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Purpose: The present study aims to investigate the validity of the Environmental Kuznets Curve (EKC) by exploring the role of various economic factors including economic development, foreign investment, human capital, energy dependency, financial development (FD), etc., in CO2 emissions. Design/methodology/approach: For empirical analysis, the samples for the years 2001–2019 of six GCC region countries that apply the fully modified ordinary least squares model were utilized. Findings: The statistical results show that economic development, foreign investment, energy dependency, human capital and oil rents have a direct impact on CO2 emissions, whereas trade liberalization and FD have an indirect impact. Nonetheless, the empirical analysis rejects the EKC hypothesis in the set of GCC region countries. The empirical findings in connection to the basic premises of the EKC model are found to be statistically constant for the linear relationship. The GCC region is rigid regarding CO2 emission because of its reliance on main energy sources like oil and gas. Research limitations/implications: The current analysis directs the policy recommendations about environmental sustainability to environmental economists and other policymakers. The development of such policy instruments as the adoption of contemporary technology and reduced reliance on fossil fuels is advised to mitigate the negative externalities of multiple economic factors. Similarly, future studies should focus on trade liberalization and FD, both of which have a declining trend in CO2 emissions. Originality/value: The present study is innovative by means of testing the EKC model and exploring how other factors related to CO2 emissions in the GCC region. [ABSTRACT FROM AUTHOR]

Purpose: The "resource curse phenomenon" has received a lot of attention from researchers; however, there has not been any sound explanation to back this phenomenon since the main reason why natural resource should restrain economic growth instead of boosting economic growth remains unanswered. This paper contributes to literature on "resource curse hypothesis" by examining the role of government effectiveness in influencing the impact of gas resource rent on economic growth. Design/methodology/approach: The study adopted the Cobb-Douglass production and incorporated gas resource rent, institutional quality (government effectiveness), inflation and exchange rate as additional variables that influences total output (gross domestic product). The author estimated the empirical form of the Cobb-Douglass production using autoregressive distributed lag model (ARDL) and Toda and Yamamoto (1995) as the main estimation strategies while other time series approaches were used as a robustness check. Findings: The estimates from the ARDL short-run and the long-run dynamics suggest that the direct impact of gas resource rent on economic growth was positive but not statistically significant. At the same time, the interacting of gas resource rent and government effectiveness showed a positive and statistically significant effect of nearly 0.4123 and 0.8724 on economic growth in the long run and short run, respectively. The results from the Toda and Yamamoto (1995) also indicated that economic growth has a strong influence on gas resource rent while government effectiveness drives economic growth and not vice versa. Research limitations/implications: The findings from this study imply that government effectiveness plays a crucial role in averting the "resource curse phenomenon". Hence, improving government effectiveness and efficiency through minimizing corruption among state institutions would be imperative in curbing the "resource curse phenomenon" in developing countries. Originality/value: The influential role of government effectiveness on the relationship between gas resource rent on economic growth is examined. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to determine how macroeconomic performance work with institutional quality influences divestment of foreign direct investment (FDI) in Sub-Saharan Africa, in the short and long run. Design/methodology/approach: This paper investigates divestment of FDI in Sub-Saharan Africa, within the period 1980–2020. The investigation is undertaken by first comparing the trend with what is obtained in other economic regions of the world. The factors behind the divestment are subsequently investigated, using the vector error-correction model. Findings: In the comparative analysis, Sub-Saharan Africa and other regions are observed to have witnessed sustained divestment in recent years. The estimation results of the model reveal that macroeconomic performance and institutional quality are the predominant drivers behind the divestment. Research limitations/implications: The findings, however, do not conform to the neoclassical theory that lays emphasis on investment return as the fundamental factor influencing investment. Long-run structural stability is also established; hence, the results may be considered suitable for predicting future divestment in the region. Practical implications: In view of the empirical findings, macroeconomic performance and institutional quality need to be improved to ameliorate FDI divestment in Sub-Saharan Africa. Originality/value: There is paucity of research works on divestment of FDI in Sub-Saharan Africa. Again, there is paucity of works on how macroeconomic and institutional conditions work together to influence divestment. This study provides some evidence to bridge the perceived gaps. [ABSTRACT FROM AUTHOR]

Purpose: The paper aims to examine the effects of floods on economic growth in India from 1980 to 2019, taking into account the role of foreign direct investment (FDI) inflows and foreign aid. Design/methodology/approach: The study uses augmented Dickey–Fuller (ADF) and Phillip–Perron (PP) tests to determine the stationarity of the variables. Several models, including autoregressive distributed lag (ARDL), fully modified ordinary least square (FMOLS), dynamic ordinary least square (DOLS) and canonical cointegration regression (CCR), are used to examine the impact of floods on economic growth. Findings: The bounds test determines the long-term relationship between floods, FDI inflows, economic growth and foreign aid. According to the ARDL and FMOLS models, floods have a negative long-term and short-term impact on India's economic growth. Furthermore, FDI inflows and foreign aid are beneficial to economic growth. The findings of the ARDL and FMOLS models are confirmed by the DOLS and CCR models. Granger causality establishes a unidirectional causality that extends from floods to economic growth. Further diagnostic tests show that the estimates are free of heteroskedasticity, serial correlation and parameter instability. Practical implications: Indian government needs to invest more in research and development on flood management techniques. Institutional strengthening is also required to implement pre- and post-flood prevention measures properly. Sound disaster financing strategy and proper water bodies management should be prioritised. Foreign investment opportunities should be encouraged by strengthening international relations. Originality/value: This is the first time-series study that analysed the effects of floods on economic growth in India. Moreover, the paper contributes to floods literature by applying several econometric models for robustness check. [ABSTRACT FROM AUTHOR]

Factors for FDI divestment Several factors contribute to FDI divestment in developing countries. We are delighted that after many concerted efforts, the special issue assigned to us on "FDI [Divestment] Inflows and Outflows in Developing Economies" has seen the light of the day. [Extracted from the article]

