Regressive Distributed Lag Model Research Articles

Higher Education and Economic Growth Nexus: Evidence from India

The study attempts to explore the causal relationship shared between Indian economic growth and higher education sector. Time series data for the period 1980-81 to 2021-22 has been considered for the analysis by making use of Auto Regressive Distributive Lag Model.

Interplay of Foreign Direct Investment, Remittances, and Economic Growth: Insights from SAARC Countries

The current study focuses on finding and analyzing the nexus between remittances, foreign direct investment, and economic growth in SAARC countries. This study uses secondary balanced data of selected SAARC countries for the years 2000 to 2019. This study uses gross domestic product i.e., GDP, which serves as the proxy of economic growth, as the dependent variable. The core independent variables of this study include (FDI) foreign direct investment and remittances (RMTN). Additionally, gross capital formation (GCF) and carbon dioxide emissions (CO2) are the other two independent variables in this study. For the proxy for environmental degradation the study uses data of CO2 emissions. The data is collected from the world development indicators, WDI. The study focuses on how all the independent variables affect the growth of economy in selected SAARC countries which include Pakistan, India, Bangladesh, Sri Lanka, and Nepal. The study applies cross sectional dependence test, panel cointegration test, unit root tests, and PARDL (panel auto regressive distributed lag model), also called pooled mean group methodology, to obtain empirical estimates. The results of PARDL show that FDI, RMTN, and GCF are all positively and significantly related to GDP. This means that GDP or alternatively economic growth, is improving with rise in FDI, RMTN, and GCF in selected SAARC countries. The results show that CO2 emissions have a negative significant impact on GDP i.e., increase in pollution levels is harmful for the growth of the selected economies.

Has Bangladesh’s Economic Progress Impacted by Carbon Emissions and Human Capital in the Long Run? An Econometric Auto-Regressive Distributed Lag (ARDL) Approach

The aim of this study is to investigate the outcome of human capital (proxied by government expenditure on education (GEE) and life expectancy (LE), carbon emission (CO2), domestic credit growth (DCG), labor force participation rate (LFPR) and remittances (RMT) on Bangladesh's economic progress as indicated by GDP per person. From 1990 to 2018, data for the analysis were used from the world development indicator. ARDL (Auto -regressive distributed lag model is used for the analysis and the cointegration test(F-bound test ) reveals that the value of F-statistics (32.83) is greater than I(1) bound(4.26) statistically 1 % significant level that confirms a sustained relationship throughout time between the variables being studied. Empirical results reveal that DCR, LE and RMT have significant and positive long-term effect on GDPPC. Conversely, carbon emission, GEE, LFPR and GCF have a long-term negative effects.

Determinants of Financial Shortfalls in State-Owned Railway Systems: An Ardl Approach for Sri Lanka Railways

Sri Lanka Railways (SLR) has been experiencing a financial shortfall since the 1940s, characterised by operational expenditure exceeding total revenue. This study aimed to identify the critical determinants of the financial shortfall of Sri Lanka Railways (SLR) using an econometric approach. Employing a quantitative methodology, the study utilised secondary and manipulated data from 1977 to 2022 to examine the effects of four key variables: revenue shortfall from fare revisions (FRFR), subsidised season tickets (FRSS), freight transport volume (FTK), and total wage bill (WB), incorporating the general price level (CCPI) to account for inflation. The regression analysis, using the Auto Regressive Distributed Lag Model, identified a short-run relationship between the financial shortfall (LFS) and lagged variables, including the volume of rail freight transport (LFTK), total employee wage bill (LWB), and the general price level (LCCPI). A long-run relationship was found among revenue shortfall from fare revisions (LFRFR), LWB, LCCPI, and LFS. The findings highlight the significant impact of aligning railway fares with bus fares and managing employee expenses on SLR's financial shortfall. Additionally, the revenue shortfall from subsidised season tickets showed a significant relationship at a 10% significance level, both short-term and long-term. The study underscores the necessity of revising railway fares in line with bus fares to enhance revenue and ensure financial sustainability. Optimising employee-related costs through effective management and reviewing the subsidy structure for season tickets are also recommended. Furthermore, investment in capacity and facility development for freight transport is crucial for mitigating long-term financial shortfalls.

