Open AccessArticle
Remittances and Household Expenditure in Nepal: Evidence from Cross-Section Data
Economies 2017, 5(2), 16; doi:10.3390/economies5020016 -
Abstract
This paper examines the effect of remittances on household expenditure patterns applying propensity score matching methods that allow designing and analyzing observational data and enable reducing selection bias. We use data from the Nepal Living Standards Survey 2010/2011. In general, remittance recipient households
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This paper examines the effect of remittances on household expenditure patterns applying propensity score matching methods that allow designing and analyzing observational data and enable reducing selection bias. We use data from the Nepal Living Standards Survey 2010/2011. In general, remittance recipient households tend to spend more on consumption, health and education as compared to remittance non-receiving households. Although the findings do not clearly provide evidence of either the productive or non-productive use of remittances, expenditures on non-food investment categories, such as durable goods, health and education, are more apparent among remittance-receiving households compared to remittance non-receiving households, which signal the prospect of a sustainable long-term welfare gain among the former. Full article
Open AccessArticle
Sources of Economic Growth in Zambia, 1970–2013: A Growth Accounting Approach
Economies 2017, 5(2), 15; doi:10.3390/economies5020015 -
Abstract
Most empirical work on sources of economic growth for different countries lack country-specific empirical evidence to guide policy choices in individual developing countries and previous studies of factor productivity tend to focus on the entire economy or a single sector. This provides fewer
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Most empirical work on sources of economic growth for different countries lack country-specific empirical evidence to guide policy choices in individual developing countries and previous studies of factor productivity tend to focus on the entire economy or a single sector. This provides fewer insights about a country’s structural evolution. Unlike previous studies, our study builds on this by taking a more comprehensive approach in estimating Zambia’s sources of economic growth by sectors—agriculture, industry, and service—in a systematic manner that yields insights into the country’s sources of structural transformation. We use recently developed growth accounting tools to explicitly determine sources of economic growth at both national and sectoral levels in Zambia between 1970 and 2013. We use data from World Development Indicators and Zambia’s Central Statistical Office. Results indicate that, on average, total factor productivity (TFP) contributes about 5.7% to economic growth. Sectoral analysis shows that agriculture contributes the least to GDP and that, within each sector, factors that contribute to growth differ. Structural transformation has been slow and contributed to the observed inefficiency. We outline the implications of the observed growth and provide recommendations. Full article
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Open AccessArticle
Fréchet Distribution Applied to Salary Incomes in Spain from 1999 to 2014. An Engineering Approach to Changes in Salaries’ Distribution
Economies 2017, 5(2), 14; doi:10.3390/economies5020014 -
Abstract
The official data in relation to salaries paid in Spain from 1999 to 2014 has been analyzed. The inadequate data format does not reflect the whole salary distribution. Fréchet distributions have been fitted to the data. This simple distribution has similar accuracy in
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The official data in relation to salaries paid in Spain from 1999 to 2014 has been analyzed. The inadequate data format does not reflect the whole salary distribution. Fréchet distributions have been fitted to the data. This simple distribution has similar accuracy in relation to the data when compared to other distributions (Log-Normal, Gamma, Dagum, GB2). Analysis of the data through the fitted Fréchet distributions reveals a tendency towards more balanced (i.e., less skewed) salary distributions from 2002 to 2014 in Spain. Full article
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Open AccessArticle
The Role of Oil Prices in Exchange Rate Movements: The CIS Oil Exporters
