The paper investigates the asymmetric effects of oil price shocks on real economic activities in ASEAN-5 from 1991 to 2014 using an unrestricted panel Vector Auto Regressive (VAR) method. Results from the impulse response function (IRFs) show evidence of an asymmetric relationship between oil prices and economic activities. Specifically, positive oil price shock measures negatively affect output growth both in the short term and in the long term. For oil price decrease specifications, real output responds negatively in the short term before recovering to its pre-shock level in the long term. The variance decomposition analysis (VDCs) also exhibit differences between the effects of positive and negative oil price shocks on economic activities, supporting the evidence of asymmetric relationship obtain in the IRFs simulations.
This paper employs PCSE, OLS and TSLS with random effects to investigate the impact of the political instabilityincome interaction on savings in ECOWAS countries during the period 1996-2012. The empirical evidence illustrates that higher political stability is associated with higher savings and income levels moderate the adverse effect of political instability on savings, indicating that the impact of political instability on savings is higher in low income ECOWAS countries, but lesser at higher levels of income. The paper recommends the promotion of political stability via increases in incomes to raise savings in the ECOWAS region.
Despite the abundant research on economic development, corruption and political instability, little research has attempted to examine whether there is a causal relationship among them. This paper examines the causal relationship among corruption, political instability and economic development in the ECOWAS using the Granger causality test within a multivariate cointegration and error-correction framework for the 1996-2012 period. The findings indicate that political instability Granger-causes economic development in the short term, while political instability and economic development Granger-cause corruption in the long term. In addition, we employed the forecast error variance decomposition and impulse response function analyses to investigate the dynamic interaction between the variables. The results demonstrate positive unidirectional Granger causality from political instability to economic development in the short term and positive unidirectional Granger causality from political instability and economic development to corruption in the long term in ECOWAS countries. Thus, ECOWAS governments should employ policies to promote political stability in the region.
The determinants technical efficiency among smallholder cocoa farmers has been well studied in agricultural literature. Among the factors identified are the demographic characteristics that affect farmers' decision-making process and the ability of farmers to execute the decision effectively. In Malaysia, cocoa production is characterized by several problems that lead to low productivity. First is the negligence of the agricultural sector by the past administration due to shift in policy favoring manufacturing sector that now accounts for the bulk of foreign exchange earnings. Second is the endemic problem in the cocoa industry. The low productivity has resulted in the continuous fall in percentage share of cocoa output since 2001. Therefore, increasing productivity would increase the percentage share of cocoa production. Accordingly, this study explores the determinants of technical efficiency among cocoa farmers in Malaysia. The study relies upon primary data gathered during the 2013 production season. Data are collected from a set of structured questionnaire administered on 375 smallholder cocoa farmers throughout Malaysia. Results of the analysis show that record keeping, level of knowledge and status of farmers (either part-time or full-time) affects efficiency. This finding suggests that policies that would directly affect these identified variables should be pursued.
This paper explores the impact of the COVID-19 pandemic on the connectedness of stock indexes in the group of developed and emerging economies known as the ASEAN+3. We derived our empirical findings from the Diebold and Yilmaz (DY12) and Baruník and Křehlík (BK18) spillover methods, using daily data from 10 May 2005 to 24 February 2021. We show that the COVID-19 pandemic has had a bigger impact on the return and volatilities of ASEAN+3 stock markets than previous economic turmoil, such as the 2008 global financial crisis and the 2009–2012 European debt crisis. Using a frequency domain methodology, we find evidence that return spillovers mostly occur in the short-term, while volatility connectedness is more pronounced in the long-term. The Singapore stock market primarily acts the as top transmitter in returns and volatilities, whereas Vietnam has become the top receiver of shocks in returns. We also demonstrate that it is possible to replicate the frequency-domain connectedness measures of BK18 with a DY12 methodology. Using a series decomposed with a wavelet-based approach, we find that the total spillover indices for short-, medium-, and long-term frequencies computed with the DY12 approach are comparable to the within connectedness indices of BK18. Our results have important policy implications for investors, regulators, and policy makers.
This paper investigates bilateral trade flows and the level of openness across ECOW-AS-15 nations for the period of 1981-2013 using Poisson pseudo maximum likelihood (PPML), fully modified ordinary least squares (FMOLS) and canonical cointegrating regression (CCR). Comparing the results, the ECOWAS dummy variable was negative and significant in all of the estimation techniques. Financial openness under FMOLS and CCR was negatively significant. Trade openness was found to be negatively significant only under PPML. The empirical results indicate that a common border and distance have had a strong effect on ECOWAS trade; also there is a negative effect of trade flow among ECOWAS members. Moreover, the level of financial and trade openness among members impedes the level of trade flows on integration. The estimated results highlight the underlying significance of accurately accounting for endogeneity when estimating trade policy impacts.
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