Purpose: The purpose of this research is to examine the validity of the agriculture-induced environmental Kuznets curve (EKC) hypothesis with evidence from an autoregressive distributed lag (ARDL) approach with a structural break including real income and energy consumption in the model for Ghana over the period 1980–2014. Design/methodology/approach: The ARDL approach with a structural break was used to analyze the agriculture-induced EKC model which has not been studied in Ghana. The dynamic ordinary least squares (DOLS), canonical cointegration regression (CCR) and fully modified ordinary least squares (FMOLS) econometric methods were further used to validate the robustness of the estimates, and the direction of the relationship between the study variables was also clarified using the Toda–Yamamoto Granger causality test. Findings: The ARDL results revealed that GDP, energy consumption and agricultural value added have significant positive effects on CO2 emissions, while GDP2 reduces CO2 emissions. The Toda-Yamamoto causality test results show a bidirectional causality running from GDP and energy consumption to CO2 emissions whereas a unidirectional long-term causality runs from GDP2 and agriculture value-added to CO2 emissions. Practical implications: This finding validated the presence of the agriculture-induced EKC hypothesis in Ghana in both the short run and long run, and the important role of agriculture and energy consumption in economic growth was confirmed by the respective bidirectional and unidirectional causal relationships between the two variables and GDP. Thus, a reduction in unsustainable agricultural practices is recommended through specific policies to strengthen institutional quality in Ghana for a paradigm shift from rudimentary technology to modern sustainable agrarian technologies. Originality/value: This study is novel in the EKC literature in Ghana, as no study has yet been done on agriculture-induced EKC in Ghana, and the other EKC studies also failed to account for structural breaks which have been done by this study. This study further includes a causality analysis to examine the direction of the relationship which the few EKC studies in Ghana failed to address. Finally, dynamic ordinary least squares (DOLS), canonical cointegration regression (CCR) and fully modified ordinary least squares (FMOLS) methods are used for robustness check, unlike other studies with single methodologies. [ABSTRACT FROM AUTHOR]

Purpose: First, the current study contributes to the available debate by reinvestigating the impact of economic growth (EG), foreign direct investment (FDI), technological innovation (TI) and inflation (INF) on trade openness (TO). Second, the study tests the moderating role of institutional quality (INS) on the relationship among EG, FDI, TI and TO. Third, the study tests how TO contributes to EG efficiency. Design/methodology/approach: The study collects the data from the group of twenty (G20) economies for the period of 1998–2020. The study applied the Kao (1999), Pedroni (2001), and Palamuleni (2017) cointegration tests to test the long-run association between variables. The study applied fully modified least square (FMOLS) and dynamic least square (DOLS) models to test the hypotheses. Findings: Findings of the study showed the positive impact of EG, FDI and TI on TO, which becomes more positive in the presence of institutional quality. Results indicate that INS plays an enhancing role in the relationship between FDI and TO, EG and TO and TI and TO. The study showed a negative relationship between INF and TO, and institutional quality plays a buffering role in the relationship between INF and TO. Originality/value: First, the study reinvestigates the empirical association among EG, FDI, TI, INF and TO. Second, the study tests the moderating role of INS on the relationship between the proposed variables by developing an index of all the indicators of INS. Third, the study tests the contributions of TO in economic efficiency (ECE). The contributions of the present study will increase the available literature of TO and help the policy makers of G20 nations to suggest important policies to promote TO and ECE. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to empirically study the necessary and sufficient antecedents of customer loyalty to logistics service providers (LSPs). Despite the abundance of loyalty studies, few studies have empirically examined the complex causal relationships between loyalty and its antecedents using the appropriate research methods. Design/methodology/approach: The study uses fuzzy sets qualitative comparison analysis (FsQCA) to uncover the antecedents and antecedent configurations of customer loyalty. This study examined the necessity and sufficiency of five antecedents (operational collaboration, strategic collaboration, trust, service satisfaction and price satisfaction) and on five dimensions of loyalty (repurchase intension, switching costs, exclusiveness, referrals and overall loyalty). This study developed six research hypotheses based on existing literature and tested them empirically in a manufacturing context. This study compared results from FsQCA with regression analysis. Findings: The findings reveal that only a few antecedent configurations lead to customer loyalty, including a combination of strategic and operational collaboration, bundling of service offerings and combining competitive price with strategic collaboration. Further, the absence of trust negatively affects loyalty, but the presence of trust does not lead to loyalty. Research limitations/implications: This study contributes to business to business literature by demonstrating how to use FsQCA analysis to test the presence of equifinality, conjunction and causal asymmetry of complex relationships. This study applies FsQCA between antecedent factors and customer loyalty. Furthermore, we demonstrate how to compare and integrate FsQCA with conventional regression analysis which is based on correlation-bounded logic. Practical implications: This study shows that no single antecedents that can generate loyalty, yet, few antecedent configurations work better than others: collaborating at both strategic and operational level with your partner has the highest impact on loyalty. Another configuration that leads to loyalty is to combine competitive prices with strategic collaboration, which particularly stimulates repurchase decisions. Price is are not sufficient enough to lead to customer loyalty. Originality/value: This study applied a novel analysis to uncover necessary and sufficient conditions that conventional methods such as regression analysis and structural equation modelling have limited power. [ABSTRACT FROM AUTHOR]