Economies 2017, 5(2), 13; doi:10.3390/economies5020013 -
Abstract
Undoubtedly, oil prices play a crucial role in the macroeconomic performances of oil-exporting developing countries. In this regard, the exchange rate is one of the key macroeconomic indicators worthy of investigation. Existing literature shows that world oil prices play an important role in
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Undoubtedly, oil prices play a crucial role in the macroeconomic performances of oil-exporting developing countries. In this regard, the exchange rate is one of the key macroeconomic indicators worthy of investigation. Existing literature shows that world oil prices play an important role in the appreciation of the exchange rates of oil-exporting developing countries. However, only a few studies have examined this issue by considering all three oil-exporting countries of the Commonwealth Independent States, namely Azerbaijan, Kazakhstan and Russia, together. In order to fill this gap and given the increasing importance of these economies in the world’s energy markets, this paper examines the role of oil prices in the movement of real effective exchange rates of the above-mentioned CIS countries. We applied the autoregressive distributed lag bounds testing method with a small sample bias correction to the data of these countries over the 2004Q1–2013Q4 period. The estimation results indicate that oil prices are certainly a main driver behind real effective exchange rate appreciation in the selected economies. Moreover, estimations show that productivity, to some extent, can also lead to the appreciation. The policy implication of this research is that an appreciation of the real exchange rate is harmful for the exports of non-oil goods and services in these countries. Since oil prices lead to the appreciation mainly through higher domestic prices, which is a result of tremendous public spending, decision-makers should reconsider the prevailing fiscal policy to make it much more counter-cyclical. Full article
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Open AccessArticle
Household’s Perception of Water Quality and Willingness to Pay for Clean Water in Mexico City
Economies 2017, 5(2), 12; doi:10.3390/economies5020012 -
Abstract
A 2011 survey of Mexico City’s households revealed that families prefer alternative sources of drinking water instead of relying in the city’s quality supply services. These include the purchase of bottled water, installation of filtration devices, and other means of water purification. The
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A 2011 survey of Mexico City’s households revealed that families prefer alternative sources of drinking water instead of relying in the city’s quality supply services. These include the purchase of bottled water, installation of filtration devices, and other means of water purification. The demand for better water quality was tested by estimating the household’s willingness to pay (WTP), using a contingency valuation (CV) experiment through an open-format questionnaire and by estimating a censored econometric (Tobit) model. The econometric study revealed that the WTP for better water quality is influenced by variables related with distrust of the water quality provided by the City and the organoleptic characteristics of the water supply, as well as spending on bottled water or water purification technologies. The average WTP surcharge for better potable water quality is US$3.1 or 4.7% of the bimonthly water bill, which is about 0.22% of the average family income in Mexico City. The percentage of WTP to income is bigger in poor families. This suggests that improving water quality is of greater importance for lower income families. Findings are consistent with previous studies that estimated the WTP for improvements in the services that supply water to households in the city. These include reduction of inefficiency and intermittency of the supply along with water quality, improve measuring water meters, reducing the obsolescence of the infrastructure and increasing adequate maintenance. Our research is the first to estimate the WTP for better water quality in Mexico City and constitutes a reference point for those that address the problem of water quality and its impact on the welfare and income of families. Full article
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Open AccessArticle
Natural Resources and Productivity: Can Banking Development Mitigate the Curse?
