scholarly journals Banks’ Performance and Economic Growth in India: A Panel Cointegration Analysis

Economies ◽  
2021 ◽  
Vol 9 (1) ◽  
pp. 38
Author(s):  
Md. Shabbir Alam ◽  
Mustafa Raza Rabbani ◽  
Mohammad Rumzi Tausif ◽  
Joji Abey
Keyword(s):  
Economic Growth ◽  
Banking Sector ◽  
Panel Cointegration ◽  
Cointegration Analysis ◽  
Return On Assets ◽  
Vector Error Correction ◽  
Two Factors ◽  
Dynamic Ols ◽  
Relationship Of ◽  
Interest Margin

The banking sector plays a crucial role in the economic growth of a nation. The purpose of this study is to examine the long-term association between banks’ performance and the economic growth of a developing economy: India. The study used a panel of data of 20 public sector banks for the period 2009 to 2019. It applied the Pedroni and Kao test of co-integration, panel vector error correction model (VECM) dynamic, panel fully-modified ordinary least squires OLS (FMOLS), and dynamic OLS (DOLS) to estimate the relationship of interest margin return on assets, bank investment, and lending capacity of the bank with gross domestic product (GDP) of the country. The identification and incorporation of these bank-related variables are the innovations of this study. The results indicate that the bank-related variables are co-integrated with economic growth. Further analysis indicates a significant relationship between interest margin and return on assets with economic growth. In addition, lending capacity and investment activities are not significantly associated with economic growth, leading to the policy recommendation to improve upon these two factors in order to achieve higher growth rates.

scholarly journals Energy and economic growth in G20 countries: Panel cointegration analysis

2020 ◽  
Vol 9 (2) ◽  
pp. 56 ◽  
Author(s):  
Aynur Pala
Keyword(s):  
Economic Growth ◽  
Global Warming ◽  
Energy Consumption ◽  
Energy Demand ◽  
Panel Cointegration ◽  
Cointegration Analysis ◽  
Vector Error Correction ◽  
Long Run ◽  
Equilibrium Relationship ◽  
Dynamic Ols

Rising economic performance has enlarged energy demand, carbon emissions and global warming. Policymakers need to avoid global warming. Therefore, energy-growth nexus is important. This paper empirically investigates the relationship between energy consumption and economic growth for a panel of G20 countries over the period 1990-2016. For this purpose, the paper considers the panel cointegration and panel vector error correction model. Panel cointegration test set out a long-run equilibrium relationship. Long-run relationship is estimated using a Fully Modified OLS (FMOLS) and Dynamic OLS (DOLS). The results show that causality run from energy consumption to GDP. It is indicates that “growth hypothesis” is valid for G20 countries.

Export-led Growth Hypothesis in MINT Countries: A Panel Cointegration Analysis

2017 ◽  
Author(s):  
Harun Bal ◽  
Shahanara Basher ◽  
Abdulla Hil Mamun ◽  
Emrah Akça
Keyword(s):  
Economic Growth ◽  
Large Population ◽  
Panel Cointegration ◽  
Secondary Data ◽  
Capital Formation ◽  
Cointegration Analysis ◽  
Promotion Strategy ◽  
Key Factor ◽  
Good Number ◽  
Growth Hypothesis

The contribution of exports to GDP in MINT countries that improve substantially just after their implantation of export promotion strategy in the late 1980s raises the issue of whether the growth in these countries is led by export or not. While a good number of studies have been found investigating whether economic growth is promoted by exports for developing countries having an outstanding share of export in GDP, no study investigating the export-led growth hypothesis for MINT countries has been found until recent times. The main purpose of this study is to fill up the void. The study employs panel cointegration technique with an aim to examine whether the export is the key factor of economic growth for MINT countries employing yearly secondary data that covers the period. Results of the study imply that economic growth of these countries is considerably exports driven. Moreover, there is an indication of improvement of efficiency as exports work along with the rise capital formation. As the employment opportunity of an economy is expanded through capital formation, the emerging MINT countries endowed with large population and favorable demographics are expected to become the major exporters with strong GDP growth by being able to attract adequate foreign investment.

