Westerlund Panel Cointegration Test Research Articles

AN IMPROVED ENVIRONMENTAL MANAGEMENT MODEL FOR ASSURING ENERGY AND ECONOMIC PROSPERITY

Energy efficiency contributes almost 40% of the potential for lowering greenhouse gas emissions. Addressing climate change while sustaining economic development is a crucial and complex task. The research examined energy efficiency's influence on economic growth and environmental sustainability in the top 10 nations with the highest energy efficiency levels between 1990 and 2019. The analysis used energy availability, security, and depletion as moderating factors. A comprehensive empirical investigation, including sophisticated econometric approaches, was conducted to achieve this objective. The findings of the Westerlund panel co-integration test imply long-term linkages among the variables under consideration. The research indicates a positive correlation between energy intensity, availability, and safety, as well as the levels of carbon dioxide emissions, ecological impact, and economic development. The decrease in energy availability was shown to have a detrimental effect on economic growth while positively correlated with both carbon dioxide emissions and the environmental impact. The results indicate that energy magnitude, availability, and security have an excellent effect on economic development but affect the surroundings. The empirical data suggests that economies must attempt to meet economic and ecological goals by separating energy use from economic growth. This task is performed via enhancements in energy utilization.

AN IMPROVED ENVIRONMENTAL MANAGEMENT MODEL FOR ASSURING ENERGY AND ECONOMIC PROSPERITY

Energy efficiency contributes almost 40% of the potential for lowering greenhouse gas emissions. Addressing climate change while sustaining economic development is a crucial and complex task. The research examined energy efficiency's influence on economic growth and environmental sustainability in the top 10 nations with the highest energy efficiency levels between 1990 and 2019. The analysis used energy availability, security, and depletion as moderating factors. A comprehensive empirical investigation, including sophisticated econometric approaches, was conducted to achieve this objective. The findings of the Westerlund panel co-integration test imply long-term linkages among the variables under consideration. The research indicates a positive correlation between energy intensity, availability, and safety, as well as the levels of carbon dioxide emissions, ecological impact, and economic development. The decrease in energy availability was shown to have a detrimental effect on economic growth while positively correlated with both carbon dioxide emissions and the environmental impact. The results indicate that energy magnitude, availability, and security have an excellent effect on economic development but affect the surroundings. The empirical data suggests that economies must attempt to meet economic and ecological goals by separating energy use from economic growth. This task is performed via enhancements in energy utilization.

Investigating the relationship between macroeconomic indicators, renewables and pollution across diverse regions in the globalization era

This paper delves into an econometric analysis to uncover the differences between Nordic European Countries - NEC (Norway, Denmark, Finland, Sweden) and South-East European Countries - SEEC (Greece, Bulgaria, Romania, Hungary). The focus is on exploring the interplay among electricity generation from Renewable Energy Sources (RES), CO2 emissions, urban population and GDP per capita in these two European regions. The study employs cross-sectional dependence, first and second-generation panel unit root tests, Pedroni panel and Westerlund panel cointegration tests, ARDL, Dumitrescu-Hurlin causality test to establish the relation among variables. The findings reveal that in both regions, CO2 emissions are significantly influenced by GDP per capita, urbanization and RES generation. Furthermore, urbanization plays an important role. When examining causality in SEEC, three bidirectional relationships are observed: urbanization and CO2, urbanization and GDP, urbanization and generation from RES, and two unidirectional causalities: CO2 and GDP, generation from RES and CO2. In contrast, for the NEC, there are two bidirectional causalities: urbanization and CO2, urbanization and generation from RES, and two unidirectional causalities: GDP and CO2, generation from RES and CO2. These results highlight the nuanced and varied nature of environmental and economic dynamics across various European regions.

