce ecological deterioration. Similar findings are observed in the short run; however, the coefficients’ magnitudes are higher in the long run. Moreover, the validity of the Environmental Kuznets Curve (EKC) hypothesis is also confirmed in NICs. These results are consistent with robust alternative estimators and emphasize the significance of suitable policies for efficient natural resources management through technology innovations and the accomplishment of sustainable development goals.

Study Reviews and Rethinking the Key Processes for Managing Building Materials to Enhance the Circular Economy in the AEC Industry

The rapidly accelerating economic development of newly industrialised countries (NICs) has created far-reaching environmental problems. The new construction of numerous infrastructures and buildings, particularly in the architecture, engineering, and construction (AEC) industry, has led to an exponential increase in the demand for raw materials and energy, which is leading to the depletion of natural resources. The approach to treating these buildings at the end of life has also raised concerns worldwide. Transforming the current linear development model into a circular economy is considered an effective solution. This paper reviews a broad range of relevant literature, extracting four key factors influencing building circularity (BC) from past studies. These factors are interpreted as four key processes dealing with building materials: pre-treatment, composition, decomposition, and post-treatment. We demonstrate how materials are treated throughout the building lifecycle to illustrate the interrelationships among these processes and to exemplify the potential of the key processes for effecting BC. Additionally, two examples are used to support the theoretical framework. This study intends to make contributions to circular economy theories and to provide references for policymakers and practitioners.

The trade participation of developing countries in the context of the global value chains

This Paper explores the main role of Global Value Chain on the Pattern of International Trade and the impact on the developing and New-industrial countries through exports promotion of intermediate goods across value chains activities globally, In Addition exploring the effects of the participation on the pattern of international trade and the new reallocation of industrial hubs which have been distributed along the global value chains over the world. The study applies the Qualitative analysis using the macro indicators relevant to the phenomenon to explain its impacts on the developing economies in a selected industry .

Review on the State of the Art of Electricity Load Forecasting Methodologies in Developing and Newly-Industrialised Countries

Existing studies in Developing and Newly-Industrialised (DNI) countries merely analysed the load demand forecasting methodologies, with little emphasis on consideration of data quality, provision of research agenda and the proposition of the design architecture of load forecasting. Therefore, this paper surveys 22 articles from 18 DNI countries, attempting to investigate the load forecasting methodologies as well as data cleansing mechanisms, and then proposes a general design framework for these countries. A systematic review protocol is applied in this study to achieve unbiased and scientific-based findings. Economic growth, number of customers, price of electricity, temperature, calendar events, and daytime found to be significant drivers of electricity consumption. Furthermore, the findings indicate that 63.64% of the surveyed load forecasting mechanisms considered the inclusion of outlier-removal preprocessors. This paper has pinpointed the issues pertaining to load forecasting in the DNI countries such that a robust model, fitting a context can be built with efficiency.

The impact of foreign direct investment on environment: evidence from newly industrialized countries.

This research aims to investigate the effect of foreign direct investment on carbon emissions through the panel ARDL method using annual data for the 1990-2016 period for the newly industrialized countries (NICs), including China, Malaysia, Mexico, Philippines, Thailand, Turkey, India, and Brazil. The stationarity of the series was obtained through LLC, IPS, and Fisher ADF panel unit root tests, the cointegration relationship with the panel ARDL-PMG approach, and the causality relationship with Dumitrescu and Hurlin (DH) tests. As a result of the long-term analysis, the foreign direct investment, energy consumption, and trade openness have a positive and significant impact on carbon emissions, whereas economic growth has a negative and significant impact on carbon emissions. The result shows that a percent increase in foreign direct investment increases carbon emissions by 0.03%. As a result of the short-term analysis, it was seen that the coefficient of the error correction term (ECT) was negative and statistically significant. According to DH panel causality test results, there exists a bidirectional causality relationship among energy consumption and carbon emissions, and a unidirectional causality relationship from economic growth and trade openness to carbon emissions and from carbon emissions to foreign direct investment. As policy implication, in industrialized countries especially China and India, there is a greater need to invest in green energy consumption at a larger scale to achieve future sustainable development goals.