Search Results (41)

This paper investigates the determinants of economic growth in EU member states that joined the Union in 2004 and later, focusing on institutional quality, competitiveness, and the green transition. Three composite indices are constructed using principal component analysis (PCA) and incorporated into a panel ARDL-PMG model, complemented by robustness checks with fixed-effects and system-GMM estimators. The results highlight competitiveness as the most robust driver of growth across specifications, while institutional quality emerges as an enabling factor, particularly under dynamic specifications that account for endogeneity. The green transition shows significant long-run benefits, although its short-run effects are weaker, reflecting the gradual payoff of environmental investments. Policy implications emphasize the importance of strengthening institutional frameworks, fostering innovation and productivity, and sustaining commitments to the green transition as pillars of sustainable convergence. The findings enrich the literature on EU integration and provide evidence-based insights for aligning cohesion policy and the European Green Deal with growth objectives. Full article

Gulf Cooperation Council (GCC) economies are investing heavily in digital infrastructure to diversify beyond hydrocarbons, yet the productivity returns from these investments remain uncertain. This study examines whether digital adoption enhances labor productivity in GCC economies (2000–2023). We construct a Composite Digital Index (CDI) from broadband subscriptions, internet use, and mobile penetration. Interpreting the Gulf economies as socio-technical systems, we frame digital adoption, productivity, and investment (measured by GCF) as a reinforcing loop, with government effectiveness amplifying the cycle and oil rents dampening it. Using panel data methods, including fixed-effects and long-run estimators, we find that digital adoption yields persistent productivity gains. In the long run, a one-point increase in CDI is associated with a 12.6 percentage point rise in labor productivity growth (p < 0.05). This effect triples—to approximately 38.5 percentage points—when moderated by strong government effectiveness (CDI × Governance interaction: +26.3; p < 0.01). Conversely, the productivity payoff declines significantly with oil-rent dependence: for every 10 percentage-point rise in oil rents, the marginal effect of digital adoption drops by 3.4 points. These gains are significantly larger where government effectiveness is stronger, while oil dependence weakens them. The findings imply that infrastructure adoption alone is insufficient: institutions and fiscal structures condition whether digital adoption translate into sustained productivity growth. Policy priorities should focus on institutional reform, fiscal diversification, and enabling firm-level digital absorption—particularly in high-rent economies—so that adoption translates into broad-based productivity dividends. Full article

This study investigated how banks’ balance sheet fundamentals shape their credit growth using panel co-integration methods and two estimation methods—pooled mean group (PMG) and dynamic fixed effects (DFE). Both approaches yielded consistent core results. First, weaker asset quality, proxied by higher non-performing loans (NPLs), was strongly and negatively related to credit growth: PMG produced a large negative long-run coefficient, and DFE’s error-correction form confirmed a significant adverse effect, consistent with higher provisioning, thinner capital buffers, and lower risk-taking. Second, capitalization (equity to assets) supported long-run growth under PMG, while DFE—imposing common slopes—did not, suggesting heterogeneous capitalization effects across banks that PMG captured but DFE muted. Third, operating expense intensity showed a positive long-run association with credit growth in both models, consistent with expansionary spending accompanying durable lending rather than costs causing lending. Long-run effects for liquidity and market-risk sensitivity were weaker or mixed: liquidity’s role was imprecise, and market-risk sensitivity was positive in PMG but not significant in DFE, again pointing to cross-sectional heterogeneity. Error-correction terms were large, negative, and highly significant in both models, indicating rapid convergence—near full adjustment within one period, with slight overshooting in DFE. Short-run results showed that higher liquidity and temporary cost spikes dampened contemporaneous growth. Policy implications emphasize sustained oversight of asset quality and prudent capital planning to support long-run credit supply. Full article

This study explores the relationship between electricity consumption and financial development in 20 emerging market economies (EMEs) from 2000 to 2020. Employing the panel ARDL–PMG estimator and a two-step system GMM to address endogeneity, we identify a significant positive long-run cointegrating relationship, where electricity consumption fosters financial development. The estimated error correction term suggests a stable equilibrium, with deviations corrected at a 29% annual rate, in the short-run adjustment. These results underscore the significance of targeted energy investments in driving financial market growth. Policies promoting grid action, renewable integration, and innovative financing tools, such as green bonds, can align electricity expansion with financial stability objectives. By incorporating recent global disruptions and applying advanced econometric methods, this study provides updated empirical evidence and actionable policy insights on the electricity–finance nexus in EMEs. Full article