Exploring the impact of economic growth and energy consumption on SO2 emissions in China based on the Environmental Kuznets Curve hypothesis

This study aims to analysis the influence of economic growth (EG) and energy consumption (EC) on sulfur dioxide emissions (SE) in China. Accordingly, this study explores the link between EG, EC, and SE for 30 provinces in China over the span of 2000–2019. This study also analyzes cross-sectional dependence tests, panel unit root tests, Westerlund panel cointegration tests, Dumitrescu-Hurlin (D-H) causality tests. According to the test results, there is an inverted U-shaped association between EG and SE, and the assumption of the Environmental Kuznets Curve (EKC) is verified. The signs of EG and EC in the fixed effect (FE) and random effect (RE) methods are in line with those in the dynamic ordinary least squares (DOLS), fully modified ordinary least squares (FMOLS) and autoregressive distributed lag (ARDL) estimators. Moreover, the results verified that EC can obviously positive impact the SE. To reduce SE in China, government and policymakers can improve air quality by developing cleaner energy sources and improving energy efficiency. This requires the comprehensive use of policies, regulations, economic incentives, and public participation to promote sustainable development.

Driving towards net zero emissions: The role of natural resources, government debt and political stability

Countries worldwide are pursuing measures for reducing emissions in response to the unprecedented impacts of climate change. Several crucial aspects need to be addressed for a carbon neutral future. This study investigates the influence of natural resources, government debts and political stability on achieving net zero carbon emissions. Utilizing cross-country data from 2001 to 2021, the analysis focuses on China, India, Pakistan, and Kazakhstan. The Westerlund panel cointegration test revealed a long-term equilibrium relationship between the variables, suggesting self-correction over time to maintain equilibrium. Our results showed a positive but statistically insignificant relationship between GD and transition to net-zero emissions. Political stability has a negative and statistically significant association with CO2 emissions. GDP has a non-linear impact on CO2 emissions, with increases leading to higher emissions until a certain GDP threshold. Natural resources show a direct relationship with CO2 emissions, indicating that natural resource exploitation adversely affects the transition to net-zero emissions. The Iterated Generalized Least Squares (IGLS) analysis confirmed the robustness of these findings, highlighting the complex interplay between economic, political and environmental factors in the transition to net-zero emissions and the need for balanced, sustainable approaches to economic growth and natural resource management. By shedding light on the critical factors influencing net zero emissions, this study provides insights for policymakers and stakeholders seeking to develop effective strategies for sustainable and environmentally responsible practices.

Modeling trade openness–unemployment nexus in sub-Saharan Africa: the role of asymmetries

PurposeWhile several existing panel studies have focused on the linear specifications of the nexus between trade openness and unemployment, nonlinear panel studies on this subject remain less explored. This paper examines the asymmetric nexus between trade openness and unemployment in 34 selected sub-Saharan Africa (SSA) countries for the period spanning from 1991 to 2020.Design/methodology/approachThe Pedroni and Westerlund panel cointegration tests were conducted to ascertain a long run relationship among the studied variables, while the panel nonlinear autoregressive distributed lag approach was applied to account for asymmetries.FindingsThe study revealed among other things that trade openness asymmetrically influences unemployment in the selected panel of SSA countries. In the long run, the positive shock in trade openness on unemployment is greater as compared to the negative shock.Research limitations/implicationsThe implications of this study include the need to (1) ensure the effective monitoring and supervision of trade flows in the sub-region so that their full benefits are maximized in terms of job creation and (2) ensure that a positive trade balance is maintained in the selected SSA countries.Originality/valueThe positive and negative shocks in trade openness are examined to determine their asymmetric effects on unemployment.

Revisiting resources extraction perspective in determining the tourism industry: Globalisation and human capital for next-11 economies