Purpose: Due to large amounts of coal burning, huge carbon dioxide emission and poor environmental quality, it is important to identify whether environmental Kuznets curve exists in China and India since in downward period of environmental Kuznets curve, economic growth in these countries will largely contribute to world environmental quality. Further, it helps to make a comparative analysis between China and India on how economic growth will contribute to the environmental quality in both upward and downward period of environmental Kuznets curve due to energy consumption. Design/methodology/approach: This study uses the data of carbon dioxide emission, per capita GDP and energy consumption from 1972 to 2017 to identify individual and panel-level environmental Kuznets curve of China and India. Before going to regression and causality analysis, unit root and cointegration tests are performed. Findings: This study finds the existence of environmental Kuznets curve in China and India at both individual and panel level. Further, due to high energy consumption, environmental quality in China will deteriorate at a lower rate in the long run than that of India. Next, the increase in economic growth or per capita GDP in the long run will deteriorate environmental quality at a lower rate in China than that of India. Besides, with the zero level of energy consumption and per capita GDP, the environmental quality of China will be worse than that of India. However, increase in per capita GDP after threshold level will improve environmental quality in India at a higher rate than that of China. Research limitations/implications: It helps to formalize the comparative relationship between the two large Asian economies by knowing the influence of economic growth on environmental degradation due to energy consumption. However, this study cannot conclude exactly when China and India can avail the downturn in environmental Kuznets curve. Originality/value: It firstly establishes a link among energy consumption, economic growth and environmental quality between China and India including comparative pace in both upward and downward period of environmental Kuznets curve. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to investigate the effect of labour market conditions and monetary policy on households' attitude towards debt in the Australian context. Design/methodology/approach: In doing so, household debt is categorised into housing, and consumer debt and the relationship is empirically tested through the use of a vector error correction model. Findings: Consumer debt is found to be highly dependent on consumption with employment income and unemployment having a statistically insignificant effect, whilst monetary policy showing an inverse relation to consumer debt. The findings suggest that household consumption appears to be the primary determinant for consumer debt, which then behaves as a wage substitute. In terms of housing debt, income and monetary policy positively affect households' decisions with consumption and unemployment having a negative impact on the level of housing debt. The empirical results suggest that housing debt behaves as a proxy for household investment. Originality/value: This paper empirically investigates the impact of selected macroeconomic variables on housing and personal debt separately. The findings suggest that monetary policy and labour market conditions have different impacts on the two separate debt types. [ABSTRACT FROM AUTHOR]

Purpose: The objective of this study is to examine the causal relationship between economic growth, information and communication technology (ICT) penetration and innovation development in OECD countries. Design/methodology/approach: This study incorporates data for 24 OECD countries from 2000 to 2018, which is divided into the earliest (2000–2009) and the latest (2010–2018) periods. The econometric methodologies of this study employ panel cointegration, estimation procedures and vector error-correction modelling to investigate the potential interconnections between ICT, innovation development and economic growth. Findings: The results from the latest period illustrate that OECD countries have achieved positive and significant economic development from high ICT penetration, while results from the earliest period show that OECD countries were just beginning to enjoy the benefits of ICT penetration. Moreover, findings show that innovation development is highly significant in the latest period when promoting economic growth. Practical implications: The policy implications suggest that promoting ICT infrastructure establishment and expanding the innovation development may drive the process of economic development in OECD countries. Originality/value: This study employs mobile and Internet penetration as the development of telecommunication which is in line with the enlargement of innovation to foster economic growth in OECD countries. Comparing the evidence from two decades provides significant value for policymakers and decision-makers regarding the advantages of technology expansion and innovation development to promote economic growth in recent conditions. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to measure the effectiveness of the hedging with futures currency contracts. Measuring the effectiveness of hedging has become mandatory for Indian companies as the new Indian accounting standards, Ind-AS, specify that the effectiveness of hedges taken by the companies should be evaluated using quantitative methods but leaves it to the company to choose a method of evaluation. Design/methodology/approach: The paper compares three models for evaluating the effectiveness of hedge – ordinary least square (OLS), vector error correction model (VECM) and dynamic conditional correlation multivariate GARCH (DCC-MGARCH) model. The OLS and VECM are the static models, whereas DCC-MGARCH is a dynamic model. Findings: The overall results of the study show that dynamic model (DCC-MGARCH) is a better model for calculating the hedge effectiveness as it outperforms OLS and VECM models. Practical implications: The new Indian accounting standards (Ind-AS) mandates the calculation of hedge effectiveness. The results of this study are useful for the treasurers in identifying appropriate method for evaluation of hedge effectiveness. Similarly, policymakers and auditors are benefitted as the study provides clarity on different methods of evaluation of hedging effectiveness. Originality/value: Many previous studies have evaluated the efficiency of the Indian currency futures market, but with rising importance of hedging in the Indian companies, Reserve Bank of India's initiatives and encouragement for the use of futures for hedging the currency risk and now the mandatory accounting requirement for measuring hedging effectiveness, it has become more relevant to evaluate the effectiveness of hedge. To the authors' best knowledge, this is one of the first few papers which evaluate the effectiveness of the currency future hedging. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to study impacts of changes in crude oil price, money supply, fiscal deficit and effective exchange rate on India's economic growth (expressing all variables in real term). Design/methodology/approach: First, a simple macroeconomic model is formulated to this effect. Next, linear autoregressive distributed lag procedure and vector error-correction model are applied for growth empirics. Annual data are used from 1977 through 2015. Findings: Rises in real crude oil price and monetized real fiscal deficits have negative short-run and long-run effects on real economic growth. Increase in real money supply and real effective exchange rate appreciation helps promote real economic growth in both short run and long run. In all cases, there is evidence of net interactive positive feedback effects among the variables in the short run. Real effective exchange rate appreciation dampens exports, but it is helpful to imports of capital goods and crude oil that contribute to economic growth. So, the net effect on the economy may be conjecturally positive. Originality/value: To the best of the authors' knowledge, this paper is unique because of the formulation of macro-economic model pertaining to the topic and its subsequent empirical verification. Moreover, this paper seems more comprehensive than some other studies, cited in the literature review. [ABSTRACT FROM AUTHOR]

