Financial Inclusion and Banks Performance: An Empirical Study of 10 West African Countries Using Panel Cointegration FMOLS Regression Methodology

The paper assesses the effect of financial inclusion on banks performance in West African countries. To be able to assess the long run effect of financial inclusion on banks performance, the study employed panel cointegration methodology thus fully modified ordinary least square model to estimate the long run impact on banks performance. The study concluded that financial inclusion has positive effect on banks performance with an enticing results showing that financial inclusion increases banks performance in low gdp per capita countries which signals that banks should increase their presence and provide services to those countries. The study recommends the utilization of multi-factors of financial inclusion measure to ensure precise and appropriate way to measure multilateral financial inclusion level. Keywords: Financial inclusion, Banks performance, Fully modified ordinary least square, West Africa DOI: 10.7176/EJBM/11-21-05 Publication date:July 31st 201

The Impact of Personal Remittances, FDI and Exports on Economic Growth: Evidence from West Africa

The study delves into West African data to assess the impact of personal remittances, FDI and exports on economic growth by applying panel data methodologies on 15 countries from 1991 to 2017. The study further applied panel fully modified ordinary least square, robust least square, and generalized linear model regression methodologies to make a statistical inference. From the results, it could be ascertained that personal remittances and exports have a strong and positive impact on economic growth. Meanwhile, FDI has a positive impact on economic growth as an individual factor, but with the existence of personal remittances and exports, FDI tends to become negative and significant in West Africa. The study proposes further studies into the area of FDI to unravel the exact relationship it has with economic growth. Keywords: Personal remittances, Foreign direct investment, Exports, Robust least squares, Fully modified ordinary least squares, Generalized linear model DOI: 10.7176/EJBM/11-23-04 Publication date: August 31st 201

The macroeconomic impact of global and country-specific climate risk

This paper examines the impact of climate risk on macroeconomic activity for thirty countries using over a century of panel time series data. The key innovation of our paper is to use a factor stochastic volatility approach to decompose climate change into global and country-specific climate risk and to consider their distinct impact upon macroeconomic activity. To allow for country heterogeneity, we also differentiate the impact of climate risk upon advanced and emerging economies. While the existing literature has focused on country based climate risk shocks, our results suggest idiosyncratic or country-specific climate risk shocks are relatively unimportant. Global climate risk, on the other hand, has a negative and relatively more important impact on macroeconomic activity. In particular, we find that both advanced and emerging countries are adversely impacted by global climate risk shocks

Uncertainty measures and business cycles : evidence from the US

Most of the macro-literature on uncertainty has focused on macro-uncertainty caused by real activity as a source of economic fluctuations. Economic uncertainty reduces total demand in the economy via a conventional channel that is associated with real option theory. Given the findings of the existing literature, financial uncertainty other than macroeconomic uncertainty matters more for business cycle fluctuations. This study seeks to answer the following questions: Is uncertainty the primary cause of the business cycle’s fluctuations? Alternatively, does it matter what kind of uncertainty exists? The research utilized the generalized linear model (GLM) and the Bayesian generalized linear model (BGLM) to analyze a dataset covering the time from July 1960 to April 2015 in the United States. Elevated levels of macroeconomic uncertainty, akin to real uncertainty, and economic policy uncertainty, as measured by news sources, demonstrate a counter-cyclical pattern in relation to business cycles. Low levels of uncertainty have a positive impact on business cycles, leading to an increase in industrial production. Conversely, high levels of uncertainty have a negative effect on business cycles, causing a decline in industrial output. We are of the opinion that high levels of macroeconomic uncertainty have a ripple effect on the entire economy, which may stifle investments, reduce consumption, and create unemployment, which is likely to influence labor participation

Economic freedom, inclusive growth, and financial development : a heterogeneous panel analysis of developing countries

The effective and efficient management of financial systems and resources fosters a socioeconomic climate conducive to technological and innovative advancement, thereby fostering long-term economic growth. The study used panel data from 72 countries classified as less financially developed between 2009 and 2017 to examine the role of economic freedom and inclusive growth in financial development. For the long-run estimations, we utilised the linear dynamic panel GMM-IV estimator, panel corrected standard errors (PCSE) linear regression method, and contemporaneous correlation estimator, a generalised least squares method. Our analyses indicate that economic liberty, inclusive growth, and capital stock significantly contribute to financial development in a positive manner. Moreover, inclusive growth contributes positively to overall financial development by enhancing economic freedom. Regardless of exogenous and endogenous shocks, we found that the tax burden and investment freedom are negative drivers of financial development as measured by the overall financial development index. In contrast, protection of property rights, government spending, monetary freedom, and financial freedom are positive and significant drivers of economic growth

Poverty alleviation in developing and underdeveloped countries. Do foreign capital and economic freedom matter?