Economies 2017, 5(2), 11; doi:10.3390/economies5020011 -
Abstract
This paper contributes to the literature concerning the natural resource curse by exploring the role of banking development in reducing the resource curse in a natural resource-based country, Yemen. Using time series data over the period 1980–2012, we find that natural resource dependence
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This paper contributes to the literature concerning the natural resource curse by exploring the role of banking development in reducing the resource curse in a natural resource-based country, Yemen. Using time series data over the period 1980–2012, we find that natural resource dependence is negatively related to productivity, and this relationship depends on the level of banking development. Increasing this level reduces the negative consequences of the natural resource curse. Therefore, policymakers should proactively encourage credit to enable the banking sector to play a more efficient intermediary role in mobilizing domestic savings and channeling them to productive investments. This will help to accumulate permanent productive wealth to enhance any diversification effort and compensate for the decline in natural resource production. Full article
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Open AccessArticle
The Status and Evolution of Energy Supply and Use in Mexico Prior to the 2014 Energy Reform: An Input-Output Approach †
Economies 2017, 5(1), 10; doi:10.3390/economies5010010 -
Abstract
In 2014, the Mexican government approved a bold energy reform that allows private energy companies to freely participate in the energy market (something prohibited during the previous eight decades). This reform is expected to significantly restructure the energy sector and boost and diversify
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In 2014, the Mexican government approved a bold energy reform that allows private energy companies to freely participate in the energy market (something prohibited during the previous eight decades). This reform is expected to significantly restructure the energy sector and boost and diversify the energy production. Moreover, changes in the energy sector and production might lead to structural changes in the rest of the economy and ultimately generate significant economic benefits for the country. Nevertheless, the fundamental role of the energy sector in this oil producing country makes the potential impacts of the reform complex to forecast. The objective of the study is to analyze the current state, evolution, and driving factors of the total primary energy use in Mexico in 2003–2012 (prior to the implementation of the reform) as a precedent for future analyses of impacts of the energy reform. The results show three driving factors of the evolution of primary energy use: final non-energy demand, direct energy intensity, and economic structure. Also, it was found that the energy sector has been in a precarious situation regarding its structure and efficiency. However, this situation had a small effect on the evolution of primary energy use. Full article
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Open AccessArticle
(Un)supported Current Tourism Development in UNESCO Protected Site: The Case of Old City of Dubrovnik
Economies 2017, 5(1), 9; doi:10.3390/economies5010009 -
Abstract
The main purpose of this paper is to explore and determine perceptions of residents living in the United Nations Educational, Scientific and Cultural Organization (UNESCO) protected site Old City of Dubrovnik (OCD) towards tourism development. Uncontrolled tourism expansion has impact on local residents’
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The main purpose of this paper is to explore and determine perceptions of residents living in the United Nations Educational, Scientific and Cultural Organization (UNESCO) protected site Old City of Dubrovnik (OCD) towards tourism development. Uncontrolled tourism expansion has impact on local residents’ life and on their (un)support for specific form of tourism development. Comprehension of residents’ perceptions is crucial for realization of adequate tourism development and for mutual satisfaction of tourism demand and supply. Therefore, the aim is to test the model of residents’ perceptions of economic, socio-cultural and environmental impacts of tourism on their (un)support for specific form of tourism development. To realize the purpose of this research, Cronbach alpha, explorative (EFC) and confirmatory (CFA) factor analysis, and structural equation modeling (SEM) were applied. The findings indicate that there is a direct relationship between residents who perceive positive and negative economic, socio-cultural and environmental impacts of tourism and their (un)support for tourism development. This paper points out the role and significance of the permanent residents’ perceptions research concerning the issues that are related to the quality tourism development due to the high interaction between local residents, tourists and local tourism development especially in the areas under the protection of UNESCO. Full article
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Open AccessArticle
The Impact of Foreign Direct Investment (FDI) on the Environment: Market Perspectives and Evidence from China
Economies 2017, 5(1), 8; doi:10.3390/economies5010008 -
Abstract
Foreign direct investment (FDI) may have a positive effect on the level of pollution in host countries, as described by the pollution haven hypothesis (PHH). However, this kind of effect may depend on the economic conditions in host countries. In this study, we