Purpose: The development of green economy is of academic and policy importance to governments and policymakers worldwide. In the light of the necessity of renewable energy to sustain green economic growth, this study aims to examine the relationship between renewable energy consumption and green economic growth, controlling for the impact of trade openness for Organization for Economic Co-operation and Development countries over the period 1990-2015, within a multivariate panel data framework. Design/methodology/approach: To investigate the long-run relationship between variables, panel cointegration tests are performed. Panel Granger causality based on vector error correction models is adopted to understand the short- and long-run dynamics of the data. Furthermore, ordinary least square (OLS), dynamic OLS and fully modified OLS methods are used to confirm the long-run elasticity of green growth for renewable energy consumption and trade openness. Moreover, system generalized method of moment is applied to eliminate serial correlation, heteroscedasticity and endogeneity problems. The authors used the panel Granger causality test developed by Dumitrescu and Hurlin (2012) to infer the directionality of the causal relationship, allowing for both the cross-sectional dependence and heterogeneity. Findings: The results suggest that renewable energy consumption and trade openness exert positive effects on green economic growth. The results of long-run estimates of green economic growth reveal that the long-run elasticity of green economic growth for trade openness is much greater than for renewable energy consumption. The estimated results of the Dumitrescu and Hurlin (2012) test reveal bidirectional causality between green economic growth and renewable energy consumption, providing support for the feedback hypothesis. Practical implications: This paper provides strong evidence of the contribution of renewable energy consumption on green economy for a wide range of countries. Despite the costs of establishing renewable energy facilities, it is evident that these facilities contribute to the green growth of an economy. Governments and public authorities should promote the consumption of renewable energy and should have a support policy to promote an active renewable energy market. Furthermore, the regulators must constitute an efficient regulatory framework to favor the renewable energy consumption. Social implications: Many countries focus on increasing their GDP without taking the environmental impacts of the growth process into account. This paper shows that renewable energy consumption points to the fact that countries can still increase their economic growth with minimal damage to environment. Despite the costs of adopting renewable energy technologies, there is still room for economic growth. Originality/value: This paper provides evidence on the contribution of renewable energy consumption on green economic growth for a wide range of countries. The paper focuses on the impact of renewable energy on economic growth by taking environmental degradation into consideration on a wide scale of countries. [ABSTRACT FROM AUTHOR]

Purpose: This study examines the role of financial development and its interaction with corruption in the environmental degradation of eight Sub-Saharan African countries from 2000–2014. Design/methodology/approach: The study utilizes Pedroni cointegration and fully modified ordinary least squares (FMOLS) techniques for the estimation of the models. Findings: The results of the cointegration test reveal that there exist long-run relationships among the variables in the model with the interaction of financial development and corruption, and in the model without interaction. The FMOLS estimates show that in the former model, the interaction of financial development with corruption is positively significant in determining the level of environmental degradation in those countries. Moreover, in the latter, financial development, trade openness, and corruption have a positive effect on their environmental degradation Research limitations/implications: Unavailability of data, the study was limited to only eight Sub-Saharan African nations Practical implications: The finding that financial development and its interaction with corruption have an adverse effect on the environments of the Sub-Saharan African countries implies the need to focus on how efficient credits are being allocated in those countries. For better management of environmental quality, this may require the implementation of policies that enhance credit allocation to users with energy-efficient technology and appliances that promote the quality of environments. In addition, stringent policies could be embarked upon to curtail all acts of corruption in the region for an efficient credit allocation and a better environment in the development of Sub-Saharan African society. Originality/value: The dearth in empirical studies on the Sub-Saharan African countries motivates this study. In particular, little is known about the interaction effect of corruption and financial development on the environmental degradation of those countries, as the work on this is limited in the existing literature. [ABSTRACT FROM AUTHOR]

