Does FDI Regulatory Policies Influence FDI Inflows in Developing Countries? A Non Linear Analysis

Purpose: Foreign Direct Investment (FDI) inflow is regarded as highly important particularly for developing countries as it enhances economic activities and creates job opportunities. The main objective of the present study is to analyze the impact of two regulatory policies i.e. Regulatory Restrictiveness Index (RRI) and Ease of Doing Business (EDB) on FDI inflows in developing countries. Research Gap: Not many studies have discussed the role of more than one regulatory policy to examine their impact on FDI inflows. Therefore, the present study is an attempt to bridge this research gap as it uses two regulatory policies to examine this relationship. Design/Methodology/Approach: The study performs the non-linear analysis using two separate models to determine FDI inflows in 39 developing countries for the period 1997-2020.For this purpose FGLS econometric technique is utilized. The Main Findings: The linearized marginal effects of RRI show that all the countries are located on the left side of U shaped curve while linearized marginal effects of EDB show that some countries lie on the left side and others lie on the right side of U shaped curve. The higher value of the level coefficient than the value of the quadratic coefficient reveals the stronger influence of level coefficients in both models. Theoretical/Practical Implications of the Findings: The study concludes that developing countries need to reduce FDI restrictions to attract maximum FDI inflows. Furthermore, it is recommended that for improving the confidence of foreign investors, appropriate and consistent policies should be designed and implemented

Moderation of services’ EKC through transportation competitiveness: PQR model in global prospective

The continuously increasing GHG emissions have created environmental pollution and several challenges to ecosystems and biodiversity. The challenges of climate change are multipronged, resulting in melting glaciers, flash floods, and severe heat waves. In this regard, the adaptive and mitigation strategies to manage the consequences of climate change are highly important. The transport sector creates a quarter of carbon emissions, and this share is continuously increasing. Accordingly, this research study uses transport competitiveness to determine carbon emissions of the transport sector for 121 countries covering the time period from 2008 to 2018. The Panel Quantile Regression (PQR) technique is engaged to analyze the study results. The findings highlight that transport competitiveness tends to increase carbon emissions of the transport sector across quantile groups 1 and 3, while it reduces carbon emissions in quantile group 2. The U-shaped services’ EKC is validated in quantile groups 2 and 4. The moderation engaged, i.e., transportation competitiveness, changes the turning point of the services’ EKC across quantile groups 2 and 4. However, in the high-CO2 quantile group, the moderation impact of transport competitiveness is strongest as it reduces the sensitivity by flattening the services’ EKC. Furthermore, the planned expansion of the population and improved institutional quality tend to mitigate carbon emissions across different quantile groups. The policy relevance/implications that are based on the study results/findings are made part of the research paper

Causes of higher ecological footprint in Pakistan: Does energy consumption contribute? Evidence from the non-linear ARDL model

The impact of human activities on environmental degradation has been increasing over time, and ecological footprint measures the impact of human activities on the environment. An increase in ecological footprint has created alarming situations around the globe. This study explores the causes of Pakistan’s high ecological footprint (EFP). The asymmetric analysis of fossil fuels and renewable energy consumption on EFP has been carried out from 1990 to 2020. The results obtained from the NARDL approach revealed that the positive shocks of fossil fuel consumption increase EFP, but its negative shocks decline EFP. Meanwhile, both positive and negative shocks of renewable energy consumption decline EFP in Pakistan. This study suggests that renewable energy consumption can play a significant role in reducing the EFP in Pakistan

AN EMPIRICAL INVESTIGATION OF DOMESTIC AND EXTERNAL DETERMINANTS OF INFLATION IN PAKISTAN

Abstract. In this study ARDL approach is applied for estimating the long-run and short-run relationship among the variables using annual data for the period 1972-2010. The results show that in the long-run money supply growth, lagged inflation, foreign inflation and dummy variable for global financial crises 2008 have positive and significant impact on inflation in Pakistan. Further, except money supply all the variables affect inflation in the short-run. The significant and negative coefficient of lagged error correction term is an indication of the convergence towards long-run equilibrium. The study recommends that in rapidly globalizing world, serious considerations need to be given by policy makers to external shocks like foreign inflation and global crises for formulating policies which help in controlling inflation in Pakistan

Institutional Quality and Economic Growth: Panel ARDL Analysis for Selected Developing Economies of Asia

The role of institutions in economic growth has received much attention of the researchers and policy makers in the last two decades. The literature available on this issue is not clear. The literature reveals that there is a growing dissatisfaction over the neo-classical and endogenous growth models. In recent literature institutional economics has emerged for determining the economic growth. In view of this fact, the present study is an attempt to explain the impact of institutional quality on economic growth in developing economies of Asia. The study uses panel data for the period 1990-2013 for 13 developing economies of Asia. Institutional quality index has been constructed by using principal component analysis. The results of Panel ARDL show that institutional quality has positive impact on economic growth. The results of panel causality test show that causality runs from institutional quality to economic growth. The study stresses that for increasing economic growth there is a need to improve institutional quality in selected Asian developing countries

