Panel Estimation Methods Research Articles

Examining the impact of ecological deficit on life expectancy in GCC countries: a nonlinear panel data investigation

AbstractThe Gulf Cooperation Council (GCC) countries have witnessed remarkable economic growth over recent decades. Arguably, this progress of these major oil and natural gas producers has come to the detriment of the environment in terms of increased CO2 emissions and associated ecological degradation. The effects of these high emissions and environmental challenges on human health, specifically life expectancy (LE), have not been thoroughly explored in the literature. We aim to fill this research gap by assessing the relationship between Ecological footprint deficiency and the diverse and context-specific factors affecting LE in the GCC, highlighting the critical roles of urbanization, economic indicators, and digitization in shaping health outcomes. The study employs panel data for the 2000–2020 period. It utilizes linear and non-linear panel estimation methods to analyze these variables’ long-term and short-term effects. Specifically, we run unit root tests, cointegration analysis to validate our datasets, and OLS, ARDL, and panel threshold regressions to examine said relationships. Our findings reveal a significant relationship between ecological footprint and LE across the GCC countries. The results indicate that a higher ecological deficit is associated with lower LE in our sampled nations. Meanwhile, our panel threshold results highlight more nuanced impacts of our variables of interest, revealing significant threshold effects and intricate dynamics influencing LE. Our results are robust when substituting CO2 emissions for the ecological footprint suggesting and supporting our evidence for a more complex, potentially nonlinear relationship. Our study emphasizes the urgent need for sustainable environmental policies to mitigate health risks and promote long-term well-being in the GCC region. Nuanced approaches are needed to address each GCC country's health and environmental challenges.

Institutional, economic and cultural safeguards against corruption: a panel study of OECD countries

Purpose The purpose of this paper is to ascertain whether the combination of anti-corruption measures, with simultaneous impact on the institutional, economic and cultural dimensions, is associated with lower levels of corruption. Design/methodology/approach The authors have developed a research that seeks to find statistical evidence of the relationship between levels of corruption and combinations of anti-corruption measures. To test the hypotheses, the authors performed panel regression analysis using different panel estimation methods, namely, fixed effects (FE) models. Findings The results do not fully support the idea that the combination of anti-corruption measures with simultaneous impact on the institutional, economic and cultural dimensions has more impact on corruption levels than other measures taken singly, but rather that the most determining factor in preventing corruption lies in government effectiveness. Originality/value The relevance of this study lies in the shortcomings of this type of research applied to anti-corruption measures. Moreover, the development of panel data analysis makes it possible to approach the phenomenon from a double perspective, over time and in comparative terms between different countries, incorporating non-immediate effects and possible interactive effects between different anti-corruption measures.

Improved drinking water, healthier children? Evidence from Pakistan

Purpose One of the United Nations’ sustainable development goals is to ensure the availability of improved drinking water for everyone. In this study, we examine the association between access to improved drinking water at the district level and child nutritional outcomes in Pakistan.Design/methodology/approach We employ district-level unbalanced panel data from Pakistan from various rounds of Pakistan Social and Living Standards Measurement Surveys and Multiple Indicators Cluster Surveys compiled by the Data4Pakistan, Pakistan District Development Portal. We examine the impact of the percentage of the population in a given district with access to clean drinking water on the percentage of stunted, underweight and wasted children in the district. The analysis proceeds in two steps. In the first step, we explore the spatial distribution of improved drinking water coverage and child development outcomes across districts. In the second step, we study their relationship by employing standard panel estimation methods and controlling for district characteristics.Findings The spatial analysis reveals the large disparity among districts and provinces in terms of improved drinking water coverage and child nutrition. The estimation results indicate that there is a significant association between the accessibility of improved drinking water and child development outcomes. The effect is significant for child stunting and underweight but not for child wasting. The impact appears to be stronger in rural districts. These findings are robust to alternate empirical strategies.Originality/value This is the first such study to examine the provision of improved drinking water at the district level in relation to child developmental outcomes in a developing country context.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-09-2023-0739

