An Empirical Analysis of Stock Market Integration in selected African Countries

This study employs cointegration technique to determine the co-movement of 10 African national stock markets indexes, using monthly indexes spanning February 1997 to October, 2011. Results demonstrate less than full cointegrating vectors, which suggest that African stock markets are not fully integrated. Further findings indicate that big African stock markets indexes influence fluctuations in small African markets indexes. Generally, this implies limited benefits accrue from portfolio diversification within Africa stock markets

Electricity consumption and economic growth: trivariate investigation in Botswana with capital formation

This study investigates the relationship between electricity consumption and real gross domestic product in Botswana (the world’s largest producer of diamonds). The study includes capital formation in a trivariate system for the period covering 1980-2008. Zivot and Andrews (1992) unit roots test; bound test for cointegration, and Granger causality test are employed. Unidirectional causality is found from electricity consumption to real gross domestic product is in line with study of Altinay and Karagol (2005) among others. The long run estimate reinforce the Granger causality tests by indicating that electricity consumption is positively associated with real gross domestic product in the long run. Further findings suggest unidirectional causality from capital formation to real gross domestic product. The implication is that Botswana- being a highly energy dependent country- will have the performance of its capital formation on the economy partly determined by adequate electricity

Persistence analysis of research intensity in OECD countries since 1870.

This paper analyses the persistence of research intensity in the OECD over the period 1870–2018. The goal is to test if the conclusion of the study conducted by Ang and Madsen (Ang, J. B., & Madsen, J. B. (2011). Can second-generation endogenous growth models explain the productivity trends and knowledge production in the Asian miracle economies? The Review of Economics and Statistics 2011, 93(4), 1360–1373), namely that the Schumpeterian growth models predict that research intensity is stationary, is correct. Using fractional integration methods on annual research intensity from 16 OECD countries, we observe that the series are very persistent. The order of integration is observed to be statistically higher than 1 in all the countries except Spain, rejecting thus the hypothesis of stationarity. When the likelihood of non-linear trends is considered in the analysis, the results are not materially different. An implication of the results is that policies aimed at boosting research activities will have a long-term impact on research intensity.pre-print297 K

Impact of Economic Globalization on Human Capital: Evidence from Nigerian Economy

Investment in human capital in relation to global world is to achieve an optimum return in terms of a gainful employment, productivity and high standard of living. This paper uses autoregressive distributed lag model to determine the cointegration, long run and short run elasticities among human capital, economic growth, economic globalization and foreign direct investment (FDI), for the period 1980-2011. The empirical results reveal that there is a long run relationship among the variables tested in this study. Also, economic growth and FDI show a positive impact on human capital and economic globalization indicates a negative impact on human capital in Nigeria

THE IMPACT OF MACROECONOMIC VARIABLES ON ISLAMIC BANKS FINANCING IN MALAYSIA

The study investigates the impact of conventional bank interest rate on the volume of financing of Islamic banks in Malaysia for the period spanning 2006:12 to 2011:3. Omitted variable bias is provided for, by including several control variables such as production index, real effective exchange rate, price index and stock market index as additional explanatory variables. The relationship among the variables is examined with the ARDL approach to cointegration. Findings suggest the existence of one long run relationship among the variables. Furthermore, the study shows that interest rate significantly affects Islamic banks financing Malaysia. This is taken to mean that Islamic banks financing is complementary rather than substitute to conventional banks financing. Hence, it is recommended that Islamic banks in Malaysia should accommodate more profit and loss products in order to be more interest-free. Keywords: Islamic banks financing, ARDL, Granger causality test

Does Financial Development Reduce CO2 Emissions in Malaysian Economy? A Time Series Analysis

This study deals with the question whether financial development reduces CO2 emissions or not in case of Malaysia. For this purpose, we apply the bounds testing approach to cointegration for long run relations between the variables. The study uses annual time series data over the period 1971-2008. Ng-Perron stationarity test is applied to test the unit root properties of the series. Our results validate the presence of cointegration between CO2 emissions, financial development, energy consumption and economic growth. The empirical evidence also indicates that financial development reduces CO2 emissions. Energy consumption and economic growth add in CO2 emissions. The Granger causality analysis reveals the feedback hypothesis between financial development and CO2 emissions, energy consumption and CO2 emissions and, between CO2 emissions and economic growth. The present study provides new sights for policy making authorities to use financial sector as an instrument to decline energy emissions

Are Fluctuations in Gas Consumption Per Capita Transitory? Evidence from LM Unit Root Test with Two Structural Breaks

With a view to determine the effectiveness of the policies aimed at boosting the natural gas consumption, this paper examines the unit root properties of natural gas in 44 countries, for the period 1965 to 2010. Applying the LM unit root tests, which allow for a maximum of two structural breaks, we are able to reject the null hypothesis of unit root in the natural gas consumption series of 57% of the countries, under study. The implication of these results is that shocks to natural gas consumption in several countries will produce transitory effects. A key consequence of this finding is that initiatives designed to have permanent positive effects on natural gas, such as construction of large natural gas pipeline network, are to be effective in increasing the share of natural gas consumption in only 43% of the total sample

Is the consumption-income ratio stationary in African countries? Evidence from new time series tests that allow for structural breaks

This paper examines whether the consumption-income ratio is stationary in 50 African countries. We use the residual augmented least squares (RALS-LM) unit root test that allows for structural breaks developed by Meng et al. (2014). The empirical evidence shows that the consumption-income ratio is stationary around structural breaks in most (44 out of 50) African countries. This is consistent with the predictions of most economic theory. The general finding of mean reversion implies that (policy) shocks are likely to have only temporary effects on the consumption-income ratio in most African countries

Economic freedom index and stock returns in Malaysia

The objective of this study is to investigate the relationship between economic freedom index and stock return in the Kuala Lumpur Stock Exchange, Malaysia for the period, 1995 to 2013. The analysis is conducted within the framework of Capital Asset Pricing Model (CAPM), while using the pooled ordinary least square as the method of estimation. The findings show that economic freedom index does not have significant impact on stock returns in the long run. However, overall economic freedom index has significant impact on stock returns in the short run. We further consider the impact of five components of economic freedom index. It is observed that the components do not have significant long run impact on stock returns. The components-limited government and open markets- have strong short run significant explaining powers. The results are consistent across different levels of inflation and wealth in Malaysia. The results indicate that investors can obtain better mean-variance efficiency when a country exhibit greater economic freedom. This paper should be of interest to both investors and market researchers

An investigation of long range reliance on shale oil and shale gas production in the U.S. market.

Despite the rising profiles of both shale oil and shale gas plays in the U.S. and the importance of testing for their persistence, no study has examined the persistence of the availability of shale oil and shale gas plays in the country. This paper focuses on the analysis of shale oil and shale gas production using long range dependence techniques in the U.S. for the period, January 2000 to April 2019. The empirical findings illustrate that the series examined are highly persistent, finding very little evidence of mean reverting patterns. Among the implications of the results, which are discussed in the paper, is that there is a hysteresis in shale oil and gas production in U.S., and therefore shocks resulting from new government policies relating to shale oil and gas in U.S. will have lasting impacts on their production. Besides, it will not be feasible to use forecasting as a basic instrument for unconventional energy sources as the previous values of shale oil and gas production cannot be utilised to accurately forecast their subsequent values.pre-print606 K