Determinants of Economic Growth: Evidence from Somalia

Ali, Ali Yassin Sheikh; Dalmar, Mohamed Saney; Ali, Ali Abdulkadir

doi:10.5539/ijef.v9n6p200

Cited by 5 publications

(8 citation statements)

References 13 publications

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“…Secondly, both models indicate a statistically significant and positive short-run relationship between current growth and past gross fixed capital formation in Greece. This result is in line with the findings of a vast number of studies focused on this relationship and suggesting a positive link between the variables (e.g., [72]; [73]; [74]. Our findings also confirm the results of [48] for the case of Greece.…”

Section: Discussion Of the Empirical Findingssupporting

confidence: 92%

An empirical study of the relationship between Foreign Direct Investments, Remittances, Political Stability and Economic Growth in Greece

Bantimaroudi¹,

Golitsis²,

Mitreva³

2023

JOE

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This study attempts to shed light on the relationship between FDI, remittances, Gross Fixed Capital Formation, political stability, inflation and economic growth for the case of Greece, using time-series data of annual frequency, covering the period from 1980 to 2018; the end date is the last year before the COVID-19 and the 2022 Russian Invasion of Ukraine which caused a structural break on the data set. After establishing that the investigated variables are stationary in level or in their differences, and once the Johansen test and the residuals based approach to cointegration are employed in capturing the cointegrating relations between them, we proceed with a robust VEC model and an ARDL with cointegration bounds, depending on the level of integration of the time series, to capture both the short-run and the long-run dynamics. The overall findings of both models are jointly analyzed, revealing that according to the ARDL model, FDI and economic growth are positively related in the short-run, but negatively related in the long-run. Moreover, the model indicates a negative short-and long-run relationship between remittances and economic growth, as well as a positive link between political stability and economic growth in Greece, as expected. The negative short-run relationship between remittances and economic growth is further supported by the VECM. Finally, both the VECM and ARDL indicate that GFCF and economic growth are positively related in the short-run, while the ARDL model reveals that this relationship exists in the long-run too.

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Section: Discussion Of the Empirical Findingssupporting

confidence: 92%

An empirical study of the relationship between Foreign Direct Investments, Remittances, Political Stability and Economic Growth in Greece

Bantimaroudi¹,

Golitsis²,

Mitreva³

2023

JOE

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“…Somalia had two public commercial banks before its central government fell in 1991: Somali Savings and Credit Bank and Somali Commercial Bank (Jibril, 2020). In contrast to other Muslim nations, Somalia only has one type of banking system: Islamic banking (Sheikh Ali & Jama, 2016). Over the past two decades, Somalia's Islamic banking industry has experienced significant growth and expansion without the need for government intervention.…”

Section: Introductionmentioning

confidence: 99%

“…Over the past two decades, Somalia's Islamic banking industry has experienced significant growth and expansion without the need for government intervention. Somalia's banking sector has seen a lot of success (Ahmed, 2019;Jibril, 2020;Sheikh Ali & Jama, 2016). Clients have voiced displeasure with the banks as intermediaries, despite the fact that Somalia's Islamic banks have made tremendous success and are essential to the country's economic growth and social well-being (El Taraboulsi-McCarthy & George, 2020;Jibril, 2020;Sheikh Ali & Jama, 2016).…”

Section: Introductionmentioning

confidence: 99%

“…Somalia's banking sector has seen a lot of success (Ahmed, 2019;Jibril, 2020;Sheikh Ali & Jama, 2016). Clients have voiced displeasure with the banks as intermediaries, despite the fact that Somalia's Islamic banks have made tremendous success and are essential to the country's economic growth and social well-being (El Taraboulsi-McCarthy & George, 2020;Jibril, 2020;Sheikh Ali & Jama, 2016). In 2003, Somalia established its first Islamic bank (Warsame, 2016), In Somalian banks, there is no adequate risk management strategy and no deposit insurance.…”

Section: Introductionmentioning

confidence: 99%

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Effective risk management practice in Somalia Islamic banks

Barre

2024

5002

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This paper aims to assess the degree to which Somali banks use effective risk management practices (RMPs). Furthermore, the study has explored the level of risk management practices using the original components of risk management aspects, including understanding risk and risk management, risk assessment and analysis, risk identification, risk monitoring, and credit risk analysis, with the addition of perceived trust to the original constructs of risk management aspects. The study is based on a questionnaire survey of 423 banking staff from 13 licensed banks in Somalia. The researcher adopted a questionnaire that covers six aspects of risk management with perceived trust: understanding risk and risk management, risk assessment and analysis, risk identification, risk monitoring, credit risk analysis, perceived trust, and RMPs. This study found that the staff of Somalia have a clear understanding of risk and risk management and have efficient risk identification, risk assessment, risk monitoring, credit risk analysis, perceived trust, and risk management practices. In addition, the respondents also recognize that the banks do not have deposit insurance, which is a risk to the depositors if the bank goes bankrupt. The paper’s findings are limited to the risk management aspects of the bank industry, with additional perceived trust in Somalia. The paper explores the risk management practice in the Somali bank sector. The results can be used as valuable feedback for improving risk management practice in the banking industry. This study is the first research attempt to investigate risk management practice with additional trust.

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“…As a result, the current argument is supported by the negative impact on economic growth of increased government investment and public debt. It has been demonstrated (Ali et al, 2017) As a result, while analyzing the influence of public debt and government spending on economic expansion, the nonlinear relationship must be considered. The following are the key explanations: To begin, the crowding out effect would reduce the economic growth impact of government investment if the impact of government investment on economic growth shifted from positive to negative as government size increased.…”

Section: Introductionmentioning

confidence: 99%

The Effect of Domestic and Public Investment on Economic Growth in Somalia

Mohamud,

Marof,

Mohamed

et al. 2023

IJARBSS

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Government expenditures possess the potential to exert either a favorable or detrimental influence on an economy. Augmentations in public investment yield augmented yields, enhancing the output and employment status of any nation and propelling economic expansion. The study conducts an in-depth investigation into the intricate relationship between government spending, public investment, and their impact on economic growth. It offers a nuanced understanding of this complex interplay by drawing on economic theories, empirical studies, and real-world examples. The study employs robust econometric methods, specifically the Ordinary Least Squares (OLS) regression, to investigate the impact of public investment and domestic investment on GDP growth. The results reveal a strong and positive relationship between both public investment and domestic investment with economic growth. Specifically, a one percent increase in domestic investment correlates with a substantial 53.1 percent increase in GDP, emphasizing the significance of private sector investments. Similarly, a one percent increase in public investment results in a notable 23.3 percent GDP increase, highlighting the role of government-led initiatives, particularly infrastructure projects, in promoting economic growth. These findings validate the importance of a balanced approach that leverages both public and private investments for sustainable economic growth. The study underscores the importance of balancing public and private investments for economic growth while emphasizing the need for tailored policies that consider specific contextual factors in emerging economies like Somalia.

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Determinants of Economic Growth: Evidence from Somalia

Cited by 5 publications

References 13 publications

An empirical study of the relationship between Foreign Direct Investments, Remittances, Political Stability and Economic Growth in Greece

An empirical study of the relationship between Foreign Direct Investments, Remittances, Political Stability and Economic Growth in Greece

Effective risk management practice in Somalia Islamic banks

The Effect of Domestic and Public Investment on Economic Growth in Somalia

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