Natural resources and tourism sectors are vital to the growth of many nations and provide several benefits to host towns and nations. Consequently, economic revenue increases, thousands of jobs are created, a country's infrastructure is improved, and cultural participation between foreigners and locals is nurtured. This study examines the influence of economic growth (GDP), Human Capital Index (HCI), Globalization (KOFG), Political Risk (PRI) and Natural resource rent (TNRNTS) on the number of international tourists' arrival (TRSM) in Next-11 economies for 1990–2020. The panel is checked for various diagnostic checks followed by Westerlund panel cointegration test and method of moment quantile regression. The outcomes reveal that GDP, HCI, and KOFG significantly boost tourism, whereas higher political risk discourages international tourists' arrivals in Next-11 economies. Moreover, the panel causality test findings report a two-way causal association between GDP and TRSM, HCI and TRSM, KOFG and TRSM, PRI and TRSM. Any policy change in GDP, HCI, KOFG and PRI will imply Tourism sector of Next-11 economies. According to the empirical results of this work, it is proposed that these nations should further improve their participation in global trade activities through less stringent trade tax and enhance their political system to minimize the risk and activate the tourism industry.

The moderating role of ICT on the relationship between foreign direct investment and the quality of environment in selected African countries

This empirical study examines the role of information and communication technology (ICT) in the relationship between FDI and environmental quality for six leading African economies from 1970 to 2020. The second-generation tests are used to determine the stationarity level of the variables. Furthermore, the Westerlund panel cointegration test confirms cointegration among the variables. For long-run association, CS-ARDL, which resolved the consequences of heterogeneity and cross-sectional dependency is used. The results of the study reveal that ICT, FDI, economic growth, and financial development degrade environmental quality. The interacting effect of ICT and FDI (ICT*FDI) leads to escalation of CO2 emissions thereby deteriorating the quality of the environment. The study recommends that African countries should promote FDI to support the inflow of green technologies to enhance environmental quality. The implementation of environmentally sustainable technology would help improve the quality of the environment, increase sustainability in the long term and conserve resources for future generation.

The role of innovation in environmental-related technologies and institutional quality to drive environmental sustainability

In this study, we examine the long-run effect of environmental-related technological innovation, institutional quality, trade openness, energy consumption, and economic growth on CO2 emissions in APEC countries from 2004 to 2018. Firstly, panel unit root tests were used to explore the stationarity of each data series. The panel unit root test findings showed that all data series are stationary at the first difference. Second, the Westerlund panel cointegration test was used to deal with heterogeneity and cross-sectional dependence. Thirdly, the empirical findings from the augmented mean group (AMG) and common correlated effects mean group (CCEMG) estimators indicate that environmental-related technological innovation and institutional quality destructively affect CO2 emissions. In contrast, trade openness, energy consumption, and economic growth positively impact CO2 emissions. While causality analysis refers to the unidirectional causality runs from trade openness, energy consumption to CO2 emission and bidirectional causality relationships are between technological innovation, institutional quality, GDP, CO2 emission. Based on the findings, we proposed that APEC countries should raise investment in environmental-related technological innovation and improve the quality of the institutional environment to achieve sustainable development targets.

The need for energy efficiency and economic prosperity in a sustainable environment

Energy efficiency accounts for approximately 40% of the possibility of reducing greenhouse gases. Mitigating climate change while maintaining economic growth is a critical challenge. We investigated the impact of energy efficiency on economic growth and environmental sustainability in the ten most energy-efficient countries from 1990 to 2019, using energy access, energy security, and energy depletion as moderator variables. To this aim, a thorough empirical analysis was performed, and advanced econometric techniques were employed. The Westerlund panel co-integration test results indicate the existence of long-run relationships within the variables considered. Specifically, findings show that energy intensity, access, and security were positively associated with CO2 emissions, ecological footprint, and economic growth. At the same time, energy depletion was negatively associated with economic growth and positively related to CO2 emissions and ecological footprint. These findings demonstrate that energy intensity, access, and security positively impact economic growth and degrade the environment. This empirical evidence suggests that economies should simultaneously achieve economic and environmental goals by decoupling energy consumption from economic growth, which can be accomplished through improvements in energy efficiency.