The Role of Institutional Quality in Enhancing Social Cohesion

Social cohesion is considered to be important for a society. The role of state institutions is to bring state closer to its population. The effective connection between state and society may be possible only through changing institutions. Present study is an attempt to explore the impact of institutional quality in enhancing social cohesion in a society. For analysis purpose, the study uses five year average panel data from 1990 to 2010 of 68 developing countries. For estimation purpose fixed effect and random effect models as suggested by Hausman test have been used in different specification of the model. The results of the study reveal that better institutional quality enhances social cohesion and income inequality is a threat to social cohesion while diversity is not a harmful to social cohesion. Furthermore, equality and prosperity both enhance social cohesion. The study recommends that on one hand efforts should be made to reduce inequality and on the other hand there is a need to build up social cohesion. These can be achieved through redesigning the institutions ensuring that it is better fit to local needs. The study concludes that social cohesion can be achieved through introducing and re-structuring the policy reforms in developing countries

Impact of Social, Political and Economic Globalization on Gender Inequality Index in Pakistan: A Time Series Analysis

This study is designed to calculate the newly introduced Gender Inequality Index for Pakistan according to the formula mentioned in technical notes of United Nations Development Report (2010) and then finding the impact of Social, Political and Economic Globalization on Gender Inequality Index. Time series data from 1980 to 2014 is used for Gender Inequality Index, Social, Political and Economic Globalization. Johnsons Co-integration technique is applied to investigate the impact of social, economic and political globalization on gender inequality index in Pakistan. The results of study show negative and significant relationship between economic globalization, social globalization and gender inequality index, while a negative but insignificant relationship is found between political globalization and gender inequality index. The results of the study are consistent with various theoretical and empirical studies. The policies related to globalization promotion are recommended to enrich the country with development through gender balances. To increase impact of political globalization, Pakistan needs to put more emphasis in following the spirit of treaties which target gender disparity of which she is the signator

Measuring Socioeconomic Stratification and Mobility Pattern: A Case Study of Intra-Generational and Intra-Temporal Household Mobility of Southern Punjab, Pakistan

The stratification process and mobility pattern describe the socio-economic changes in society over the time period rather than at one point in time. The main objective of this study is to analyze the socioeconomic stratification of society and mobility across the time on the basis of base and final year socioeconomic stratification indicators of Pakistan. For this purpose primary data has been collected from three districts of Southern Punjab on the basis of education as prevalence rate. The transformation results depict the sign of divergence of society with increasing size of ruler strata which is not due to reduction in the size of bottom strata. Furthermore, an increase in income has not much impact on consumption behavior of households rather it exerts emphasis on material achievements in Southern Punjab. The study concludes that the degree of socio-economic mobility has been positively related to the life chances of society and shows the symptoms of pro-poor growth

Bilateral Trade Intensity and Business Cycle Synchronization Nexus: An Analysis from Major Trading Partners of Pakistan

The existing research on the relationship between bilateral trade and business cycle synchronization (BCS) is limited in the context of developing countries like Pakistan. Theoretically, bilateral trade can lead to convergence as well as divergence of business cycles depending upon prevailing economic conditions in a country. The present study is an attempt to explore the relationship between bilateral trade and business cycle synchronization in Pakistan. For empirical analysis, data of six major trading partners of Pakistan is collected for the period 1991-2017 and multidimensional fixed effect estimation technique has been used. The results of the study show that bilateral trade has significant and positive impact on BCS. The coordination of fiscal and monetary policies appear to be significant determinants of GDP synchronization. These results have strong implications for policymakers and practitioners for formulating and implementing policies for Pakistan to get the maximum benefits of BCS

Fiscal Impacts of Demographic Transition in Pakistan

This study has examined the fiscal impacts of the demographic transition. Declining fertility rate and increasing life expectancy rate are expected to cause ageing in Pakistan. The population projections of United Nation’s World Population Prospects were used, for projecting the labour force, which uses different scenarios to project population namely low variant, medium variant and high variant scenario. The study found that projected labour force is expected to decline under the medium variant scenario. The study examined the impact of expected decline in labour force on output growth of Pakistan using growth accounting technique, and found that under medium variant scenario, Pakistan is expected to face a loss of 4% of GDP at the end of this century. On the expenditure side, this study attempted to measure the impact of demographic transition on pension expenditures. Due to the increase in the proportion of the dependent population pension expenditures are expected to rise from 1.2% of GDP in 2015 to 3.5% of GDP by the end of the century. Due to the increase in old-age dependency ratio and hike in pension expenditures of Pakistan pay-as-you-go pension system is expected to become fiscally unsustainable as fewer workers would be bearing the burden of aged population. This fact advocates transition from pay-as-you-go pension system to fully funded pension system