The influence of institutional quality, economic freedom, and technological development on Islamic financial development in OIC countries

This study investigates the relationship between Institutional quality, Economic freedom, technological advancement, and Islamic financial development in selected OIC countries. This study employs the panel estimation method to examine annual data pertaining to Islamic bank industries across 22 countries, sourced from the SESRIC database, from 2013 to 2021. The findings show that the overall quality of institutions and economic freedom influence Islamic finance development. Further, the contribution of technological development appears when institutional quality indicates higher performance. Despite the predominant correlation observed among institutional indicators, this study, focusing on a comprehensive index, reveals a consistent and significant contribution of institutional quality to the growth of Islamic finance. Furthermore, this study's findings show that institutional quality and economic freedom are related; yet, the methods by which the foundations of each indicator influence financial development differ. The findings of this research underscore the importance of urging policymakers, particularly governmental authorities, to prioritize the development of policies and initiatives aimed at fostering a healthy and conducive environment. Emphasizing practical and transparent institutional frameworks is essential for cultivating a well-regulated economic environment.

Analyzing the role of sustainable investor in global systemically important banks and less significant institutions

The purpose of our paper is to analyze the market reaction to banks’ sustainable activities, by focusing on the impact of Environmental, Social and Governance (ESG) practices on banks’ profitability and risk-taking. Specifically, we investigate if and to what extent banks with lower ESG scores are considered less profitable and riskier than those characterized by higher ones, and by taking into consideration both the joint and the separate effects of ESG dimensions. Using panel estimation methods on listed global systemically important bank and less significant European banks, over the period 2014–2020, we find that banks with higher ESG scores are perceived as more profitable and less risky by the market, thus supporting the risk mitigation view. Interestingly, our findings reveal that investors behave in the same way, regardless of the size of the bank, when assessing the impact of ESG scores on the bank's return and risk. Our evidence is robust to selection bias and endogeneity concerns. Overall, the results support the ESG regulatory policy on mandatory disclosures of non-financial reporting for larger entities and emphasize the need to enhance its benefits and extend it also to smaller banks.

Investigating the implications of technological innovations, financial inclusion, and renewable energy in diminishing ecological footprints levels in emerging economies

The correlation between technological innovation, economic growth, renewable energy, and ecological footprint carries significant policy implications for environmental sustainability. Furthermore, financial inclusion can drastically affect the technology-climate nexus across different countries and its moderating impacts have received sufficient attention. To do this, this study examined how technological innovation, financial inclusion, economic growth, and renewable energy affected emerging economies' ecological footprint from 1990 to 2019. Additionally, this study also scrutinizes the moderating role of financial inclusion with other regressors on ecological footprint. To account for structural shifts, disguised cointegration, and numerous breaks in panel regression, this study applies advanced panel estimation methods for empirical analysis. The estimated outcomes exhibit that the influence of technical innovation, climate technologies, and renewable energy significantly reduces the ecological footprint levels. Besides, economic growth and financial inclusion significantly increase the ecological footprint levels in the emerging economies. Furthermore, the integration of innovative technology and renewable energy in emerging countries mitigates the adverse effects of financial inclusion by making it easier for creative technologies and reducing ecological footprints. These results show that emerging countries' innovative technology and renewable energy sources should be integrated with financial inclusion to enable long-term mitigation of environmental damages and sustainable growth. Based on these estimated findings, the research recommends that emerging economies should hasten technological innovations along with stronger financial development to curtail ecological concerns without hindering the pace of sustainable economic growth.