Does Price Level Increase Income Inequality in Pakistan? A Disaggregated Analysis

The crucial emphasis of economic policies is to enhance socio-c wellbeing of the people in an economy. If the society is economically polarized it hampers the impact of economic policies. The crucial economic problem about which fewer economists gutsy to talk is income inequality in the world because it is the answer to a pinching question that who will benefits from the economic growth in an economy. Despite the generation of trillions of dollars each year in the world, a huge population is deprived of basic needs such as food, sanitation, security, health and education etc. When it comes to the effect of inflation on masses the situation further aggravates. Escalated price levels deprive more people from essential goods and lead towards increasing income inequality. This study has tried to estimate the impact of inflation on income distribution in Pakistan. The data was collected from Pakistan Economic Survey and Handbook of Statistics by SBP for a period of 1990 to 2022. The present study has applied Auto Regressive Distributed Lag Model (ARDL) to estimate the linkage among price levels and income inequality in Pakistan. The findings of the study have revealed both positive and negative linkage among constituents of the CPI and the income inequality. The novelty of this study is on two grounds. Firstly, the study has dissolved Consumer Price Index (CPI) into its constituents, and their Impact on income inequality has been examined, as far as finest information available to us this has never been investigated in Pakistan before. Secondly, the study has applied two proxies the GINI coefficient and Mean Log Deviation (MLD) to estimate income inequality. Thirdly, we have applied the data splicing method[1] to make one base year of CPI from various base years that has been changed over the past years in Pakistan. The study offers some useful policy implications for policy formulation in Pakistan.

Nexus Between Economic Development and Population: Empirical Evidence from Pakistan

The article explores the real-world connection involving population increase and economic development in Pakistan. This research examines the long-run and short-run implications of demographic parameters like population expansion, expectancy of life and fertility rate on the advancement of the Pakistani economy. The theoretical foundation of the study is built on demographic change, which takes into account life expectancy and the birth rate in the production function, as well as human capital development to establish research goals. The current study used Pakistan's time-series information from 1981 to 2021. The dataset was retrieved using the World Development Indicator engaging the Auto Regressive Distributed Lag model (ARDL) to figure out the short and long-run interactions between prosperity and population increase. The outcomes demonstrate an adverse and substantial association between the expansion of the population with the growth in the economy. On the contrary, life expectancy has a large and favourable impact on the development of the economy. According to the results, population growth has a detrimental impact on the development of the economy; nevertheless, appropriate usage of these assets must be made. Whenever a nation maintains an extensive population and fails to utilize its strength effectively, then it will become a strain on the economy. The authorities ought to implement comprehensive strategies for improving employment opportunities in the entire nation. Though Pakistan possesses an intelligent workforce, the challenge remains how to harness its potential profitably.

EFFECT OF FOREIGN DEBT ON LITERACY RATE IN KENYA

<p>This paper investigated the effect of foreign debt on literacy rate in Kenya. In the fiscal year 2021/2022, public debt as a percentage of gross domestic product was 67 per cent, which was higher than the debt ceiling of 55 per cent of gross domestic product. External debt accounted for 52% of this total debt as of 2022, exhibiting a consistent increase since 2013, surpassing domestic debt. The burden of servicing foreign debt may subsequently pose a challenge to the government in fulfilling its commitments in the education sector. Consequently, lower literacy rates impede a nation's socio-economic progress as literacy is critical for promoting peace and adopting new technologies, both of which drive development. This study used the primary school completion rate as a proxy for literacy. Secondary data published in international and national organizations from 1990 to 2021 was employed for analysis. The study’s theoretical framework was pegged on a consumer utility maximization of a merit-good education constrained by the government's financing. The relevant time series and diagnostic tests were performed on the data series and models. Auto Regressive Distributed Lag model was used for estimation using ordinary least squares. The findings were that foreign debt hurt literacy rate in the long run and had a positive effect in the short run. The study recommends prudent management of foreign debt, so that it can facilitate improvements in the education sector.</p><p><strong>JEL:</strong> I25; H63; O55; C22</p><p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/soc/0771/a.php" alt="Hit counter" /></p>

Revisiting openness-growth nexus: Panel data estimates for selected developing Asian countries

Trade openness is viewed as a way for Asian countries to progress economically and socially. Therefore, determining how trade affects economic growth is crucial for society, particularly for emerging economies. This paper provides empirical evidence on the issue of how openness to trade affects economic growth. A sample of 22 selected Asian countries has been taken as a balanced panel. To carry out the analysis, Auto Regressive Distributive Lag Model (ARDL) on annual data from 1990 to 2020 is used. To select between Pooled Mean Group (PMG) Mean Group (MG) and Dynamic Fixed Effect (DFE) estimators of ARDL, the Hausman test is used. PMG turns out as a better estimator. PMG estimation confirms that trade openness and economic growth exhibit a positive and statistically significant relation in the long run, however, short-run results lack significance. The study concluded with the recommendation that policymakers should adopt and implement an optimal trade policy. The optimal trade policy suggests the sample countries be more open to trade because it may result in higher long-run economic growth.