Purpose: With the ascendance of information technology, particularly through the internet, external information sources and their impacts can be readily transferred to influence the performance of financial markets within a short period of time. The purpose of this paper is to investigate how incidents affect stock prices and volatility using vector error correction and autoregressive-generalized auto regressive conditional Heteroskedasticity models, respectively. Design/methodology/approach: To characterize the investors' responses to incidents, the authors introduce indices derived using search volumes from Google Trends and the Baidu Index. Findings: The empirical results indicate that an outbreak of disasters can increase volatility temporarily, and exert significant negative effects on stock prices in a relatively long time. In addition, indices derived from different search engines show differentiation, with the Google Trends search index mainly representing international investors and appearing more significant and persistent. Originality/value: This study contributes to the existing literature by incorporating open-source data to analyze how catastrophic events affect financial markets and effect persistence. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to investigate what factors can affect people's continuous watching and consumption intentions in live streaming. Design/methodology/approach: This research conducted a mixed-methods study. The semi-structured interview was deployed to develop a research model and a live streaming typology. A survey was then used for quantitative assessment of the research model. Survey data were analyzed using partial least squares-structural equation modeling. Findings: The results suggest that sex and humor appeals, social status display and interactivity play considerable roles in the viewer's behavioral intentions in live streaming and their effects vary across different live streaming types. Research limitations/implications: This research is conducted in the Chinese context. Future research can test the research model in other cultural contexts. This study can also be extended by incorporating the roles of viewer gender and price sensitivity in the future. Practical implications: This study provides managerial insights into how live streaming platforms and streamers can improve their popularity and profitability. Originality/value: The paper introduces a novel form of social media and a new business model. It illustrates what will affect people's behavioral intentions in such a new context. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to analyze the effect of economic growth, international trade and energy consumption on the global carbon dioxide (CO2) emissions, in the case of top CO2 emitters, namely, USA, Japan, Canada, Iran, Saudi Arabia, UK, Australia, Italy, France and Spain using the annual data from 1971 to 2013. Design/methodology/approach: For this purpose, the time series, data technique is applied. Unit root test with structural break and the bounds testing approach for cointegration in the presence of structural break is tested. Finally, a vector error correction model for the Granger causality test is applied to detect the direction of causality. The authors have used the techniques that will help in examining the structural break in the time series data. Findings: The results reveal that their exists a long-run relationship between CO2 emissions and its determinants in the USA, Canada, Iran, Saudi Arabia, the UK, Australia, Italy, France and Spain, energy consumption is the main determinant of carbon dioxide (CO2) emissions in the long run and for direction of causality, the authors found bidirectional causality in the long run between energy consumption and CO2 emissions in the USA, Canada, Iran, Saudi Arabia and the UK, and Granger causality running in opposite direction in the case of Australia from CO2 emissions to energy consumption was analyzed. In terms of growth-trade-pollution nexus (USA, Canada, Iran and France) hold one-way causality running from economic growth and trade openness to CO2 emissions (IV) the environmental Kuznets curve hypothesis is validated only for the USA. Robust policy implications can be derived from this study. First, without harming the economy, these countries can reduce the use of energy consumption for lower pollution. Second, the amount of trade should be decreased to lower the emissions because the authors find that an increase in trade does Granger cause to CO2 emissions in the long run. Originality/value: There has been no study that investigated the relationship between CO2 emissions, real income, consumption of energy and international trade in the environmental Kuznets relation for the top CO2 emitter's countries over the period of 1971–2013. The authors did a comparative study of the empirical finding among these nations. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to analyze the long-run as well as short-run nonlinear effect of foreign direct investment (FDI), economic growth (EG) and industrialization on environmental degradation (carbon dioxide (CO2) emissions) in Pakistan. Design/methodology/approach: The study applies a nonlinear autoregressive distributive lag methodology to examine the long-run and short-run relationship among the variables. FDI, EG and industrialization are decomposed into positive and negative variations to examine the nonlinear relationship with CO2 emissions. Granger causality test is used to examine the direction of causality among the variables. The study uses annual time-series data of Pakistan from 1975 to 2016. Findings: An increase in FDI has a positive and significant effect on CO2 emissions in the long run, while a decrease in FDI has a negative and insignificant effect on CO2 emissions. An increase in EG has a positive and significant effect, while a decrease in EG has a negative and insignificant effect on CO2 emissions in the long run. An increase in industrialization has a positive and significant effect on CO2 emissions, while a decrease in industrialization has a negative and insignificant effect on CO2 emissions. Unidirectional causality flows from CO2 emissions to a positive partial sum of FDI, EG, industrialization and a negative partial sum of EG in the short run. Practical implications: The government has to establish the environmental regulation for industrial sectors. Research and development centers are required at government and private levels to control pollution through new technologies. Regulations and restrictions are required on the foreign investor to adopt friendly environmental policies. Originality/value: This study contributes to the existing literature by analyzing the nonlinear effects of FDI, industrialization and EG on environmental pollution in Pakistan. The main significance of this investigation is to provide the essential evidence, information and better understanding to key stakeholders of the environment. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to consider the heterogeneous relationship among financial development, foreign direct investment (FDI) and economic growth, examining the possible directions of causality among them in both the short and long runs. Design/methodology/approach: A sample of the G-20 countries over the period 1970–2016 is utilized. A vector error-correction model is used to consider the possible directions of causality among financial development, FDI and economic growth. Findings: Results suggest a cointegrating relationship among the three series. Although short-run links among the variables are mostly non-uniform, both financial development and FDI matter in the determination of long-run economic growth. Practical implications: Attention must be paid to policies that promote financial development. This, in turn, calls for fostering incentives to guarantee continued support to liberalize the economy and promoting capital openness. Additionally, financial infrastructure should be improved to improve financial innovation. The establishment of a well-developed financial market, including well-functioning banks and other financial institutions, can facilitate further investment and an easier means of raising capital to support the activities of FDI. Economic growth can ultimately be elevated through both financial development and FDI. Originality/value: The study considers a sample of the G-20 countries, which have received relatively little attention in the existing literature. In addition, the study concurrently analyses the trivariate causal relationship among financial development, FDI and economic growth, a topic on which there has been a dearth of research. [ABSTRACT FROM AUTHOR]

Purpose: Banking institutions have vigorously pursued the integration of information and communication technology in modern banking services. Unfortunately, empirical support demonstrating the usefulness of this undertaking has largely been scanty. The purpose of this paper is to investigate causal links between the efficiency of information technology (IT) applications and bank performance using data envelopment analysis. Design/methodology/approach: The study adopts the DEA approach to evaluate the bank level cost and IT efficiency. The Vector Error Correction Model Granger causality tests with the forecast error variance decomposition and impulse response functions were subsequently used to examine the causal relationship between the variables. Findings: From the findings, the bank achieved an average level of 99.1 per cent cost efficiency for the sampled period. Also the periods where the bank obtained optimal cost efficiency were in 2005, 2006 and 2014. This culminated into inefficiency scores ranging from 0 to 2.9 per cent, with 2016 financial year as the period of worst cost performance. In addition, the study found that there are both short-run and long-run relationships between IT efficiency and cost performance. Practical implications: Management should note that any improvement to IT applications may contribute significantly to overall IT performance but for the short period, specifically the first period, by the medium to long-run period, most improvement to overall IT performance emanates from cost performance of the bank. Originality/value: Some studies have examined the effect of IT on banks in USA and Europe. However, such studies are rare in the African context. This study will contribute to extant literature by add a new dimension of IT and bank efficiency. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to investigate the validity of the environmental Kuznets curve (EKC) between gross domestic product (GDP) per capita and environmental indicators in the Gulf Cooperation Council (GCC) countries. Additionally, this paper also explores the relationship between health and income levels in the GCC to identify whether higher incomes necessarily affect overall health metrics. Design/methodology/approach: The first part of this paper studies the relationship between GDP per capita and the greenhouse gases (GHGs) – carbon dioxide (CO2), nitrous oxide (N2O) and methane (CH4) (all per capita data). The second part of this paper explores the relationship between GDP per capita and the following health variables: life expectancy, infant mortality and child mortality – for GCC countries during 1980–2012. Unit root tests were conducted, followed by cointegration analysis, leading to Granger causality test and vector error correction model. Findings: GCC states are highly dependent on fossil fuel production and hence depend on hydrocarbons for GDP growth. Most of the GCC states demonstrate lack of the EKC curve. However, there is evidence of U-shaped relationship between environmental pollutants and GDP per capita in kingdoms like Bahrain and Saudi Arabia (KSA). United Arab Emirates (UAE), on the other hand, demonstrates EKC, though not significantly. The study then explores the existence of potential relationship between health and GDP in the GCC, where it has been found that higher incomes have driven a better standard of living resulting in improved health metrics and higher life expectancy rates. Thus, growing incomes have played a positive role by improving health parameters and by offsetting some of the negative impacts from lack of environmental improvement as demonstrated by the absence of EKC in general in GCC. Originality/value: GHG emissions data are individually and empirically examined for each country in the GCC. Furthermore, the study delves into the environmental problems that lead to health issues, which were initially caused by pollution. The results of the empirical analysis provide strong evidence that GCC countries need to rely less on fossil fuels, as lower productivity due to higher pollution reduces income and economic growth in most countries. [ABSTRACT FROM AUTHOR]