The effect of foreign direct investment on capital accumulation in developing countries

ABSTRACT The purpose of this study is to examine whether foreign direct investments are a blessing or a curse for capital accumulation in developing countries. Data were collected for 16 developing countries over the period 2005–2018. An Arellano-Bover/Blundell-Bond dynamic panel estimation method was adopted to analyze the physical capital accumulation effect of foreign direct investments. Our analysis indicates that for every percentage increase in foreign direct investment inflows to developing countries, physical capital increases by 2.31 percent. In addition, a random-effect panel estimation was implemented to analyze the effect of foreign direct investments on human capital. For a one-percent increase in foreign direct investments, human capital increases by 2.38 percent. The results of our regressions show that not only the volume but also the type of foreign direct investment matters for capital formation in developing countries. Specifically, foreign direct investments in the secondary sector have a statistically significant positive effect on both physical and human capital. By contrast, foreign direct investments in the primary and tertiary sectors have a negligible effect. Our analysis suggests that developing countries would benefit from investing more resources in education and opening up their economies to attract foreign direct investments, particularly in the manufacturing sector.

THE IMPACT OF STANDARD COSTING ON THE PROFITABILITY OF LISTED CONSUMER GOODS FIRMS IN NIGERIA

This study aimed to determine to what extent standard costing improves the profitability of consumer goods companies in Nigeria. This was achieved by investigating and analysing the relationship between the cost of raw materials, the cost of labour, and the cost of manufacturing overhead on the profit after tax of listed consumer goods firms in Nigeria. Data availability has led to the selection of fifteen (15) consumer goods companies retrieved from the financial statements of these firms. Secondary data have been collected over a ten (10) years period, from 2012 to 2021. Panel estimation methods (pooled OLS, fixed effect estimation, and random effect) and a post estimation test were used to examine the compiled data. The results showed that profitability of firms in the consumer goods industry in Nigeria was significantly correlated with its manufacturing overhead costs, but negatively correlated with its raw material costs and labour cost. The research indicated that cautious consideration of raw material costs and the maintenance of effective standard costing across all labour costs were essential to attain the desired results KEYWORDS: Standard cost, raw material cost, labour cost, manufacturing overhead, Profit after tax, consumer goods firms in Nigeria.

Migrants remittances and fertility in the Post-Soviet states

ABSTRACT The demographic consequences of remittance flows to the developing countries have so far received scant attention. In this study, we examine the impact of migrants’ remittances on fertility by employing unbalanced panel data from Post-Soviet states. During the last three decades, these countries witnessed large-scale out-migration accompanied by high inflows of migrants’ remittances, and went from a high mortality – high birth rate to a low mortality – low birth rate regime. Employing standard panel estimation methods and instrumental variable (IV) approach, we find evidence for a significant negative association between remittances and fertility. These findings are robust to alternate measures and strategies. The impact of remittances is significant beyond a minimum threshold and has strengthened over time. The findings of the study highlight the remittances’ substitution effect contributing to the post-communist countries’ demographic transition.

Exploring Causality Between Domestic Savings and Economic Growth: Fresh Panel Evidence from BRICS Countries

The paper analyses the direction of causality between domestic savings and economic growth for BRICS countries with the help of secondary data. It also examines the functional interrelationship between savings and economic growth to answer one of the key questions if the rapid economic growth of these emerging countries can be explained by their extent of savings. The Dynamic panel estimation method has been applied to examine both the short-run and the long-run relationship between savings and economic growth. Both Granger and Dumitrescu-Hurlin panel granger causality tests have been used to explore the direction of causality. Results of panel autoregressive distributed lag (ARDL) model show that both in the short-run and in the long-run, gross domestic savings significantly explains economic growth. Both the causality tests argue in favour of bi-directional causality between savings and economic growth for BRICS countries. Country-specific results show mixed causality where India, China and South Africa experienced bi-directional causality. For Brazil the causality is only from savings to economic growth while there is no causality for Russia. The study will help the policymakers to formulate monetary and fiscal policies that will be either saving-friendly or income-friendly.