Analysing the nexus between income inequality and economic growth in Ethiopia: using the non linear auto regressive distributed lag model

Analysing the nexus between income inequality and economic growth in Ethiopia: using the non linear auto regressive distributed lag model

Can International Business Perspective Measure Sustainable Development of BRICS Countries? A Panel Data Analysis

The level of international business is highly dependent on the numerous macroeconomic and sustainable development factors that play their respective roles in defining a developing nation's economic progress. While examining the long-term growth of an economy, the consistency of the performance of the various elements in terms of their sustainability is a crucial matter to investigate. Moreover, it is known that the sustainable development of an economy is strongly associated with environmental impacts. Finally, the focus on new development patterns must be the highest concern for emerging economies. Considering this, the current study speculates on the relationship between foreign direct investment and the interaction effect of carbon emissions and poverty with control variables such as per capita income and education in BRICS economies. It concentrates on panel data ranging from 1993 to 2019 to explore the association among the said variables. It identifies the unique and definite macroeconomic parameters that are crucial for encouraging foreign direct investment in different countries. Applying the Panel Auto Regressive Distributed Lag Model, the study finds a positive interaction effect between carbon emissions and poverty that focuses on improving foreign direct investment in the long run. In the short run, an increase in per capita income always proves that BRICS will demonstrate less dependence on FDI net flows. The study also concentrates on the unit root measurement of the data by applying Panel Unit Root Test. Finally, to check the direction of causality, Pairwise Dumitrescu Hurlin Panel Causality Tests have been performed. The most recent update from these countries demonstrates that the strategy for achieving future sustainable economic growth is clear and swift. Hence, it emphasises the requirement of separate and exclusive policy-making to promote long-term sustainable economic growth in BRICS.

Analysis of Variation in Foreign Inflows by Different Categories of Foreign Portfolio Investors

The liberalisation of Indian financial markets has smoothened the capital flows of international institutional investors, resulting in rising foreign investor participation in the domestic equity and debt markets. Since the reforms of the 1990s, India has become one of the favourite investment hubs of foreign institutional investors (FIIs) across the globe. The research aims to analyse the variation in contribution to foreign inflows by the three different categories of foreign portfolio investments (FPIs) and the determinants of inflows of the categories of FPIs. The study is based on the use of secondary data collected from the National Securities Depository Limited and the Securities Exchange Board of India. One-way ANOVA has been employed to examine the variation in inflows by different categories of FIIs. Autor regressive distributed lag model has been used to understand the factors determining the inflows of FPIs. The results of the study revealed that there exists variation in the inflows of investments among the different categories of FIIs. The variation in inflows by different categories into equity instruments was significant, while the inflows into debt instruments were not significant. Furthermore, the highest inflows were seen from the second category of FIIs. JEL Codes: C32, G2

THE EFFECTS OF FOREIGN DIRECT INVESTMENTS ON HUMAN CAPITAL IN THE WEST AFRICAN ECONOMIC AND MONETARY UNION (WAEMU)

Since the end of the 1980s, most developing countries, particularly those in the WAEMU, have resorted to foreign capital, notably Foreign Direct Investment (FDI) as a new source of financing. The general observation is that WAEMU countries have difficulty mobilizing and taking advantage of the opportunities offered by foreign capital to initiate their development. The aim of this research is to show the contribution of FDI to the human capital accumulation in WAEMU countries. So, the effects of foreign direct investment and public education spending on human capital are analyses. The data used cover the period 2000-2020 where countries have implemented structural adjustment programs. In order to highlight the effects of foreign direct investments on human capital in the WAEMU, after a theoretical and empirical discussion on foreign direct investments on human capital, an Auto Regressive Distributive Lag (ARDL) model was constructed. The results show that foreign direct investment have a positive significant impact on human capital, which, in terms of economic policy implications means that FDI are means of improving the accumulation of human capital in WAEMU.