Purpose This paper has examined the effectiveness of foreign aid on Ghanaian economy under different political regimes.Design/methodology/approach Using vector error correction and co-integration models on the annual data set over a period of 35 years, the authors demonstrate that foreign aid has had varied impacts on economic growth depending on the political ideology of the government in power.Findings With capitalist political philosophy, foreign aid improves private sector growth through infrastructural development. On the other hand, a government with socialist philosophy applies most of its foreign aid in direct social interventions with the view of improving human capital. Thus, each political party is likely to seek foreign aid/grant that will support its political agenda. Overall, the results show that foreign aid has a positive impact on the growth of the Ghanaian economy when there is good macroeconomic environment.Practical implications This implies that the country experiences economic growth when there are sound economic policies to apply foreign aid.Originality/value The practical implication of the findings of this paper is that donor countries and agencies should consider the philosophy of the government in power while granting aid to recipient countries, especially in Africa. The results are robust to different proxies and models. [ABSTRACT FROM AUTHOR]

Purpose Due to the complicated nature of houses, the driving factors of the residential construction output can be investigated from different perspectives of interests. However, little research has provided an insight of the trend of the residential construction output from a cross-disciplinary perspective. The purpose of this paper is to identify the long-run equilibrium types of residential construction output, including external equilibrium, solo-market equilibrium and dual-market equilibrium.Design/methodology/approach A vector error correction model is applied into longitudinal data in the eight Australian states and territories to overview the regional variations of the residential construction output.Findings The empirical results show that the equilibrium of regional residential construction outputs in New South Wales and Victoria are determined by the external factors; the equilibrium in Western Australia is dominated by the construction market; and the equilibriums in the other five states and territories are influenced by both construction and house markets.Research limitations/implications The simplified approach may overlook the detailed explanation of the external factors, such as regional population, economy, policy and so forth. Given this limitation, future studies can introduce the correspondingly variables as per research interests.Originality/value Implementing the existing research into residential construction output and house supply, this research provides a simplified approach that demonstrates the linkage between construction and real estate sectors to identify the long-run equilibriums across regions. The underlying research sheds light in delivering inter-disciplinary research into the residential construction output. [ABSTRACT FROM AUTHOR]

Purpose This paper aims to empirically explore the influences of Tobin’s Q and CEO compensation of 249 US companies on their stock returns.Design/methodology/approach Heterogeneous panel data for these companies over 2004-2012 are used invoking panel cointegration techniques.Findings Panel unit root tests and Pedroni cointegration tests confirm nonstationarity of each variable and cointegration among the above three variables. The panel vector error-correction model (VECM) estimates reveal long-run convergence with tepid adjustment. The short-run net interactive feedback effects are positive. The panel generalized method of moments estimates lend further support to the panel VECM inferences.Originality/value The topic is unique and the existing literature on this topic is scant. Relatively new econometric techniques have been applied for estimation using panel data. The results are quite insightful, in the authors’ view. [ABSTRACT FROM AUTHOR]

Purpose This study aims to examine the relationship between economic policy uncertainty and stock market liquidity in an order-driven emerging stock market.Design/methodology/approach Empirical estimates are based on vector autoregressive Granger-causality tests, impulse response functions and variance decomposition analysis.Findings The empirical findings suggest that economic policy uncertainty moderately influences stock market liquidity during normal market conditions. However, the role of economic policy uncertainty for determining stock market liquidity is significant in times of financial crises. The authors have also observed a significant portion of variation in stock market liquidity that is attributed to investor sentiments during financial crises.Originality/value This study is original in nature and provides evidence to consider economic policy uncertainty as a possible source of commonality in liquidity in the context of an emerging market. [ABSTRACT FROM AUTHOR]

Purpose Understanding the role of financial intermediaries towards financial development and thereby the growth of an economy, this study aims to examine the long-run relationship between the development of banking and insurance sector and economic growth in India by covering different regimes including the regulated and the liberalized period.Design/methodology/approach For examining the long-run relationship between these sectors, the study uses VAR-VECM technique. Further, Granger causality test is used to check if there is the presence of any causal link among these sectors.Findings The findings clearly indicate long-run relationship between economic growth and the development of banking and insurance sector, while the causality results show demand following relationship in the complete period where there is bi-directional causality in the post-liberalized period from insurance to economic growth.Research limitations/implications As banking development is not found to support economic growth, this raises serious concerns towards the complex role of banks as against theory and demands further analysis to understand their role in an economy.Practical implications As causality pattern has changed from demand following to bi-directional causality, it is vital to understand the importance of liberalization towards the economic growth of the country as well as the contribution of insurance sector towards economic growth in the liberalized environment.Originality/value This is the first effort to empirically explore the relationship between economic growth and the development of banking and insurance sector in India by covering the complete period (regulated and liberalized). [ABSTRACT FROM AUTHOR]