How energy transition and environmental innovation ensure environmental sustainability? Contextual evidence from Top-10 manufacturing countries

Through the United Nations Climate Change Conferences, industrial economies have been urged to formulate stringent environmental regulations. This study adds to the current deliberations by exploring the role of energy transition and environmental innovation on ecological footprint for the top ten manufacturing countries. The time period of analysis runs from 1995 to 2019. We have added other energy and macro variables to reduce the omitted variable bias. The panel estimation methods confirm significant association across the concerned variables. Our findings from CS-ARDL, AMG, CCEMG, and FMOLS confirm that environmental innovation, renewable energy and energy transition have a significant negative association on ecological footprint. On contrary, financial development, economic growth and urbanization lead to environmental deterioration. Given the findings we propose some policy suggestions. In particular governments should foster technological and structural changes that are necessary for energy transition to enhance long-run economic efficiency. Further the manufacturing economies should encourage renewable energy consumption to reduce the burden on ecological footprint. To this end the countries can foster development of solar industry and upgradation of infrastructure in the context of other renewables.

Impacts of Information and Communication Technologies infrastructure development on economic growth: An empirical study of Southeast Asian countries

This article aims to systemize growth models and analyze the impacts of Information and Communication Technologies (ICT) infrastructure development on the economic growth of Southeast Asian countries. Accordingly, growth models are developed with ICT inputs, including mobile cellular subscriptions, fixed telephone subscriptions, fixed broadband subscriptions, and Internet users. Using data from World Bank, the author collected 220 observations of 10 ASEAN members during the 2000-2021 period. To evaluate how ICT infrastructure factors affect the economies, the author used various panel analysis and estimation methods: Panel unit-root test, panel cointegration test, and the Generalized Method of Moments (GMM) estimator. The results showed that all the variables were stationary and had cointegration relationships. Additionally, the Ramsey test results showed that there were no omitted variables in the models, which proved the fitness of the models. The study found that 3 ICT variables significantly improved economic growth: mobile cellular subscriptions, fixed broadband subscriptions, and Internet users; while fixed telephone has negative effects on the sample. The author also found that economic growth is significantly improved by labor force, gross fixed capital formation, and trade openness. Theoretically, this article built a growth equation with a vector of different ICT factors, including Mobile cellular subscriptions, fixed telephone subscriptions, fixed broadband subscriptions, and Internet users. Furthermore, when using the system GMM estimator which controls bias such as endogeneity, heteroskedasticity and auto correlation, effects of explanatory variables on economic growth were significant. Practically, the research results provided an overview of the contributions of ICT factors to Southeast Asian economies, which are consistent with the current situation of ICT development in the region. From these results, the article gave policy implications for Vietnam in developing ICT aspects as well as in applying ICT in socio-economic activities.

Electricity access and green financing in the African region

PurposeThis study aims to provide empirical evidence on two research questions: firstly, whether green finance is positively related to electricity access, and, secondly, if the domestic economic environment moderates the relationship between green finance and electricity access? This paper pays particular attention to the regional disparities in Africa.Design/methodology/approachWhile pursuing the study objectives, the authors apply a variety of statistical approaches and tools to assess the robustness of the findings. The authors use panel dataset for analysing data. In order to empirically examine the relationship between green finance and electricity access in the African region, the paper employs static and dynamic panel estimation methods, Poisson method and adopts two-step system generalized method of moments (GMM) approach for dealing with issues relating to endogeneity. The authors also use alternate proxy for the electricity access, which is drawn from the regulatory indicators for sustainable energy (RISE) scores.FindingsThe authors find that despite the fact that green funding appears to support job creation, household incomes aren't high enough to drive rising demand for electricity. The study underscores the role and responsibilities of external funding agencies to ensure that funds at the receiving end are effectively routed to encourage access to clean and sustainable energy, which is good to the economic and domestic environment. Further, due to the relatively modest size of some funds, the cost to administer those funds is larger than the funds themselves. This causes inefficiencies, which may temporarily provide jobs but not lasting growth. This means there is no regular need for energy, therefore larger investors have no reason to enter the market. This discourages investors from public-private partnerships or private investments and prevents future investment.Research limitations/implicationsThe provide insights into the private-public partnerships and whether the challenges to electricity access are being turned into investment opportunities. The effects of the power Africa project initiatives are revealing, with, sanitation being an impediment to the development of electricity infrastructure, specifically in low-income group countries.Practical implicationsThe study confirms the view that trivial amounts of green financing (US-Aid or grants) impose a burden on the absorptive capacity of the recipient government and increases the transaction costs and is likely to be an impediment (Kimura et al., 2012) to initiating projects that enhance electricity access.Social implicationsThe results indicate that although green financing seems to be supporting employment opportunities, income levels are insufficient to create demand for electricity usage. It, therefore, becomes imperative that sanitation (SDG 6) is fully addressed in order to ensure that SDG 7 is attained.Originality/valueThe authors provide insights around the private public partnerships and whether the challenges to electricity access are being turned into investment opportunities. The effects of the power Africa project initiatives are revealing, with, sanitation being an impediment to the development of electricity infrastructure, specifically in low-income group countries.