Our study focuses on the role of foreign capital which includes foreign direct investment, foreign aid, and economic freedom in poverty alleviation in developing and underdeveloped countries by using panel data from 1995 to 2018 for 71 countries. In the pursuit of achieving our objective, we employed several econometric techniques such as dynamic ordinary least square, fully modified ordinary least square, dynamic fixed effect, and pooled mean group regression methods. Furthermore, we performed the Granger causality test, impulse response function, and variance decomposition analysis. In our long-run estimations, we found that foreign direct investment could significantly alleviate poverty but increases poverty in the short run. Instead, foreign aid plays no significant role in poverty alleviation. Moreover, economic growth and economic freedom are essential as our findings consistently exhibited that they play a crucial role in poverty alleviation. We also found bidirectional causality between poverty alleviation and population growth, while a unidirectional causal linkage was found from poverty alleviation to foreign aid. We conclude that policymakers should look at a new paradigm of developmental assistance, and governments should also create an aiding environment for foreign investment to support their growth plan. First published online 13 December 202

Exploring the heterogeneous influence of social media usage on human development : the role of carbon emissions and institutional quality

Social media has grown in importance as a means of social connection and provides a significant avenue for learning about sustainability and related issues. This study aimed to reveal the long-run heterogeneous relationship between social media usage, institutional quality, carbon emissions and human development. We employ second generation techniques, namely augmented mean group (AMG) and common correlated effects mean group (CCEMG) estimators to ensure that cross-sectional dependence and heterogeneity are captured. In addition, the system generalized method of moments (GMM) dynamic panel data estimator was used to deal with the issue of endogeneity and serial correlation. The analyses were categorized into three: all sample groups, advanced economies, and transition and developing economies. Our findings show that there is a positive relationship between social media usage, institutional quality, carbon emission and human development. However, social media usage in transition and developing economies is more pronounced than in advanced economies and likewise for institutional quality. With regard to carbon emissions, the impacts are symmetric. Overall, the interaction between social media and carbon emissions adversely affects human development, while the interaction between social media and institutional quality proportionally lead to human development. Most importantly, the impact of social media on human development is not economically beneficial and may be more promising in transition and developing countries

Impact of economic policy uncertainty, energy intensity, technological innovation and R&D on CO2 emissions:evidence from a panel of 18 developed economies

This study examines the impact of economic policy uncertainty (EPU) and ecological innovation on carbon (CO2) emissions in a panel of 18 developed countries from 2005 to 2018 using second-generation time-series panel data techniques. We use three robust long-run estimators, namely two-stage least squares (2SLS), panel generalised method of moments (GMM) and generalised least squares (GLS), to resolve heterogeneity, endogeneity and simultaneity in the panels. We further performed causality tests to ascertain the direction of causality between the variables. Our estimations suggest three innovative findings. First, economic growth contributes significantly and positively to CO2 emissions; however, this happens at an optimal level of growth after which carbon emission reduces, indicating that our sample exhibits an inverted U-shaped environmental Kuznets curve (EKC) relationship. Second, the impact of EPU on CO2 emissions is diverse: high levels of EPU have a significant influence on CO2 emissions only in high-polluting countries but not in low-polluting ones. Thirdly, research and development (R&D), foreign direct investment (FDI), urbanisation and renewable energy (RE) usage were also found to have varying effects on CO2 emissions. These findings highlight the heterogeneous relationship between carbon emissions and economic indicators even in advanced economies, as the pollution haven hypothesis (PHH) holds true in high-pollution countries while the pollution halo effect holds for low-pollution ones. A key policy implication of this work is that the quest to mitigate emissions should not be a one-size-fits-all approach because not every country’s urbanisation rate, FDI inflows, R&D and renewable energy consumption directly affect CO2 emissions in the face of economic policy uncertainties

Uncertainty Measures and Business Cycles: Evidence From the US

Most of the macro-literature on uncertainty has focused on macro-uncertainty caused by real activity as a source of economic fluctuations. Economic uncertainty reduces total demand in the economy via a conventional channel that is associated with real option theory. Given the findings of the existing literature, financial uncertainty other than macroeconomic uncertainty matters more for business cycle fluctuations. This study seeks to answer the following questions: Is uncertainty the primary cause of the business cycle’s fluctuations? Alternatively, does it matter what kind of uncertainty exists? The research utilized the generalized linear model (GLM) and the Bayesian generalized linear model (BGLM) to analyze a dataset covering the time from July 1960 to April 2015 in the United States. Elevated levels of macroeconomic uncertainty, akin to real uncertainty, and economic policy uncertainty, as measured by news sources, demonstrate a counter-cyclical pattern in relation to business cycles. Low levels of uncertainty have a positive impact on business cycles, leading to an increase in industrial production. Conversely, high levels of uncertainty have a negative effect on business cycles, causing a decline in industrial output. We are of the opinion that high levels of macroeconomic uncertainty have a ripple effect on the entire economy, which may stifle investments, reduce consumption, and create unemployment, which is likely to influence labor participation. JEL Classification : D81, E23, E32, E44, G14