This paper investigates the effect of banking sector development on economic growth in a panel of 87 countries, paying particular attention to the role of institutions in reducing the finance curse phenomenon. The dynamic generalized method-of-moments (GMM) results indicate that institutions play an important role in mediating the positive relationship between banking sector development and growth. This suggests that the marginal impact of financial development on growth depends on institutional quality. Using the four-way partition of institutions classified by Rodrik (2005), we also find that resilient market-regulating, marketstabilizing, and market-creating institutions act as mediators to the financial market in facilitating growth. The results are robust to using alternative institutions indicators, estimation strategies, and stopping the sample before the 2007-2008 global financial crisis.

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In this paper, the linear and nonlinear effects of oil price on growth for Association of Southeast Asian Nations (ASEAN)—3 net oil-exporting countries, namely Brunei, Malaysia and Vietnam, are investigated. The empirical analysis applies the augmented autoregressive distributed lag model (ARDL) bound test approach and the nonlinear autoregressive distributed lag model (NARDL) methodology over the period of 1979 to 2017. Evidence suggests that ignoring nonlinearities may lead to misleading results. Specifically, results reveal that the effect of oil price is asymmetric for the case of Brunei, while the effect oil price is deemed insignificant for the case of Malaysia and Vietnam, both linear and nonlinear model. Brunei’s high dependency on oil revenue makes it susceptible to negative oil price shock. This suggests that oil price still plays a significant role as the main driver of economic progress for Brunei.

Rapid increases in energy consumption and economic growth over the past three decades are considered the driving force behind rising environmental degradation, which remain a threat to people and healthy environment. This study investigates the impact of energy consumption on environmental quality in the MINT countries using a panel PMG/ARDL modelling technique, and the Granger causality test spanning from 1971 to 2017. The empirical results confirm the existence of long-run nexus among the variables employed. The results also reveal that economic growth, energy consumption and bio-capacity have a positive and statistically significant effect on environmental degradation during the long run period. We find that a 1% increase in primary energy consumption leads to 0.4172% increase in environmental deterioration in the long-run period, but it is insignificant in the short run. This implies that energy consumption deteriorates environmental quality through a negative effect of ecological footprint. The result also suggests that as MINT countries increase the use of energy to accelerate pace of economic growth, environmental quality would deteriorate through increased ecological footprints. The coefficient of the error correction term (ect) is negative and significant (− 0.2306), suggesting that ecological footprint, a measure of environmental degradation would converge to its long-run equilibrium in the MINT region by 23.06% speed of adjustment every year due to contribution of economic growth, energy consumption, urbanization and biocapacity. The Granger non-causality test results reveal a unidirectional causal relationship from economic growth, energy consumption, and urbanization to ecological footprint and from economic growth to biocapacity. The results further show bi-directional causality between biocapacity and ecological footprint as well as between biocapacity and economic growth. Moreover, urbanization causes economic growth and biocapacity Granger-causes urbanization. Based on these findings, policy implications are adequately discussed.

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