This paper examines the long-term and causal relationship between petroleum consumption and financial development in selected emerging market economies (EMEs) from 2000 to 2020. Using panel cointegration and an error correction model (ECM), the study captures both the short- and long-run dynamics of the petroleum–finance nexus while accounting for cross-country heterogeneity. The results show a significant long-run elasticity of petroleum consumption with respect to financial development, while the error correction term confirms robust convergence to equilibrium. In contrast, the short-run effects are insignificant, indicating that petroleum consumption does not immediately influence financial development. These findings highlight the need for robust energy policies that strengthen financial markets and support sustainable growth. Policymakers should prioritize infrastructure investments, strengthen financial linkages in the energy sector, and promote diversification to reduce the risks associated with petroleum dependence. Full article

The transportation sector plays a pivotal role in economic development but is also a major contributor to environmental degradation due to its reliance on fossil fuels. This study explores the relationship between transport-related CO₂ emissions, economic growth, road and rail freight transport, industry, trade openness, fossil fuel consumption, financial development, and renewable energy in ten landlocked countries from 1990 to 2022. Using panel cointegration tests and PMG-ARDL techniques, the findings reveal a bidirectional causality between CO₂ emissions, road freight, financial development, and industry. Road freight transport significantly boosts economic growth but also intensifies emissions, while renewable energy effectively mitigates transport-related CO₂. The results emphasize the need for policymakers to balance economic advancement with sustainable energy and emission reduction strategies. Achieving economic-energy sustainability is essential for fostering a green and clean environment without compromising growth. Full article

This study examines the dynamic interplay between interest rates, inflation, and GDP growth in Southeast Asian economies from 2000 to 2023, employing the Panel ARDL framework with the Pooled Mean Group (PMG) model. The findings confirm a robust long-term relationship among the Deposit Interest Rate (DIR), Lending Interest Rate (LIR), Consumer Price Index (CPI), and GDP growth. Higher deposit rates consistently promote economic expansion by encouraging savings and investment, while lending rates support long-term growth but limit short-term activity due to higher borrowing costs. Inflation adversely affects long-term growth by reducing purchasing power but boosts short-term demand. Historical GDP trends highlight the region’s susceptibility to global shocks, such as the 2008–2010 financial crisis and the 2020 COVID-19 pandemic, with forecasts indicating a gradual recovery from 2021 to 2025. The study emphasizes the importance of balanced monetary policies to enhance growth and stability in Southeast Asia, providing practical insights for policymakers addressing global and regional economic challenges. Full article

This study examines the impact of renewable energy, economic growth, and trade openness on CO₂ emissions in the EU-15 countries over the period 1980–2022, employing the ARDL modeling framework. In addition, a panel PMG-ARDL model is employed as a robustness check. The analysis identifies cointegration among the variables in 11 out of the 15 countries studied. Economic growth is found to increase CO₂ emissions, highlighting the ongoing challenge of aligning economic expansion with environmental objectives. The estimated coefficients for economic growth range from 0.43 to 5.70, depending on the country. Renewable energy significantly reduces emissions, highlighting its critical role in achieving sustainability (the corresponding coefficient moves in the range −0.13 to −0.96). Trade openness generally shows a neutral impact on emissions across most cases. Overall, renewable energy contributes to reducing CO₂ emissions, whereas the effects of economic growth and trade openness remain mixed and country-specific. These findings highlight the need to promote cleaner technologies, enhance energy efficiency, and ensure broader access to environmentally friendly energy sources. Full article

