A number of research papers analyzed the factors that may have impacts on the balance of trade for the effective macroeconomic policies but the results of these studies have created ambiguity which implies that further research is needed as the worsening trade balance can limit the economic growth of any country. Hence the current paper is an effort to study the short-run and long-run relationships among trade balance, real effective exchange rate, GDP per capita, urbanization, unemployment and inflation rate for the Finnish economy. Autoregressive Distributed Lag (ARDL) bound testing methodology to co-integration along with error correction mechanism is applied by using time series data from 1990 to 2019 for checking the existence of long-run equilibrium between explained variable and its various determinants. Empirical findings of ARDL show that the long-run relationship among the factors of the estimated model holds. The results indicate that real effective exchange rate, urbanization and inflation are having a significant but negative impact on Finland’s trade balance for both the short-run and long-run while the impacts of GDP per capita and unemployment are significant and positive on the Finish balance of trade. In addition to above, the structural stability of mean and variance of the error term for the estimated ARDL model is verified with the help of CUSUM and CUSUM square graphs. Therefore, a reliable policy measure to improve the balance of trade by encouraging the domestic production and curtailing the imports is suggested in Finland.
Environmental degradation as a consequence of modern technological change is still an unresolved global issue. As countries grow, the cost of this progress has to be born in the form of a rise in carbon emissions. In Pakistan, energy consumption has increased from 34 Million MTOE in 1992 to 98 MTOE in 2019 due to oil and gas-based production. Likewise, the average temperature has risen during the last 50 years in Pakistan. Based on IPAT and Climate change models, this study estimates the two equations model to analyze the impact of economic growth, foreign direct investment, population density and population in urban agglomeration on carbon emissions by using ARDL bound testing methodology. The co-integration relationship was found in both stages with consistency. This study proved the Environmental Kuznets curve (EKC) theory in the case of Pakistan. The more insightful finding is that the large bulge area of the curve between carbon emissions and economic growth highlights that the negative impact of today’s economic growth on the environment will remain for a much longer period in the future. It is also found that carbon emissions are responsible for increasing average temperature resulting in a climatic change in Pakistan. These empirical results indicate that there is a dire need to revisit the growth strategy to achieve sustained economic growth.
The neoclassical theory illustrates that the capital will flow from the capital-rich economies towards the capital-poor states. However, it is generally observed that the capital does not move from high-income to low-income economies. This contradictory behavior of global capital flows is called the Lucas paradox. According to Alfaro, Kalemli-Ozcan, & Volosovych (AKV) model, the Lucas paradox can be entirely explained by the institutional quality. In the light of AKV notion, this paper examines the role of institutional quality in explaining the Lucas paradox. The empirical analysis involves 17 major emerging economies of the world by using panel data for the period 1999-2018. The GMM estimation reveals that the Lucas paradox is explained by the institutional quality in case of FDI flows only. However, institutional quality indicators generally remain unable to explain the paradox in case of portfolio equity capital flows. Moreover, financial development is found to be a significant determinant of portfolio equity flows in the emerging markets. Finally, we suggest that the financial flows to the emerging markets are sensitive to the nature of the capital flows.
Water is the precious blessing of Allah Almighty which is found everywhere in the world. Hence, its usefulness is neglected, and it is wasted unreasonably. Due to its excessive use and human activities, the water sources are becoming polluted too. The rivers, streams and watercourses are too polluted for human use. This situation created water scarcity in the world. Pakistan is also facing acute water deficiency and it will soon become a water stress country from water scarcity state. It demands appropriate measures to treat water as a precious wealth and to use it carefully so that coming generations will not have to face the music. One of those measures is to clean the wastewater so that water scarcity could be eliminated. This paper examines the wastewater treatment in Islamic perspective. In this research, the viewpoints of four Imams regarding water purification have been elaborated and suggestion have been enlightened in brief.
There are two types of banking systems functioning in Pakistan. They include conventional and Islamic banking systems. Individuals take decisions to invest in a particular banking system while considering socioeconomic, religious and psychological factors. The present study is designed to examine factors affecting individual's investment decision in Islamic banking. The study uses cross-sectional data collected from Vehari district of the Punjab province. A total of 150 respondents were selected randomly having accounts or availing any other type of banking facility from conventional and Islamic banking. We used a 5 point Likert scale for getting information on customer satisfaction. The study considers social, religious and psychological factors having influence on individual's investment decision. Logit model was employed to determine factors affecting the decision of individuals in making investment in a specific banking system. The study provides insights on factors inducing individuals to make investment in a particular type of banking system. Age and education of respondents, whether banking is according to Islamic principles, ethical responsibility, wide range of Islamic products and networks are statistically related factors affecting decision on making investment in Islamic or conventional banks. Results of the study are useful for concerned banks to attract individuals to purchase the products. IntroductionBanking sector is considered an integral part of the economic growth of any country. Banks provide a wide range of services to customers. People make investment in banks' products in order to maximize profit. Choice of investing in a bank depends on different factors. They include social, economic, religious and psychological factors, in addition to bank's working environment. Eastlick (1996) shows that people go through a decision making process consisting of problem recognition, information search, 19
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