Does the export-to-import ratio affect environmental sustainability? Evidence from BRICS countries

The study aims to examine the effects of trade balance, economic growth, green field investment, energy use, financial development, and urbanization on environmental sustainability in BRICS countries. This study proceeds to estimate the long-term association using the fully modified ordinary least square (FMOLS) and the dynamic ordinary least square (DOLS) panel estimation methods for the years 1991–2020. This empirical study finds that the ratio of exports to imports has a negative effect on environmental degradation. This indicates that increasing the trade balance eventually leads to environmental sustainability, which finally improves living standards and environmental conditions in the BRICS countries. The findings further show that green field investment and financial development substantially improve environmental sustainability, but energy use, urbanization, and economic growth desperately negatively affect environmental sustainability. Additionally, this research finds a unidirectional relationship of environmental sustainability with trade balance, green field investment, energy use, urbanization, and economic growth rate. This study states how BRICS countries can be protected through trade balance controlling environmental degradation. Thus, this research provides improved orientations to the policymakers of BRICS countries to design policy in favor of the environment.

The impact of climate change on China's agricultural green total factor productivity

Using China's province-level panel data from 2001 to 2019 and the unexpected super efficiency MetaFrontier-Malmquist model (MinDS) to compute the super efficiency MinDS index for the green total factor productivity of China's agricultural sector, the paper analyses the temporal evolution in the agricultural sector's green total factor productivity across China's three economic regions by kernel density estimation. The effects of general climate factors and extreme weather events on the agricultural sector's green total factor productivity are empirically tested. The results show that precipitation, temperature, and humidity significantly impact agricultural green total factor productivity. The semi-parametric panel estimation method fits the nonlinear relationship between climate change and agricultural productivity. In addition, the impacts are found to vary across grouping levels. The mechanism test shows that climate change affects agricultural green total factor productivity through output, input, and structure effects. The test of the synthetic control method based on counterfactual thought shows that extreme weather has a significant negative impact on agricultural green total factor productivity in severely affected areas and is shown to display spatial and dynamic sustainability. The paper's results encourage policymakers in China to actively promote the coordinated and high-quality development of regional green agriculture under the condition of climate change.

The role of eco-innovations, trade openness, and human capital in sustainable renewable energy consumption: Evidence using CS-ARDL approach

Recently, Group of 20 (G20) economies has faced extensive energy consumption issues and lack of attention has been paid by the researchers towards the effectiveness of key driven factors REW energy consumption such as ecological innovation, trade openness and human capital. The study, thereby, examines the association between said constructs and provides evidences from G-20 economies covering the period from 1995 to 2019, hence addressing the literary gap. The study used multiple methods such as second-generation panel estimation method for unit root, CS-ARDL technique to find out the association among constructs in short and long run and AMG and CCEMG method for robustness analysis. Results revealed that eco-innovations, trade openness and human capital play significantly positive role in the adoption of renewable energy consumption in G-20 countries. These estimations are found to be robust in AMG and CCEMG analysis. Relevant policies are suggested to be made by practitioners based on the obtained results.

Research on the impact of inclusive finance on agricultural green development: Empirical analysis of China's main grain producing areas.