This study examines the impact of personal remittances on housing prices in European Union (EU) countries, while also accounting for a broader set of macroeconomic, demographic, and structural variables. Using annual data for 27 EU countries from 2007 to 2022, we employ a comprehensive panel econometric approach, including cross-sectional dependence tests, second-generation unit root tests, pooled mean group–autoregressive distributed lag (PMG-ARDL) estimation, and panel causality tests, to capture both short- and long-term dynamics. Our findings confirm that remittances significantly and positively influence long-term housing price levels, underscoring their relevance as a demand-side driver. Other key variables such as net migration, GDP, travel credit to GDP, economic freedom, and real effective exchange rates also contribute to housing price movements, while supply-side indicators, including production in construction and building permits, exert moderating effects. Moreover, real interest rates are shown to have a significant long-term negative effect on property prices. The analysis reveals key causal links from remittances, FDI, and net migration to housing prices, highlighting their structural and predictive roles. Bidirectional causality between economic freedom, housing output, and prices indicates reinforcing feedback effects. These findings position remittances as both a development tool and a key indicator of real estate dynamics. The study highlights complex interactions between international financial flows, demographic pressures, and domestic economic conditions and the need for policymakers to consider remittances and migrant investments in real estate strategies. These findings offer important implications for policymakers seeking to balance housing affordability, investment, and economic resilience in the EU context and key insights into the complexity of economic factors and real estate prices. Importantly, the analysis identifies several causal relationships, notably from remittances, FDI, and net migration toward housing prices, underscoring their predictive and structural importance. Bidirectional causality between economic freedom and house prices, as well as between housing output and pricing, reflects feedback mechanisms that further reinforce market dynamics. These results position remittances not only as a developmental instrument but also as a key signal for real estate market performance in recipient economies. Full article

This study investigates the relationship between ESG performance and economic growth in BRICS nations from 2000 to 2020, aiming to understand how ESG practices influence development trajectories. By integrating economic theories with relevant conceptual frameworks, this study provides a comprehensive analysis of ESG dynamics in emerging economies. The purpose of this study is to determine how the economic growth of the BRICS countries between 2000 and 2020 was impacted by ESG performance at the national level. This work contributes to the body of knowledge by offering a fresh macroeconomic examination of the connection between economic growth and ESG performance in the BRICS nations, a topic that is still relatively unexplored in comparison to firm-level research. A significant knowledge gap on how developing economies strike a balance between rapid economic expansion and environmental and social sustainability is filled by the research’s use of a thorough national-level ESG framework. The study employed a dynamic panel auto regressive distributed lag (ARDL) model, utilising a dynamic pooled mean group (PMG) ARDL econometric technique for both short- and long-term estimates. The findings reveal a short-term negative relationship between ESG performance and economic growth in the BRICS countries, which implies that there are high transitional effects involved in sustainable growth solutions. It also highlights the structural and developmental heterogeneity among BRICS countries. Moreover, the study highlights that carbon emissions positively influence short-term economic growth, underscoring the challenge of balancing sustainability with the continued reliance on fossil fuels in these economies. However, the long-term results show that strong ESG practices ultimately positively affect economic growth, reinforcing the importance of investing in sustainable development for achieving high-quality, long-term prosperity. This conclusion emphasises that, while short-term trade-offs may exist, robust ESG frameworks are crucial for fostering enduring economic and environmental well-being. Full article

The transition to sustainable, innovation-driven economies has become a global imperative, particularly for resource-dependent regions like the Middle East, where environmental challenges, fossil fuel reliance, and economic diversification pressures intersect. In this context, green innovation plays a pivotal role in mitigating environmental degradation while supporting long-term economic growth. This study examines the short-term and long-term drivers of green innovation across 13 Middle Eastern countries from 1990 to 2023, with a focus on environmental governance, environmental pollution, economic growth, and natural resource abundance. Using a balanced panel dataset, this study applies Frees, Friedman, and Pesaran CSD tests to address cross-sectional dependency and second-generation unit root tests for data stationarity. Both first- and second-generation cointegration tests confirm long-run relationships among variables. The empirical analysis employs the cross-sectional autoregressive distributed lag (CS-ARDL) model, alongside Pooled Mean Group (PMG-ARDL), Average Mean Group (AMG), and Common Correlated Effects CCEMG estimators, ensuring robustness. The findings indicate that, in the long term, environmental governance, economic growth, population size, and natural resource abundance significantly promote green innovation, with respective coefficients of 0.3, 0.01, 0.02, and 0.4. Conversely, human development and environmental pollution exert a negative influence on green innovation, particularly over the long term. These results suggest that, while economic and governance factors drive innovation, human capital development may prioritize immediate growth over sustainability, and pollution may hinder long-term innovation. Enhancing environmental governance, accelerating renewables, using strategic resource revenue for green projects, integrating green growth, and regional collaboration can position Middle Eastern economies as green innovation leaders. Full article