Purpose The Great Leveraging was an episode of rapid credit growth and booming housing markets leading up to the global financial crisis. It is important to identify the key drivers of the Great Leveraging and, to this end, the purpose of this paper is to model the relationship between domestic credit and net foreign liabilities in the EU countries most affected by the crisis.Design/methodology/approach The analyses show that domestic credit and net foreign liabilities were cointegrated one-to-one for Greece, Italy, Portugal and Spain, while there was no cointegration for Ireland. Estimation of vector error correction models (VECMs) shows that the adjustment to deviations from the cointegrating relationship took place through changes in domestic credit for Greece and Italy, while the adjustment was bidirectional for Spain and maybe also for Portugal.Findings These results suggest that external factors in the form of foreign capital inflows were important drivers of the pre-crisis leveraging in the southern crisis countries, although to varying degrees across the countries.Originality/value Key novelties include the use of stock variables instead of flow variables and the estimation of VECMs for the countries individually instead of in a panel. [ABSTRACT FROM AUTHOR]

Purpose Primarily based on Alonso’s bid-rent model, the purpose of this paper is to examine the dynamics of the Singapore’s overall retail rental market by adopting a vector error correction model (VECM) estimation.Design/methodology/approach This paper uses the proxy for the overall retail rental value, which is indicated by a combination of the shop rent index from 2004 to 2013 and the retail rent index (RRI) in 2014, maintained by the Urban Redevelopment Authority (URA). The independent factors are the real gross domestic product (GDP), monthly earnings of individuals and vacancy rates (VR).Findings Such a behavioral model examines the dynamic structures that overshoot and/or diverge from equilibrium.Research limitations/implications The variables LOGGDP and VR are co-integrated of order one, I(1), while variables LOGME and LOGSRI are co-integrated of order two, I(2), to enable them to be employed in the VECM model.Practical implications The VECM model shows a good fit that allows the error correction term (ecm) together with the economic, financial and rental variables to jointly explain about 79.2 percent of the variation in the overall RRI. With a positive CoinEq1 coefficient that is positive and statistically significant at 5 percent level, it would take a long time for the system to return to its equilibrium once it has been shocked. Another variable that shows significant explanatory relationships includes past rents (index points) in the second order lags [D(LOGSRI(−2))]. The variable [D(LOGGDP(−3))], with a significant t-statistic value at 2.916, also helps to explain the changes in the overall rents.Social implications This paper highlights the importance of the first and third differences of the lagged macroeconomic variables of the monthly earnings of individuals is moderately significant. The VR in the first and second differences is significant in accounting for the variation in changes of overall retail rents with their t-statistics values being above 3.0. It is thus meaningful for policy makers to so enhance their in-depth understanding.Originality/value This paper fulfills an identified need to study how the results from the ex post forecasting estimates from the VECM for overall retail rents in Singapore can be enabled. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to identify whether any financial integration exists among ASEAN+5 members and some East Asian countries, including China, Japan, Korea, Hong Kong, and Taiwan, through interest rate, exchange rate, level of prices, and real output. Design/methodology/approach – Therefore, the authors intend to identify any long-term relationship among these variables utilizing the data in the most efficient manner via panel cointegration and panel unit root tests. The study likewise uses a panel-based vector error correction (panel-vec) model for comparison and also short-run relationship analysis. The long-run relationship is estimated using dynamic ordinary least square technique and a panel multi-layer perceptron (MLP) neural network. Findings – For the ten countries under consideration, the empirical result supports the long-run equilibrium relationship among real output, exchange rate, interest rate, and level of prices, and that the cointegration relationship implies unidirectional causality from exchange rate to real output. This result is favorable to a model that contains real output as a dependent variable and exchange rate, interest rate, and level of prices as explanatory variables. Panel-vec results indicate no evidence of short-run causality from exchange rate to real output. Furthermore, the comparison result of long-run equation estimation shows the superiority of neural networks over econometric models. Originality/value – This paper adds to the literature by examining the financial cointegration using a panel model that contains real exchange rate, interest rate, real output, and inflation rate in ASEAN+5. Additionally this paper applied the MLP neural network to yield a robust estimation of the long-run equation obtained among the variables. [ABSTRACT FROM AUTHOR]

The aim of this chapter is to assess the real exchange rate misalignments. A smooth transition autoregressive model (STAR) is used for Tunisian exchange market. This model allows us to see whether these differences are temporary or persistent over the period 1975-2012. We start by defining the exchange rate's fundamental determinants to provide the equilibrium exchange rate value. Then, we study the observed exchange rate adjustment toward its equilibrium level. Vector autoregressive model and vector error correction model are applied to characterize the joint dynamics of variables in the long run. The results indicate a long-run relationship between variables. In order to consider the nonlinearity for better results, we will move to nonlinear smooth transition model. We found there is a high degree of exchange rate misalignment. We recognized that this difference decreases in the long run and disappears at the end. [ABSTRACT FROM AUTHOR]