Public Debt and Infrastructural Development in Nigeria; An Empirical Investigation

This study examines the impact of public debt on infrastructural development in Nigeria from 1990-2022, as debt load has become one of the most critical impediments limiting recovery and growth on the continent, but if these debts both internally and externally sourced are being channelled and utilized effectively to improvement of public infrastructure might influences level of the economy, hence contentious in macroeconomics theories. Relying on data from the World Bank Development Indicators and the outcome of various pre-estimation tests ; the Augmented Dickey Fuller and Phillip Peron method were employed to determine the stationarity trend in the data, the correlation analysis to test the relationship between the variables, the study adopted the Auto Regressive Distributive Lag Model (ARDL) estimation technique to determine the relationship between public debt (proxied by domestic debt and external debt) and capital expenditure a proxy for public infrastructure in Nigeria. The long-run results revealed that external debt and internal debt is insignificant but have positive impact of capital expenditure in Nigeria, which implies the misallocation of funds to the development of infrastructures in the country. The study further revealed that the debt service payment and Inflation rate has negative impact of the capital expenditure at the current Lag but has positive association at Lag 1 and not statistically significant at both Lag. The study conclude that public debt positively impact infrastructural development in Nigeria. The research recommend that government should ensure that debts incurred are channel towards the specific and identified infrastructural productive projects and not just for solving short run problems

Government Expenditure and Sap in Nigeria: An Empirical Perspective

This study examines the impact of government expenditure for infrastructure on economic growth before and after the introduction of SAP in Nigeria, using annual data for the period of 1970 to 2022. Data were sourced from CBN Statistical Bulletin on government spending on transport, communication, health, education, and utilities sectors. Augmented Dickey-Fuller Test and Auto Regressive Distributed Lag Model were employed as analytical tools for the study. The results show a positive short run effect of growth rate of government spending on transportation sector, communication sector, health sector, education sector and utility sector on economic growth in Nigeria during the pre-SAP and SAP periods. The opposite becomes the case to cover from the post-SAP period till date not minding the period anchored a lot more of government policies targeted at the economic development of Nigeria. The study therefore recommends that government should ensure that what is annually budgeted for infrastructural development in the country should be judiciously and economically spent in other to attain economic growth.

Relationship between organic agriculture and export of olive oil in Tunisia via an ARDL model

This paper aims to study the presence of the relationship between the organic olive-growing area and the export of olive oil in the Tunisian economy; such as the producer price index for the case of olives and the exchange rate. A cointegration approach through an Auto Regressive Distributed Lag model (ARDL model) was mobilized for the period (2001-2021). The test results show the existence of a significant short and long-terms cointegration relationship between the olive area, the exchange rate and the export of olive oil. Similarly, unidirectional causal relationships have also been determined between the producer price index and the olive area on the one hand, a unidirectional causal relationship is caused by the exchange rate on the olive-growing area and this exerts unidirectional causality on the export of olive oil. The promotion of organic farming in Tunisia depends not only on the development of organic areas but also on the economic situation of the country. Thus, it can be concluded that limiting the depreciation of the national currency and improving the producer price index can improve the exchange rate and contribute positively to the development of organic olive areas and the export of olive oil in general

AN ARDL ANALYSIS ON THE EFFECT OF OIL PRICE INSTABILITY ON FOREIGN RESERVE IN NIGERIA (2015-2022)

The paper employed auto regressive distributive lag (ARDL) model to examine the effect of oil price instability on foreign reserve in Nigeria using recent monthly time series data over the period of 2015-2022. The results of ARDL Bound cointegration indicated a presence of cointegration in the model which confirms an existence of long run relationship between oil price instability and foreign reserve. The findings of ARDL long run analysis show that oil price instability have negative and significant effect on foreign reserve. Likewise, inflation rate has a negative and significant effect on foreign reserve. On the other hand, oil revenue is found to have a positive and significant effect on foreign reserve. Furthermore, the ARDL short run estimates indicate that an existence of a short run relationship between oil prices and foreign reserve. From the findings, the coefficient of error correction term indicates that about 30% of the discrepancy between the actual and the long run or equilibrium value of foreign reserve is corrected or eliminated each month. Furthermore, the results of granger causality test indicate a unidirectional causality between oil price instability and foreign reserve. Based on the empirical findings, the paper suggests the need for the policy makers to adopt policy framework that will get rid of corruption and ensure macroeconomic stability. Policymakers should also take steps to mitigate the negative effects of oil price fluctuations on foreign reserve in Nigeria.