An Empirical Analysis of Fishery Kuznets Curve Hypothesis: Evidence from Oecd Countries

Fish farms are occasionally built on delicate natural habitats, which can have severe environmental effects. Many industrial fishing methods also devastate aquatic habitats with the addition of overfishing practices. While environmentalists and academics have been concerned about the rapid extinction of fishery resources, the existing evidence is still inconclusive. This study examined whether catching overfishing could explain the environmental Kuznets curve (EKC) hypothesis among Organisation for Economic Cooperation and Development (OECD) countries. The study used four empirical strategies, which are framed in the panel time series analysis. (a) it assessed the prior behaviour of the variables based on second-generation panel unit roots tests using Cross-sectional ADF(CADF) and Cross-sectional IPS. (b) it also assessed the potential long-run relationship among the variables using the Westerlund Panel Cointegration test. (c) it explores the fishery Kuznets curve for OECD countries using Cross-sectional Dependency - Autoregressive Distributed Lag (CS-ARDL) and Augmented Mean Group (AMG) methodology. (d) it also examines the short direction of causality among the variables using the Dumitrescu – Hurlin Panel Granger Causality test, which is built on standardised panel statistics suitable for small sample properties, even in the presence of cross-sectional dependency. Five main findings can be deduced from our analysis. Firstly, the preliminary check confirms are only stationary only after the first difference. Secondly, the analysis also suggests that there is a long-run relationship among the variables. Thirdly, the findings showed that fish exploration has a negative effect on carbon emissions. Fourthly, the quadratic term of economic growth unidirectionally Granger causes CO2 emissions. Fifthly, we found evidence in support of the EKC hypothesis across OECD countries. Finally, our results highlighted the importance of fishery control in promoting environmental quality among OECD countries. We recommend reform in public policy that encourages sustainable fishing along with innovative research into modern fishing methods that reduces emissions. A better method of fishing can be developed with the support of cutting-edge research, which can also help reduce water pollution and the threat that overfishing poses to biodiversity.

THE NEXUS BETWEEN ECONOMIC GROWTH, BANKING SECTOR DEPTH, AND FOREIGN DIRECT INVESTMENT IN SELECT CENTRAL AND EASTERN EUROPEAN COUNTRIES

The goal of this research is to consider the influences of foreign direct investment and banking sector depth on economic growth, by analysing these factors in six Central and Eastern European countries (Bulgaria, Croatia, the Czech Republic, Hungary, Poland, and Romania) in the period between 2000 and 2018. Cointegration among the variables was confirmed using the Westerlund panel cointegration test. The outcomes of the panel autoregressive distributed lag model confirmed the positive influence of foreign direct investment and the negative impact of the banking sector depth on the economic growth in the observed countries. The results of the short-term analysis revealed the insignificant influence of the banking sector depth and the notable positive influence of foreign direct investment on economic growth.

Energy consumption, economic growth and energy transition in Africa: A cross‐sectional dependence analysis

AbstractBy adopting Westerlund's panel cointegration test, and the panel Granger, non‐causality test, this study investigates the long‐run and causal relationship between energy consumption and economic growth and energy transition in Africa. The test took into account cross‐sectional dependency for five African areas from 1990 to 2018. The models additionally contain labour and capital stocks to investigate causality and cointegration in the areas. The cross‐sectional dependency test shows that the African region sample is cross‐sectionally correlated. The panel cointegration test shows evidence of a long‐run relationship between economic growth, energy consumption, labour and capital stock in all areas. The non‐causality result shows a uni‐directional causality from economic growth to energy use.

Doğrudan Yabancı Yatırımlar ile Uluslararası Ticaret Arasındaki İlişki: N-11 Ülkeleri Örneği