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Foreign direct investment (FDI) may have a positive effect on the level of pollution in host countries, as described by the pollution haven hypothesis (PHH). However, this kind of effect may depend on the economic conditions in host countries. In this study, we conduct research on the FDI’s effect on China’s CO2 emissions during the market-oriented reform. The results are as follows. Firstly, FDI directly promotes China’s CO2 emissions. Secondly, with market-oriented reform, this positive effect from FDI is lowering year by year, which indicates that the market-oriented reform could alleviate the positive effect of FDI on China’s CO2 emissions. Thirdly, as China’s market-oriented reform was implemented gradually from experimental zones to the whole country, regional market development is uneven, and as such so is FDI’s effect on local CO2 emissions. Provinces in the eastern area generally evidenced higher market development and lower CO2 emissions from FDI, while four provinces in west area evidenced both lower market development and higher CO2 emissions from FDI. Full article
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Open AccessArticle
Financial Reforms, Financial Development, and Economic Growth in the Ivory Coast
Economies 2017, 5(1), 7; doi:10.3390/economies5010007 -
Abstract
This study investigates the relationship between financial development and economic growth in the Ivory Coast over the period from 1961 to 2014. The final goal of this research is to develop a procedure to identify the effects of financial reforms for the Ivory
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This study investigates the relationship between financial development and economic growth in the Ivory Coast over the period from 1961 to 2014. The final goal of this research is to develop a procedure to identify the effects of financial reforms for the Ivory Coast economic growth. Therefore, to achieve this goal, we first conducted a common component analysis (CCA) on our time series data to create: (1) a variable that would be the most appropriate proxy for the financial development; and (2) a vector of control variables for economic growth. Second, a vector autoregression model (VAR) with restriction was used as an appropriate specification of the dynamic relationship between the proxy of financial development, economic growth and other important factors of that growth (vector of control variables). Results suggest that in the Ivory Coast, growth in financial development is synonymous with the overall economic growth of the national economy. This study addresses the controversy over the appropriate proxy for the financial development in the Ivory Coast and it establishes a causal relationship between the financial development and the national economic growth. Full article
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Open AccessArticle
Examining the ‘’Natural Resource Curse’’ and the Impact of Various Forms of Capital in Small Tourism and Natural Resource-Dependent Economies
Economies 2017, 5(1), 6; doi:10.3390/economies5010006 -
Abstract
The problem of the relevance of human and natural capital, as well as the potential adverse effect of natural capital on economic growth, has gained increased attention in development economics. The aim of this paper is to assess, theoretically and empirically, the relevance
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The problem of the relevance of human and natural capital, as well as the potential adverse effect of natural capital on economic growth, has gained increased attention in development economics. The aim of this paper is to assess, theoretically and empirically, the relevance of several forms of capital on economic growth in certain small economies that are dependent upon tourism or natural resources. The empirical framework is based on Impulse Response Functions obtained from Vector Autoregressive models in which we focus on the model where economic growth is the dependent variable for ten small economies that are dependent upon either tourism or natural resources. We find that there is evidence of the “natural resource curse”, especially in the economies that have a strong dependence on resources that are easily substitutable and whose prices constantly fluctuate. We further find that in the majority of observed cases, the type of capital these small economies are most dependent on for their economic growth causes negative impulses in the majority of the observed periods. Therefore, the main policy recommendation should be to assure that even these small economies should strive towards further diversification and avoid dependence on only one segment of their economy. Full article
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Open AccessArticle
The Impact of Terrorist Attacks on Foreign Exchange Rate: Case Study of Turkish Lira versus Pound Sterling
Economies 2017, 5(1), 5; doi:10.3390/economies5010005 -
Abstract
In this study, the impact of terrorist attacks on exchange rate is estimated. Particularly, the study focuses on terrorist attacks in Turkey and its implication on Turkish lira versus pound sterling exchange rate. In order to find the causal effect, the study employed
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In this study, the impact of terrorist attacks on exchange rate is estimated. Particularly, the study focuses on terrorist attacks in Turkey and its implication on Turkish lira versus pound sterling exchange rate. In order to find the causal effect, the study employed Autoregressive distributive lag (ARDL) bound testing approach as an estimation technique. Accordingly, the analysis reveals that a terrorist attack has a negative impact on the exchange rate in both the short-run and long-run. However, the negative effect of terrorism tends to be small in both the short-run and long-run. More precisely, terrorist attacks depreciate the exchange rate between Turkish lira and pound sterling by approximately 0.024% in the next trading day. The long-term effect also shows that a terrorist attack depreciates the exchange rate on average by 0.0706%. Full article
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Open AccessArticle
Financial Deepening and Economic Growth Nexus in Nigeria: Supply-Leading or Demand-Following?
