Towards unlocking sustainable land consumption in sub-Saharan Africa : Analysing spatio-temporal variation of built-up land footprint and its determinants

A systematic understanding of the dynamics of land consumption is extremely important for human well-being and especially vital for the ecological balance of the sub-Saharan Africa (SSA) region. Remarkable land use/land cover changes due to climate change, urbanization, and food demand have affected the spatio-temporal dynamics of built-up land footprints (BLFs) in SSA. By using spatial econometric techniques, this study investigates the spatio-temporal evolution and key drivers of built-up land footprints in 28 SSA countries from 2000 to 2017. Our results show how an appropriate consideration of the role of spatial effects can shed new insights into the convergence process of built-up land footprints. Foremost, the study reveals significant evidence of both absolute and conditional convergence in BLFs over the experimental period. Additionally, the estimation indicates that biocapacity plays an important role in cutting built-up land footprints in SSA countries as there was a faster conditional convergence in countries with higher biocapacity. Moreover, the study outlined that the promotion of globalization and urbanization draws more pressure on the built-up environment and makes it challenging to reduce BLFs in SSA. In addition, this study found evidence for an inverted U-shaped nexus between per capita built-up land footprints and per capita gross domestic product (GDP), supporting the prediction of the environmental Kuznets curve (EKC) hypothesis.© 2022 The Author(s). Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).fi=vertaisarvioitu|en=peerReviewed

The quantile dependence of the stock returns of “clean” and “dirty” firms on oil demand and supply shocks

© 2021 Elsevier B.V.The paper examines the degree to which firms' stock returns in the energy and technology sectors depend on oil demand and supply shocks by accounting for quantile dependence in shock transmission and causal linkages. Using monthly time-series data from January 2004 to December 2017, our evidence shows that the substitution between oil and clean commodities occurs only in the long-run when the oil market is subject to demand-driven shocks. Unlike oil demand shocks, we demonstrate that oil supply shocks display a relatively lower predictive power for the clean energy stock returns. We also report that firms in the dirty energy sectors display lower returns mainly due to their exposure to exogenous oil shocks, while firms in clean energy and technology sectors are more resilient to demand shocks as their exhibit positive returns in the long-run. Our findings provide evidence and guidance about investments opportunities in clean assets

OIL PRICE DYNAMICS AND FINANCIAL DEVELOPMENT: DOES DEMOCRACY MATTER? EVIDENCE FROM A PANEL SMOOTH TRANSITION REGRESSION MODEL

This paper studies the relationship between oil price and financial development and investigateswhether the oil price-financial development nexus varies across countries according to the level ofdemocracy. We contribute to the literature by (i) employing a factor model methodology to address concernsrelated to unobservable common shocks, endogeneity and heterogeneity in the estimation of the oil pricefinancial development nexus. (ii) relying upon the estimation of panel smooth transition regression models toestimate the role of democracy in the oil price-financial development nexus. Using data of 14 oil exportingcountries over the 1984-2016 period, there is evidence of an oil curse in the financial development, whichfurther matches the theoretical predictions of the oil curse paradox. Whilst oil price fluctuations negativelyaffect financial development outcomes, this effect is nonlinearly related to the degree of democraticaccountability. Specifically, we provide new evidence in favor of the financial resource curse at lower levelsof democratic accountability, while better governance and democratic accountability neutralize the curse inthe financial sector. Moreover, our results are robust to several measure of financial developments. Wesuggest that democratic accountability has the necessary institutional infrastructure to consolidate a moreresilient and inclusive financial sector in emerging/developing oil exporting countries, which is fundamentalto avoid the allegedly harmful effects of oil price fluctuations.</p

Cyclical drivers of fiscal policy in sub-Saharan Africa: New insights from the time-varying heterogeneity approach