scholarly journals The Causality between Education and GDP Growth in Asian Countries

2015 ◽  
Vol 50 ◽  
pp. 28-35 ◽  
Author(s):  
Mohsen Mehrara ◽  
Maysam Musai
Keyword(s):  
Economic Growth ◽  
Formal Education ◽  
Panel Cointegration ◽  
Capital Formation ◽  
Cointegration Analysis ◽  
Point Of View ◽  
Asian Countries ◽  
Variable Model ◽  
Long Run ◽  
Educational Investments

This paper investigates the causal relationship between education and GDP in 40 Asian countries by using panel unit root tests and panel cointegration analysis for the period 1970-2010. A three-variable model is formulated with capital formation as the third variable. The results show a strong causality from investment and economic growth to education in these countries. Yet, education does not have any significant effects on GDP and investment in short- and long-run. It means that it is the capital formation and GDP that drives education in mentioned countries, not vice versa. So the findings of this paper support the point of view that it is higher economic growth that leads to higher education proxy. It seems that as the number of enrollments raise, the quality of the education declines. Moreover, the formal education systems are not market oriented in these countries. This may be the reason why huge educational investments in these developing countries fail to generate higher growth. By promoting practice-oriented training for students particularly in technical disciplines and matching education system to the needs of the labor market, it will help create long-term jobs and improve the country’s future prospects.

scholarly journals Does Renewable Energy Matter for Economic Growth in Central and Eastern European Countries? Empirical Evidence from Heterogeneous Panel Cointegration Analysis

2021 ◽  
Vol 31 (1) ◽  
pp. 34-59
Author(s):  
Olimpia Neagu ◽  
Cristian Haiduc ◽  
Andrei Anghelina
Keyword(s):  
Economic Growth ◽  
Renewable Energy ◽  
Energy Consumption ◽  
Empirical Evidence ◽  
Panel Cointegration ◽  
Cointegration Analysis ◽  
Eastern European ◽  
Renewable Energy Consumption ◽  
Eastern European Countries ◽  
Heterogeneous Panel

AbstractThe aim of the paper is to provide empirical evidence in support of the relationship between renewable energy consumption and economic growth in eleven Central and Eastern European (CEE) countries over the period 1995-2015 within a multivariate panel data analysis. Based on World Bank data, the panel cointegration analysis reveals that renewable energy consumption and economic growth are positively associated in the long run in CEE countries. The heterogeneous panel causality test indicates a bi-directional causality relationship in support of the feedback hypothesis between economic growth and renewable energy consumption in Central and Eastern European countries.

scholarly journals Are There Significant Externality Effects of Remittances in Asian Economic Growth?

2018 ◽  
Vol 64 (2) ◽  
pp. 127-135
Author(s):  
Gazi M. Hassan ◽  
Shamim Shakur
Keyword(s):  
Economic Growth ◽  
Endogenous Growth ◽  
Production Function ◽  
Panel Cointegration ◽  
Education Sector ◽  
Asian Countries ◽  
Dynamic Ols ◽  
Jel Classifications

Abstract This article estimates the externality effects of remittances in a sample of Asian countries. According to Romer (1986) externality generated by education sector can raise nationwide productivity. Because a significant portion of remittances income is invested on education, remittances stock can also generate such externalities. Using a Romer type production function and with the aid of panel cointegration technique applied to the data, we find evidence in favour of a highly significant externality effects of remittances, although these estimates are small in magnitude. JEL classifications: F24; F43; O11; O15 Keywords: Remittances; Externality Effects; Endogenous Growth; Panel Cointegration, group-mean panel dynamic OLS

The dynamics of banking sector and stock market maturity and the performance of Asian economies