Economies 2017, 5(1), 4; doi:10.3390/economies5010004 -
Abstract
This paper examined the direction of causality between financial deepening and economic growth in Nigeria for the period 1970–2013. The study adopted the Toda–Yamamoto augmented Granger causality test and results showed that the growth-financial deepening nexus in Nigeria follows the supply-leading hypothesis. This
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This paper examined the direction of causality between financial deepening and economic growth in Nigeria for the period 1970–2013. The study adopted the Toda–Yamamoto augmented Granger causality test and results showed that the growth-financial deepening nexus in Nigeria follows the supply-leading hypothesis. This means that it is financial deepening that leads to growth and not growth leading financial deepening. Among other things, the study recommended that policy efforts should be geared towards removing obstacles that undermine the growth of credit to the private sector, and must restore investors’ confidence in the stock market operations. Full article
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Open AccessArticle
Leaning against the Wind Policies on Vietnam’s Economy with DSGE Model
Economies 2017, 5(1), 3; doi:10.3390/economies5010003 -
Abstract
The global financial crisis of 2007–2008 had a negative impact on many countries, including Vietnam. Many policies have been applied to stabilize the macro-economic indicators. However, most of them are based on old qualitative models, which do not help policy makers understand deeply
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The global financial crisis of 2007–2008 had a negative impact on many countries, including Vietnam. Many policies have been applied to stabilize the macro-economic indicators. However, most of them are based on old qualitative models, which do not help policy makers understand deeply how each one affects the economy. In this paper, we investigate a quantitative macro-economic approach and use leaning against the wind policies with the Dynamic Stochastic General Equilibrium model (DSGE) to find a better way to understand how policies stabilize the Vietnamese economy. Based on the framework of Gerali et al., we calibrate the hyper-parameter for Vietnam financial data and do the comparison between the standard Taylor rule and the cases in which we add asset price and credit elements. The results show that the credit-augmented Taylor rule is better than the asset-price-augmented one under the technology shock and contrary to the cost-push shock. Moreover, the extended simulation result shows that combining both asset-price and credit rules on the model is not useful for Vietnam’s economy in both types of shock. Full article
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Open AccessEditorial
Acknowledgement to Reviewers of Economies in 2016
Economies 2017, 5(1), 2; doi:10.3390/economies5010002 -
Abstract The editors of Economies would like to express their sincere gratitude to the following reviewers for assessing manuscripts in 2016.[...] Full article
Open AccessArticle
Financial Reforms and Determinants of FDI: Evidence from Landlocked Countries in Sub-Saharan Africa
Economies 2017, 5(1), 1; doi:10.3390/economies5010001 -
Abstract
The recognition of Foreign Direct Investment (FDI) as a source of funding to foster economic development in both developed and developing countries has been in ascendancy. The prime purpose of this study is to empirically investigate the determinants of FDI for the “landlocked
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The recognition of Foreign Direct Investment (FDI) as a source of funding to foster economic development in both developed and developing countries has been in ascendancy. The prime purpose of this study is to empirically investigate the determinants of FDI for the “landlocked countries” in Sub-Saharan Africa over the period 1995–2013. By employing panel data analysis, the result of the study revealed that domestic investment, trade (openness), human capital, political constraint, natural resource endowment and the market size (with the GDP growth as proxy) as having positive impact on determining FDI flow into the sample countries with only the countries’ tax policies seen otherwise. Our study not only contributes to existing literature on FDI determinants by investigating landlocked countries of Sub-Saharan Africa (SSA) for the first time but also includes natural resources that the landlocked countries are endowed with, tax policies and political constraints in such countries for the stipulated period. Full article
Open AccessArticle
Does Financial Development Drive Private Investment in Ghana?