Purpose – What caused the mid-2000s world commodity price “bubble” and the recent commodity price growth? Some have suggested that rapid global industrial growth over the past decade is the key driver of price growth. Others have argued that high commodity prices are a result of excessively loose monetary policy. The purpose of this paper is to extend the current research in this area by incorporating emerging economies, the BRIC (Brazil, Russia, India, and China) nations specifically, into global measures. Design/methodology/approach – The paper uses a vector error correction (VEC) model and computes variance decomposition and impulse response functions (IRFs). Findings – The empirical analysis suggest that the “demand channel” plays a large part in explaining commodity price growth whether BRIC countries are included or excluded from the analysis. However, excess liquidity may also play a part in explaining price growth. In addition, factoring in BRIC country data leads to the conclusion that unexpected movements in liquidity eventually explain more of the variation in commodity prices than unexpected demand shocks. This specific result is not caught in the sample that only incorporates advanced economies. Research limitations/implications – Despite the theory of Frankel (1986) and the findings of previous global vector autoregression (VAR)/VEC analyses, interest rates, especially shocks, have a minimal impact on consumer and commodity prices. Perhaps future studies should include an interest rate in their analysis that more closely reflects interest rates associated with information used by commodity consumers, producers, and investors. Some analyses such as Hua (1998) use the LIBOR rate, which is highly associated with developed financial markets in the advanced economies. Data quality and availability in the BRIC countries severely limited the length of the time period analyzed and the frequency of the data. Finding longer sample periods or higher frequency data can help to minimize bias in future research. In this paper, monetary aggregates and short-term interest rates were loosely connected to monetary policy. It would also be interesting to directly examine how special programs like quantitative easing influenced global liquidity. Practical implications – The results of the IRFs and variance decompositions confirm some of the previous findings reported in Belke et al. (2010), Hua (1998), and Swaray (2008) that suggest that positive shocks to liquidity positively impact commodity prices. In particular, both samples suggest that this is a short-run impact that occurs after two quarters. However, in the sample that includes information about liquidity from BRIC countries, excess liquidity positively affects commodity prices after six and seven quarters as well. The insignificant results of Granger causality tests of the effect of monetary variables on commodity prices suggests that this relationship is limited to movements in liquidity that is unexpected by agents in the system. These “shocks” could be attributed to a number of factors including exogenous monetary policy changes such as the unprecedented responses by the Federal Reserve during and after the 2008 global financial crisis. Social implications – First, empirical research that claims to analyze relationships at a “global” level needs to account for the growing influence of emerging economies and not simply the advanced economies. Otherwise, results may be biased as they were when too much of the forecast error variance in commodity prices was attributed to shocks to output when it should have been attributed to shocks to excess liquidity. Second, those who criticize expansionary monetary policy in the advanced countries, especially by the Federal Reserve, for pushing up commodity prices should also direct their attention toward monetary authorities elsewhere, especially the BRIC countries, since information on excess liquidity from these countries adds to the influence that global excess liquidity has on commodity prices. Third, monetary policymakers in the advanced countries need to closely monitor liquidity in the BRIC countries, since the discrepancies between the ALL and ADV samples suggests that BRIC excess liquidity affects commodity prices in a way that cannot be captured by examining advanced country data alone. Originality/value – No other paper in this area looked at the BRIC countries. [ABSTRACT FROM AUTHOR]

Purpose – This purpose of this paper is to empirically examine the contribution of the Islamic banking and financial institutions (IBFIs) to economic growth in Malaysia. Design/methodology/approach – Focusing on the post-1997 economic turmoil, the paper relies on several time series tests, such as autoregressive distributed lag (ARDL), vector error correction model (VECM) and variance decompositions (VDCs). Findings – The paper documents significant role played by the IBFIs in Malaysian economy. In particular, significant unidirectional causality was found from the IBFIs development to economic growth, supporting the finance-growth led hypothesis or the supply-leading view. Research limitations/implications – The paper only focuses its analysis on the role of the IBFIs in the Malaysian economy and not the financial sector as a whole. Thus, the findings of this paper are indicative, but inconclusive for the entire financial sector in the country. Practical implications – Continuous efforts should be undertaken to promote the development of the Islamic banking industry due to its significant contribution to Malaysia’s economic growth by further improving the Islamic financial infrastructure, increasing the pool of human capital in the Islamic banking industry, providing conducive legal environment to the IBFIs and maintaining the Islamic financial sector stability. Originality/value – This paper is the first attempt to empirically assess the contribution of Islamic banking institutions in Malaysia using ARDL, VECM and VDCs. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to demonstrate importance of usage of sector indices which provides insight for sector specific investment strategies and direction for suitable policy formulation for the Indian industry. It investigates long run, short run and causality relationships between eight identified sector indices and Sensex for the post subprime period. Design/methodology/approach – The study uses Vector Error Correction Model (VECM) for econometric analysis. It employs Generalized Impulse Response and Variance Decomposition analysis for developed multivariate framework in order to provide information about precise interplay of the sector indices. Findings – Long-term relationships between sector indices were determined by the usage of VECM indicating minimal benefits from diversifying investments to different sectors. Limited lead – lag short run relationships between sector indices were observed. Banking index played a predominant and integrating role in moving other indices. During this period of recovery; most sectors were protected and provided marginally better returns due to robust Banking policy. Realty and Metal were other significant drivers influencing remaining sectors contemporaneously. The study for the post subprime crisis period helps to understand the importance and behavior of interrelated sector indices and Sensex in the dynamic economic environment. Practical implications – The study clearly provides direction for sector specific investment strategies and policy formulation. Originality/value – The study highlights utility and importance of usage of sector indices. No study using sector indices for the Indian economy have been done earlier employing VAR for the post subprime crisis period. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to examine the relationship between stock prices and exchange rates in 12 OECD countries. Design/methodology/approach – The authors examine the nexus of stock prices and exchange rates for 12 OECD countries by using the vector error correction model, the bounds testing methodology and linear and non-linear Granger causality methods. Findings – The empirical results substantiate that a long-run level equilibrium relationship among the exchange rates and stock prices exists in only seven out of twelve countries. The results of the linear causality tests indicate that significant short-run and long-run causal relationships exist between the two financial markets. The results of the tests for non-linear Granger causality suggest that unidirectional and bidirectional non-linear causal relationships exist between stock prices and exchange rates among these OECD countries. Originality/value – The findings from this paper suggest the causal relationships between stock prices and exchange rates are not only linear, but also non-linear. [ABSTRACT FROM AUTHOR]