Assets Management Corporation and Bank Stability in Nigeria

In this study, the correlation between Assets Management Corporation of Nigeria (AMCON) and bank stability was examined. The study used panel data collected from annual reports of five Deposit Money Banks (DMBs) for the period 2011 to 2020. The auto regressive distributed lag model (ARDL) was used to analyse data collected. Findings from the study revealed that bank’s capital adequacy has positive and significant impact on DMBs’ performance in Nigeria. Additionally, non-performing loans and liquidity ratio have positive and significant effect on DMBs’performance in Nigeria. To decrease the occurrence of nonperforming loans, it is recommended that banks continuously assess and enhance their loan risk management practices. This can be achieved through the implementation of robust credit risk management systems and the use of credit scoring techniques. Also, banks should diversify their loan portfolios to reduce their exposure to single-borrower concentrations and sector-specific risks. Meanwhile, Banks should improve their internal controls and governance practices to enhance their overall risk management capabilities and ensure compliance with regulatory requirements..

Agricultural Productivity and Poverty Alleviation in Nigeria

The study is designed to examine the relationship between agricultural productivity and poverty alleviation in Nigeria from 1981 to 2020. To achieve this objective, secondary data were collected on the relevant variables namely per capita income, which was used as a proxy for poverty, agricultural output, agricultural loans to individuals, and the real gross domestic product. The data used were sourced from the Central Bank of Nigeria (CBN) statistical bulletin and the World Bank database. The study adopted the Philips Perron test in testing for stationarity and the variables had a mixed order of integration. Auto Regressive Distributed Lag Model (ARDL) was adopted in carrying out the analyses after cointegration was established using the ARDL bounds test. The result of the study showed that an increase in agricultural output improved per capita income, which reduced the level of poverty. The model was also found to have no autocorrelation implying that the findings of the study are suitable for predictions and forecast. The study concluded that poverty can be alleviated through the improvement of the agricultural sector. The study also recommended among other things that the government should embark on policies that can strengthen the agricultural sector in Nigeria.

Increasing ecological sustainability using the combinations of technologies to produce power

The study attempts to analyze the impact of hybrid energy systems on environmental sustainability in the context of the circular economy network. The hybrid energy sources follow the principle of circular economy, which aims to reduce raw material use and waste which is very fruitful in promoting environmental sustainability. However, the study uses quarterly data from Pakistan from 2011Q1 to 2020Q4 to accomplish the proposed study objective. The study constructs 5 hybrid systems of energy to analyze the impact and applies Auto Regressive Distributive Lag Model (ARDL) to estimate the results. It is found that electricity generation through solar photovoltaic (SPV), wind turbine (WND), hydroelectricity (HYDE) and nuclear power generation (NPG) play a positive role in increasing environment sustainability. The results explain that SPV, NPG, and HYDE contribute 2.29%, 2.04%, and 0.42% to environmental sustainability, respectively. Hybrid systems of energy (Hybrid 1,2,3,4 and 5) positively impact ecological sustainability, but the intensity of each hybrid system in sustaining the environment is different. Among five hybrid systems, the hybrid-5 (SPV-WND-HYDE-NPG) energy system is more environmentally friendly and has the highest contribution towards environmental sustainability. The study suggests incorporating hybrid energy systems provides the means of transition toward a circular economy, ultimately promoting ecological sustainability. The study proposes to the officials of the Pakistani government and policymakers to initiate effective policies to encourage hybrid energy systems because the significance of hybrid systems ensures a low carbon economy and makes a path towards sustainable economic development.

Impact of Budget Deficit and Inflation on Stock Market Returns: An Empirical Study of Pakistan

This paper examines the impact of budget deficits and inflation on stock returns in the context of Pakistan. The paper further investigated whether the stock market is the true indicator of the economy and whether the economy is strongly affected by budget deficits and inflation. Budget deficit and inflation both correlate with each other (Laopodis, 2006) and harms stock market returns. This paper tested the effect of the past seventeen year’s budget deficit and inflation on stock returns by using the unit root test and auto regressive distributive lag (ARDL) model, the results and findings of the research show a significant negative impact of budget deficit on stock returns and insignificant negative impact of inflation on stock market returns.