Küresel ekonomide entegrasyon sürecinin hızlanması sonucunda ülkelerin ticari ve ekonomik ilişkileri artmıştır. Bu doğrultuda, küreselleşme neticesinde ülkelerin artan düzeyde gerçekleştirdikleri doğrudan yabancı yatırımların uluslararası ticaretleri üzerindeki etkilerinin analiz edilmesi, büyük önem taşımaktadır. Bu çalışma kapsamında N-11 ülkelerine gerçekleştirilen ve bu ülkelerden yurt dışına çıkan doğrudan yabancı yatırımların, bu ülkelerin ihracat ve ithalatları üzerindeki etkileri analiz edilmiştir. Değişkenler arasındaki uzun dönemli ilişkiler, Kao (1999), Pedroni (1999, 2004) ve Westerlund (2005) tarafından ortaya koyulan panel eşbütünleşme analizleri ile test edilmiştir. Sonuçlara göre, N-11 ülkelerinin uluslararası ticaretleri ile hem ülkeye giren, hem de diğer ülkelere gerçekleştirilen doğrudan yabancı yatırımlar arasında uzun dönemli bir ilişki bulunmaktadır. Ayrıca, değişkenler arasındaki nedensellik ilişkilerinin ortaya koyulması amacıyla gerçekleştirilen Dumitrescu-Hurlin (2012) panel nedensellik testi sonuçları, N-11 ülkelerine doğrudan yabancı sermaye girişleri ve ihracat ile ithalat arasında çift yönlü nedensellik ilişkisinin bulunduğunu göstermektedir. Öte yandan, N-11 ülkelerinde doğrudan yabancı sermaye çıkışlarından ihracat ile ithalata doğru ise tek yönlü bir nedensellik ilişkisinin olduğu tespit edilmiştir.

Examining the impact of cargo and ancillary revenues on net profit for full service carrier airlines

In this study, the relationships between cargo revenues, ancillary revenues and net profitability of airline companies were examined in the examples of three full-service airline companies (Turkish Airlines, American Airlines, Delta Air Lines). Methodologically, a logarithmic econometric model was used in which cargo revenues and ancillary revenues were included as independent variables and net profit as the dependent variables. The data used for the period 2014Q1-2019Q4 were collected from the annual reports on the official websites of related airline companies and The International Air Transport Association (IATA). EViews 10 and STATA-15 versions, which are the most modern econometric analysis programs that can be used to control the stationarity, were used in the analysis of the data. In addition to econometric analyzes and general statistics, Cross Section dependency tests, CADF second-generation unit root tests, Delta slope homogeneity tests, Panel cointegration analysis, Westerlund Panel cointegration tests and Dumitrescu Hurlin Panel Causality tests and Breusch Pagan LM Tests were also performed. The study revealed that there is cointegration between cargo revenues, ancillary revenues and net profit, and there is a one-way causality relationship from both cargo revenues to net profit and from ancillary revenues to net profit. The study also indicated a positive correlation between cargo revenues and ancillary revenues and net profit. In other words, cargo revenues and ancillary revenues have a positive effect on the net profit of airline companies. In addition, the study found that aviation ancillary revenues provide an important resource for airline companies; furthermore, two US companies are among the top three companies with the highest revenues in the world in terms of cargo and ancillary revenues; also showed that Turkish Airlines' ancillary revenues are lower than those of these two US companies. On the other hand, the study showed that the contribution of Turkish Airlines cargo revenues to net profit is much higher than the other two companies.

The effect of carbon dioxide emission, GDP per capita and urban population on health expenditure in OECD countries: a panel ARDL approach

ABSTRACT The dramatic growth in health expenditures is an important health policy concern worldwide. Therefore, understanding the factors that increase health expenditures provides policy makers with evidence for decision-making. We aim to examine long-term effects of carbon dioxide emission, urbanization rate and GDP per capita on health expenditures. This study investigates the effect of carbon dioxide emission, urban population, and GDP per capita on health expenditure for 21 OECD countries over the period 1992–2018. Panel ARDL Approach and Gengenbach, Urbain and Westerlund Panel Co-integration Test have been used in the article. Test results indicate the long-run relationship among health expenditure and carbon dioxide emission, urban population, and GDP per capita. Effect of carbon dioxide emission (CO2), urban population, and GDP per capita is significant and positive on health expenditure. Rapid economic growths of OECD countries recently and environmental pollution have increased health expenditures in the long term.