© 2021 Economic Society of Australia, QueenslandWe extend the topical literature on the cyclical behavior of fiscal policy in developing countries subject to terms of trade cycles by applying the interactive fixed effects model that allow for unobserved time-varying heterogeneity in the impact of fundamentals. Based on a sample of 20 sub-Saharan African (SSA) countries from 1985 to 2017, our results support existing evidence about developing countries that fiscal policy is pro-cyclical in SSA countries. Whereas this pro-cyclicality is valid for government spending and fiscal balance, government revenue is slightly counter-cyclical. We also find that the pro-cyclicality of government expenditure and fiscal balance escalates during episodes of terms of trade booms. Our results make a strong case for the support of the pivotal role of Sovereign Wealth Funds, access to international financial markets, and flexible exchange rate regimes in reversing the pro-cyclical behavior of fiscal policy

Commodity terms of trade shocks and real effective exchange rate dynamics in Africa's commodity-exporting countries

Motivated by the absence of conclusive guidance from the current literature, this study revisits the effects of terms of trade shocks on real effective exchange rates (RER) across twenty-three primary commodity-exporting countries in Africa. To address the heterogeneity across primary commodities that may have plagued earlier studies, we employed a nonlinear panel ARDL approach to capture both the cross-section and time variations across primary commodities. Our analysis offers three main finding patterns. Firstly, we highlighted that the response of the RER to terms of trade shocks is asymmetric: the real appreciation is more pronounced for positive than negative shocks in terms of trade in the long-run while negative shocks in terms of trade cause the RER to depreciate in the short-run. Secondly, we found that the asymmetric responses of RER differ across commodity subgroups and seem to matter more for energy-exporting countries. Finally, we showed that energy and metal commodity-exporting subgroups are the most subject to real appreciation in the long run in comparison to countries exporting soft commodities such as agricultural and, food and beverage commodities. A fundamental policy corollary follows that there is a need to remediate the loss of the external competitiveness associated with real appreciation by coordinating monetary and fiscal policies to effectively absorb the huge additional foreign reserves and ensure an exchange rate equilibrium level, which will bring macroeconomic stability in primary commodity-exporting countries

Is the environmental Kuznets Curve in Europe related to the per-capita ecological footprint or CO2 emissions?

The nexus between environment-economic development has been investigated for a long time. Many empirical studies have measured environmental degradation by CO2 emissions and ignored the possibility that the use of such metric as environmental degradation indicator may be invalid in some cases when it comes to resource stocks. This paper focuses on two indicators of environmental degradation including ecological footprint (EF) and CO2 emissions as target variables to provide new insights into the ongoing discussions of whether the environmental Kuznets Curve (EKC) hypothesis is related to the indicators of environmental pressure used. Estimating a heterogeneous panel model with data on 14 European countries over the period 1990-2014, we provide evidence for the sensitivity of the EKC hypothesis to the type of environmental degradation proxy used. Furthermore, we provide new insights regarding the relevance of EF as an appropriate environmental tool that fits the EKC prediction in contrast to CO2 emissions. Regarding the explanatory variables, the results show that renewable energy is an environmentally friendly source while fossil fuels contribute to environmental degradation. The inclusion of renewable energy and fossil fuel does not alter the behavior of economic growth in all environmental degradation indicators. The empirical results demonstrate the need to implement environmental management policies that encourage the production/supply of renewable energy and to reduce reliance on fossil fuel consumption. This paper is expected to provide policy makers with a set of policy proposals to achieve sustainable environmental and economic development

Threshold cointegration, nonlinearity, and frequency domain causality relationship between stock price and Turkish Lira

Modelling complex asymmetric effects and non-linear relationships between exchange rate and stock prices has challenged classical econometric methods. This study contributes to the relative literature in the following distinct ways. First, we follow a variety of econometric approaches in order to characterize the complex dynamic co-movements between Turkish stock market and exchange rate from January 2003 to December 2018. Secondly, we show that the evidence for asymmetric threshold cointegration in Turkey's financial market can be hidden by following linear time series methodologies. Thirdly, it is also worth noting that the real effective exchange rate, USD-Turkish lira exchange rates, money supply and interest rates have large predictive power for stock price fluctuations at various frequencies. Building on these insights, we claim that asymmetry (nonlinearity) is particularly important in Turkey's financial market because it shows the need for a new pattern of policy measures to prevent financial market crisis risk in Turkey