Capital Flows and Economic Growth: What Roles Does Trade Liberialisation Play?

Adegboyega, Soliu Bidemi; Akinbobola, T. O.; Ajayi, Felix

doi:10.36997/ijuev2021.65.1.26

Cited by 3 publications

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“…The OLS model and Grange causality test were used to get the results. Capital and labor have a favorable effect on Nigaria’s economic growth (Adegboyega et al, 2017). Between 2001 and 2017, labor and capital had a positive effect on the productivity of the Netherlands (Bun & Winter, 2022).…”

Section: Discussionmentioning

confidence: 99%

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How Terms of Trade Impact Economic Growth: The Case of the United States

Shahzad

Muhammad

2023

SAGE Open

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Trade has a crucial role in a country’s economic development. This study scrutinizes the impact of terms of trade (TOT), labor force, and capital on the United States’ economic growth. This study aims to investigate the short and long-run impacts of Capital, Labor, and Terms of Trade on the economic growth of the United States. To accomplish the study’s goals, this study analyzed a time series of annual data for the United States from 1980 to 2021. The Philipps-Perron test, the model of Augmented Dickey-Fuller (ADF) model, and the Autoregressive Distributed lag (ARDL) of the bound tests were applied to test whether the data is stationary or not. We employed an Autoregressive Distributed lag (ARDL) unit root model to examine the study variables’ short- and long-term associations. The outcomes of the unit root of the (ADF) test explain that both the Trace and Maximum Eigenvalues values showed that the study’s variables were stationary at both level and first difference, but stationarity was not there at the first difference using the PP model. At I(0) and I(1), the log(GDP), labor, capital, and log(TOT) stayed stationary. However, the estimated results of the (ARDL) model revealed that the economic growth of the United States was negatively and significantly affected by the (TOT), but economic growth, capital, and the labor force have favorable long and short-run relationships. The results of ECM(-1) imply that 7% of adjustment from disequilibrium to equilibrium from short-run to long-run. This study’s findings suggest that policymakers and governments ease trade between countries to achieve the highest economic growth.

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Section: Discussionmentioning

confidence: 99%

“…There has a positive relationship between (Trade & Human capital) and GDP. (Oliveira, 2011) trade capital positively impacts South America’s economic growth (Adegboyega et al, 2017). Capital and Labor positively impact Nigeria’s economic growth (Bun & Winter, 2022).…”

Section: Introductionmentioning

confidence: 99%

How Terms of Trade Impact Economic Growth: The Case of the United States

Shahzad

Muhammad

2023

SAGE Open

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“…Furthermore, the use of the ARDL approach has the merit that can adjust for any endogeneity problem among the regressand variables (Wolde-Rufael, 2010). In addition, this method allows scholars to use the correct dynamic framework, such that inferences on long-run estimates are made possible but not in other co-integration approaches (Adegboyega et. al., 2021).…”

Section: Model Specificationmentioning

confidence: 99%

“…The error terms 𝜀 𝑡 are independently dispersed across time and units. Hence, for a countryspecific analysis, the consistent issues related to data comparability, measurement error, and consistency would not arise given all information(Adegboyega et. al., 2021).…”

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confidence: 99%

Modelling the nexus between income inequality and shadow economy in Nigeria

Adegboyega

Odusanya

Ogede

et al. 2022

JED

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Purpose -This paper aims to examine the relationship between the shadow economy and income inequality in Nigeria.Method -The paper employed Autoregressive Distributed Lag (ARDL), Fully Modified Ordinary Least Square (FMOLS), and Granger causality. This methodology is used to avoid endogeneity and heterogeneity in the model. This paper gauged income inequality using two diverse indicators of the Gini coefficient: the Gini index in proportion to household disposable income and the Gini index in proportion to household market income. In accordance with the literature, our empirical analysis draws on data from the Standardized World Income Inequality Database (SWIID), the World Bank, World Development Indicators, and the International Country Risk Guide (ICRG) for Nigeria from 1991 to 2018.Result -The findings of ARDL and FMOLS suggested a positive relationship between income inequality and the shadow economy, based on both measures of income inequality. In the short term, however, the shadow economy and income inequality are negatively correlated. Furthermore, we discovered a one-way causal relationship exists in Nigeria between the shadow economy, household disposable income, institutional democracy, household market income, and corruption control (CCI). Recommendation -Shadow economy has been regarded as an avenue to create job opportunities and raise poverty-income levels. It is critical that, for the shadow economy to reduce income inequality in Nigeria, policymakers should develop much better policies aimed at addressing income inequality.Contribution -In order to understand the relationship between income inequality and shadow economy activities in Nigeria, this study employed three methodologies, namely: Autoregressive Distributed Lags (ARDL), Fully Modified Ordinary Least Squares (FMOLS), and Granger Causality. The result offers reliable recommendations for pro-poor interventions that aim to limit the growth of informality via redistributing incomes.

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“…Particularly because the ARDL approach has the same benefit of being able to account for any endogeneity issues among the regressand variables, this FMOLS was chosen above the other strategies (Wolde-Rufael, 2010, Ogede & Tiamiyu, 2022). Additionally, enables researchers to apply a proper dynamic framework, making it possible to draw conclusions about long-run estimations, which is not achievable with other co-integration methodologies (Adegboyega et. al., 2021).…”

Section: The Model and Econometric Strategymentioning

confidence: 99%

Disaggregated Trade Openness on Shadow Economy in Nigeria: Does Institutional Quality Matter?

Adegboyega

Ogede

Odusanya

et al. 2022

JEBA

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Introduction: It is likely that enterprises and entrepreneurs will be encouraged to engage in the formal sector as economies integrate more fully into the global economy. Thus, we begin our investigation by looking at the relationship between Nigeria's shadow economy and disaggregated trade openness. Based on Nigeria's inadequate institutional quality, our second purpose is to conduct further research on the role institutional quality plays in moderating the relationship between its shadow economy and disaggregated trade openness between 1991 and 2018. Methods: The fully modified ordinary least squares (FMOLS) and Granger causality methods are used in this paper to investigate the nexus and causal effect in time-series analysis. Results: The coefficients of institutional quality, import-to-GDP ratio, government expenditure, and financial development all have an adverse impact on Nigeria's shadow economy. The inflation proxy with the consumer price index, economic growth, and the export-to-GDP ratio all improve Nigeria's shadow economy. The findings of interaction between the import-export ratio and the quality of institutions positively affect the Nigerian shadow economy. The pairwise Granger causality exercise comes after the regression analysis. Conclusion and suggestion: The study concludes that the size of Nigeria's shadow economy is influenced by institutional quality, import trade, government expenditures, and financial development. Similarly, we find no causal relationship between disaggregated trade openness in Nigeria and institutional quality. As a result, policymakers and the country's government must act quickly and decisively to reduce the impact of informal activities on the country's economy.

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Capital Flows and Economic Growth: What Roles Does Trade Liberialisation Play?

Cited by 3 publications

References 0 publications

How Terms of Trade Impact Economic Growth: The Case of the United States

How Terms of Trade Impact Economic Growth: The Case of the United States

Modelling the nexus between income inequality and shadow economy in Nigeria

Disaggregated Trade Openness on Shadow Economy in Nigeria: Does Institutional Quality Matter?

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