Regional Economic Integration and Its Impact on Income Distribution and the Poverty Level: The Case of the WAEMU Zone

Abstract This study investigated the influence of regional economic integration (REI) on poverty reduction and the revenue distribution in the West African Economic and Monetary Union (WAEMU) over the period 1994–2018. The second generation panel unit root tests and the Westerlund panel cointegration test were employed for preliminary analysis. The elasticities of the variables were investigated using the Pooled Mean Group (PMG) approach. The results showed that REI reduced income inequality and increased the poverty rate. Moreover, the causal relationship revealed the presence of a bidirectional relationship between REI and poverty. The feedback causal effect operated between REI and remittances, while unidirectional causality runs from REI to income inequality, from economic growth per capita to income inequality, from remittances to poverty, from the control of corruption to income inequality, and from remittances to economic growth. Consequently, the study recommends an easing of governmental regional integration restrictions and provision of subsidies that help to increase the volume of trade and financial development while reducing poverty in the union.

Technological change and unemployment nexus from a gender perspective: empirical evidence from a panel cointegration approach

This study investigates the long-run relationship between technological change and unemployment, focusing on a gender perspective in developed economies. Considering the obstacles women face in accessing labor markets, this study aims to empirically combine the technological change and unemployment nexus with a gender perspective in 20 OECD economies from 1985 to 2019 by using multifactor productivity (MFP) as a proxy for technological change. The findings from Westerlund Panel Cointegration Test and Pedroni's Panel-Dynamic Ordinary Least-Squares (PDOLS) estimator indicate the presence of a long-run relationship between MFP and unemployment rate with diversified gender effects. Even though MFP affects total and male unemployment significantly and negatively in the long run, there is no significant effect on female unemployment for the whole panel. However, the findings by economies are diversified and they indicate the presence of technological unemployment for women in some economies. Thus, the empirical results clearly show that the long-run relationship between MFP and unemployment is affected by gender differences.

Examining the relationship between tourism and CO2 emissions: evidence from APEC region

ABSTRACT The paper investigates the relationship between tourism, energy consumption, trade openness, economic growth, and CO2 emissions for 20 economies of the APEC region from 1995 to 2017. This paper employs cross-sectional dependence with heterogeneous panel estimation techniques. The data confirms cross-sectional dependence, and the CIPS panel unit root test shows that the variables are stationary at their first differences. The Westerlund panel cointegration test affirms a long-run relationship among the variables. Tourism and trade openness have significant positive effects on CO2 emissions while economic growth and energy consumption adversely affect CO2 emissions in the long-run. The panel non-causality test reveals that there is a one-way causality running from tourism to CO2 emissions and economic growth to CO2 emissions.

Exploring the role of education on environmental quality and renewable energy: Do education levels really matter?

The current study examined the impact of different levels of education on environmental quality and renewable energy. Panel data was drawn from the World Bank and OECD databases for 20 OECD countries for the period 1997–2019. Rigorous analytic procedures were employed to better address the methodological issues of existing literature for the analysis of panel data. In this regard, cross-section dependency and heterogeneous structure of the panel data were considered. Accordingly, Gengenbach, Urbain, and Westerlund's panel cointegration test was employed to examine whether there was a long-term relationship between the variables. Fully Modified Ordinary Least Square and Mean Group Dynamic Least Squares were employed to test the robust impact of independent variables on the dependent variable in the long run. Lastly, Dumitrescu & Hurlin's Granger non-causality test was conducted to determine the direction of the relationship between variables. Findings showed that while lower-level education and per capita GDP significantly increased CO2 emissions, higher education significantly decreased it. The CO2 emissions and per capita GDP posed significant negative influences on renewable energy. On the contrary, while both levels of education had positive influences, higher education appeared to be the most influential variable on renewable energy. The causality analyses yielded bidirectional causality relationships between CO2 emissions and renewable energy, low-level education, and higher education; conversely, unidirectional causality relationships between CO2 emissions and per capita GDP. Collectively, the study highlighted the significance of a highly educated workforce for promoting and creating a sustained environment by reducing CO2 emissions and increasing renewable energy utilization.