This study analyzes the influence of natural resource rents, governance indicators, and their interactions on economic growth in twelve oil-producing countries in the MENA region from 2002 to 2021. Various versions of a panel ARDL model are estimated using PMG, MG, and DFE estimators. The results suggest that natural resource rents in MENA oil-producing countries positively affect long-term economic growth when accompanied by good governance. Government effectiveness and control of corruption also contribute positively to economic growth in the long run. Furthermore, financial development is found to enhance long-term economic growth. These findings highlight the potential of natural resources to drive economic growth when supported by strong institutions. To maximize natural resource rent benefits, MENA countries should improve governance indicators such as government effectiveness, control of corruption, and rule of law. This includes enhancing civil service competence, decision implementation, and managing political pressure. Key factors include revenue mobilization, infrastructure quality, policy consistency, and penalties for corruption. Ensuring equality under the law, transparent legal processes, an independent judiciary, and access to legal remedies are crucial for effective rule of law. Additionally, MENA countries should prioritize developing non-oil sectors like tourism, industry, technology, entertainment, transportation, and communication. Full article

The role of carbon emissions in the worsening of global warming and other climate change implications has been well recognised. This study empirically investigates the effect of economic growth, urbanisation, and energy consumption on carbon emissions using panel cointegration tests and pooled mean group autoregressive distributed lag (PMG-ARDL) techniques. The research is based on panel data from Western Balkan countries spanning 2001 to 2022. Urbanisation is incorporated into the model to determine its significance in the dynamic relationship among economic growth, energy consumption, and carbon emissions. The inclusion of urbanisation in the Western Balkans context is particularly novel because of its acceleration in this region. The findings suggest that energy consumption, economic growth, and urbanisation significantly affect environmental quality in the long run. In contrast, it has been demonstrated that only economic growth significantly impacts the environment in the short run. Subsequent investigations have revealed that environmental distortion is a long-term consequence of energy consumption, urbanisation, and economic expansion in the examined nations. These countries must prioritise enhancing energy efficiency, urban planning, and pollution mitigation measures while ensuring that economic growth remains unhindered. Full article

Despite the growing emphasis on sustainable development, the role of green finance in the context of G7 economies remains largely unexplored. The increasing emphasis on green financial transformation motivates this study to analyze the influence of natural resources (NARSs), population (POPS), education (EDCT), trade (TRD), and economic growth (ECNG) on green finance (GRF) in G7. Using panel data from 1996 to 2021, this study employs the Pooled Mean Group Autoregressive Distributed Lag (PMG-ARDL) methodology to investigate both the long-run and short-run relationships among these variables. To address the issue of possible heterogeneity, this study uses Cross-Sectional Autoregressive Distributed Lag (CS-ARDL). Before applying the PMG-ARDL methodology, this study conducted a series of pretests to ensure data reliability and address potential endogeneity issues. These included tests for cross-sectional dependence, slope homogeneity, variance inflation factor (VIF) analysis, Cross-sectionally Augmented Im-Pesaran-Shin (CIPS) unit root testing, and the Westerlund cointegration test. The PMG-ARDL outcomes show a positive relationship between NARS, ECNG, POPS, TRD, EDCT, and GRF. Specifically, a 1% increase in NARS, ECNG, POPS, TRD, and EDCT leads to a corresponding increase in GRF by 0.050%, 1.98%, 1.81%, 0.62%, and 0.20%, respectively. This study provides valuable policy recommendations for G7 countries, emphasizing the need for targeted strategies to enhance green finance through the sustainable management of natural resources, economic growth, education, and trade. Full article

In the context of the Environmental Phillips Curve hypothesis, this study investigates the impact of unemployment on environmental quality in ten emerging economies with the highest carbon emissions, as identified in the International Monetary Fund’s 2015 World Economic Outlook. The primary aim of this study is to estimate the effects of income, natural gas usage, renewable energy usage, unemployment, and population size on carbon dioxide emissions in the selected countries. The study utilizes panel data from 1990 to 2019 and employs an Autoregressive Distributed Lag model (ARDL) to evaluate the short- and long-run relationships between these variables. Findings obtained using the Pooled Mean Group (PMG) estimator indicate that both income and population size have a significant positive impact on air pollution levels, whereas natural gas consumption and the use of renewable energy correlate with a decrease in emissions. The results support a negative correlation between unemployment and environmental degradation, aligning with the EPC. The error correction term suggests that the process returns to equilibrium in about 2.8 years. The findings are validated through robustness tests utilizing the Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) estimators. This study offers important insights for environmental policymaking in these emerging economies, emphasizing the importance of sustainable development strategies and green energy adoption. Full article