Economies 2016, 4(4), 27; doi:10.3390/economies4040027 -
Abstract
There is ample evidence from economic growth literature that investment accelerates economic growth and development of developing countries, of which Ghana is not an exception. Based on this, recent growth and development policies in Ghana have focused more on encouraging private sector investment
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There is ample evidence from economic growth literature that investment accelerates economic growth and development of developing countries, of which Ghana is not an exception. Based on this, recent growth and development policies in Ghana have focused more on encouraging private sector investment through the development of the financial sector. This paper investigates the short- and long-run impact of financial development on private investment in Ghana for the years 1970–2014. Additionally, to find out whether the measurement of financial development matters for private investment, several indicators of financial development are used. The results, based on the ARDL bounds testing approach to cointegration, suggest that financial development has not been a key driver of private investment in the long run, while, in the short run, the effect of financial development on private investment depends on how financial development is measured. Given these results, policy makers should be circumspect regarding the choice of financial development indicator used as a policy instrument in the design and implementation of private investment policies for Ghana. Full article
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Open AccessArticle
Remittances, Development Level, and Long-Run Economic Growth
Economies 2016, 4(4), 28; doi:10.3390/economies4040028 -
Abstract
This paper seeks to enrich the field of research on the topic of the impact of remittances on long-run economic growth. Using an unbalanced panel data covering a sample of 116 countries with different development levels over the period 1990–2014, we studied the
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This paper seeks to enrich the field of research on the topic of the impact of remittances on long-run economic growth. Using an unbalanced panel data covering a sample of 116 countries with different development levels over the period 1990–2014, we studied the interaction between remittances and the level of economic development, as well as its impact on long-run economic growth—because the impact of remittances could be influenced by the development level of the receiving countries. In parallel, we explored the hypothesis about diminishing a country’s capacity to use remittances for promoting long-run economic growth as the abundance of remittances increases. To control the endogeneity while estimating the impact of remittances on long-run economic growth, we used OLS (ordinary least squares) with FD (first differences) transformation and FE (fixed effects) approaches and other controls of long-run growth. Our results showed that in general remittances have a positive impact on long-run economic growth, but the impact differs based on the country’s economic development level and the abundance of remittances in the economy. Full article
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Open AccessArticle
The Impact of Financial Development on Economic Growth in Nigeria: An ARDL Analysis
Economies 2016, 4(4), 26; doi:10.3390/economies4040026 -
Abstract
This study empirically examines the relationship between financial intermediary development and economic growth in Nigeria over the period 1981–2011 using the auto-regressive distributed lag (ARDL) approach to co-integration analysis. The results show that the relationship between financial development and economic growth in Nigeria
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This study empirically examines the relationship between financial intermediary development and economic growth in Nigeria over the period 1981–2011 using the auto-regressive distributed lag (ARDL) approach to co-integration analysis. The results show that the relationship between financial development and economic growth in Nigeria is not significantly different from what has been observed generally in oil-dependent economies. The relationship between financial intermediary development and economic growth in Nigeria is found to be insignificantly negative in the long-run and significantly negative in the short-run. The results highlight the dominant role of the oil sector in economic activities in Nigeria. Full article
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Open AccessArticle
Stock Market and Sustainable Economic Growth in Nigeria
Economies 2016, 4(4), 25; doi:10.3390/economies4040025 -
Abstract
This paper examines the relationship between stock market evolution and sustainable economic growth in Nigeria. The study employs Auto-Regressive Distributed Lag (ARDL)-bounds testing approach and a combined stock market indicators index to examine the relationship. The paper finds that, in the long run,
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This paper examines the relationship between stock market evolution and sustainable economic growth in Nigeria. The study employs Auto-Regressive Distributed Lag (ARDL)-bounds testing approach and a combined stock market indicators index to examine the relationship. The paper finds that, in the long run, stock markets have no positive and at best mixed effect on economic growth in Nigeria. This finding supports the numerous past studies, which have reported negative/mixed or inconclusive results on the effects of stock markets on economic growth. The paper, therefore, concludes that, there is the need for increasing financial deepening and the removal of bottlenecks in the financial sectors of the economy by providing further public and institutional education on the value of stock markets for economic development. Full article
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