2014 ◽  
Vol 30 (1) ◽  
pp. 16-44 ◽  
Author(s):  
Rudra P. Pradhan ◽  
Mak B. Arvin ◽  
Neville R. Norman ◽  
John H. Hall
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Banking Sector ◽  
Panel Cointegration ◽  
Principal Component ◽  
Financial Sector ◽  
Estimation Methods ◽  
Asian Countries ◽  
Content Type ◽  
Causality Tests

Purpose – The purpose of this paper is to examine the nature of causal relations between banking sector maturity, stock market maturity, and four aspects of performance and operation of the economy: economic growth, inflation, openness in trade, and the degree of government involvement in the economy. Design/methodology/approach – The authors look for possible links between the variables by conducting panel cointegration and causality tests, using a large sample of Asian countries over the period 1960-2011. Novel panel data estimation methods allow for robust estimates, using both variation between countries and variation over time. Findings – The study identifies interesting causal links among the variables deriving uniquely from our innovations. In particular, The paper finds that for all regions considered, banking sector maturity and stock market maturity are causally linked, sometimes in both directions. Furthermore, stock market maturity may lead to economic growth, both directly and indirectly through indicators such as inflation and trade openness. The findings also support the notion that economic growth affects the maturity of the stock market in most regions. Practical implications – The results lend support to the notion that a mature financial sector is a key contributor to generating economic growth. Furthermore, economic growth itself has the potential to bring about maturity in the financial sector. Originality/value – The paper uses sophisticated principal-component analysis, panel cointegration, and Granger causality tests, methods not used in this literature before. The method was applied to recent data pertaining to 35 Asian countries – a group of countries that has previously not been adopted in this literature.

scholarly journals The Causality between Capital Formation and Economic Growth in MENA Region

2013 ◽  
Vol 8 ◽  
pp. 1-7 ◽  
Author(s):  
Mohsen Mehrara ◽  
Maysam Musai
Keyword(s):  
Economic Growth ◽  
North Africa ◽  
Panel Cointegration ◽  
Cointegration Analysis ◽  
Point Of View ◽  
Sustainable Growth ◽  
Domestic Investment ◽  
Mena Region ◽  
Long Run ◽  
Strong Causality

This paper investigates the causal relationship between gross domestic investment (INV) and GDP for Middle East and North Africa (MENA) region countries by using panel unit root tests and panel cointegration analysis for the period 1970-2010. The results show a strong causality from economic growth to investment in these countries. Yet, investment does not have any significant effects on GDP in short- and long-run. It means that it is the GDP that drives investment in mentioned countries, not vice versa. So the findings of this paper support the point of view that it is higher economic growth that leads to higher investment. According to the results, decision makings should be employed to achieve sustainable growth through higher productivity and substantially enlarging the economic base diversification in the future

scholarly journals Mexico’s Finance-Growth Nexus with Trade Openness, FDI and Portfolio Investment: Evidence from VECM Cointegration Analysis

2020 ◽  
Vol 23 (49) ◽  
pp. 29-44
Author(s):  
Takashi Fukuda
Keyword(s):  
Economic Growth ◽  
Structural Break ◽  
Trade Openness ◽  
Cointegration Analysis ◽  
Portfolio Investment ◽  
Financial Efficiency ◽  
Vector Error Correction ◽  
Vector Error ◽  
Causality Tests ◽  
Finance Growth Nexus

This study investigates Mexico’s finance-growth nexus by controlling the “globalization” variables of trade openness, foreign direct investment (FDI) and portfolio investment together with the structural break dummy. Financial development is proxied by two indicators of size and efficiency. Implementing the cointegration and Granger causality tests in the framework of the vector error correction model (VECM), we found that: financial size is negative for economic growth with no feedback; financial efficiency and economic growth are in a negative bilateral relationship; trade openness and portfolio investment are positive for economic growth; and FDI is negative for economic growth and financial efficiency.

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