In order to study the impact of inclusive finance on agricultural green development, This paper uses both static panel and dynamic panel (system GMM model) estimation methods to make empirical analysis of the impact of inclusive financial development on agricultural green development. The results both find that there is a significant positive correlation between the level of inclusive financial development, real GDP per capita, the proportion of the added value of agriculture, forestry, animal husbandry and fishery in GDP and agricultural green development. This paper puts forward some countermeasures and suggestions to promote agricultural green development, including vigorously developing inclusive finance, promoting economic growth, promoting the development of agriculture, forestry, animal husbandry and fishery, and increasing environmental protection expenditures.

STANDARD COST EFFECT ON PERFORMANCE OF SELECTED LISTED FOOD AND BEVERAGE COMPANIES IN NIGERIA, WEST AFRICA

The aim of this research was to determine whether or not a change in standard cost will improve the financial standing of a sample of Nigerian food and beverage manufacturers. This goal was reached by analyzing the relationship between the price of raw materials, the price of labor, and the price of manufacturing overhead on the bottom line of Nigerian food and beverage firms. Five manufacturing firms were chosen at random for the research. Nestle Plc, Cadbury Nig Plc, P.Z. Cussons Nig. Plc, and Presco Nig. Plc are the food and beverage companies that were included in the survey. In this case, we used secondary data that we had gathered over the previous decade (2010-2020). Panel estimation methods (pooled OLS, fixed effect estimation, and random effect) and a post estimation test were used to examine the compiled data. The results showed that a firm's performance in the manufacturing sector in Nigeria was significantly correlated with its manufacturing overhead costs, but negatively correlated with its raw material costs, and positively correlated with its labor costs. The research indicated that careful consideration of raw material costs and the maintenance of effective standard costing across all labor costs were necessary to obtain the desired results. Because of the significant savings in time and money that may be achieved via the use of standard costing principles and procedures, the research concludes that all food and beverage businesses in Nigeria should do so.

Does green technology advancement and renewable electricity standard impact on carbon emissions in China: role of green finance.

Renewable energy growth should be accelerated in order to meet our goal of carbon neutrality and peak carbon emissions. Laws like the Renewable Electricity Standard (RES) are becoming increasingly important in producing renewable energy. Using green technology advancements is seen as balancing economic growth with environmental security. Though the connection between green technology advancements and CO2 emissions is poorly understood, empirical research is lacking, especially in developing countries. Climate change action now falls under a single overarching contract, signed in Paris on November 4, 2016. Global warming mitigation aims to keep temperature increases to no more than 2°C above preindustrial levels. By 2060, China intends to reach carbon neutrality by developing green technologies (GTI). Because of these interconnections, this research explores the relationship between green technology innovation (GI) and renewable energy investment (REI) in selected Chinese provinces from 2005 to 2019. GI, REI, urbanization, industrial value-added, and income per capita were all considered in the STIRPAT model. We used a panel of chosen regions to test two relatively new panel estimation methods empirically: "continuously updated fully modified" (Cup-FM) and "continuously updated bias-corrected" (Cup-BC). According to our findings, urbanization and green technological developments positively impact CO2 emission reduction. The panel also finds that investments in renewable energy and the industrial sector fail to reduce pollution levels. A positive and negative coefficient of income per capita indicates that the inverted U-shaped EKC hypothesis is valid for the Chinese provinces. The results provide vital strategy insights and recommendations for the panel of experts and countries worldwide.

Financial inclusion and poverty alleviation: an empirical examination

This study analyzes the impact of financial inclusion on poverty reduction in 156 countries belonging to different income groups during the 2004–2019 period. We construct a novel composite financial inclusion index and apply both static and dynamic panel estimation methods to examine the impact of financial inclusion on two different poverty levels. Our results indicate that financial inclusion has a significant negative association with extreme poverty in developing countries but not in high-income countries. The effect of financial inclusion on moderate poverty is weaker than that on extreme poverty. We also examine the conditional relationship between gender inequality and financial inclusion, finding that improvement in gender inequality enhances the effect of financial inclusion on both extreme and moderate poverty in developing countries. The effectiveness of financial inclusion is influenced by how equally the disadvantaged groups, particularly women, can access and utilize financial services. Our findings suggest that policymakers can use financial inclusion as a poverty reduction tool.