Impact of economic growth on international reserve holdings in Brazil

Kashif, Mohammad; Sridharan, P.; Thiyagarajan, S.

doi:10.1590/0101-31572017v37n03a08

Cited by 17 publications

(13 citation statements)

References 16 publications

(3 reference statements)

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“…This might be due to the reason that the savings are not effectively utilized in order to make innovations in the technology of the country thus having no impact on the economy. This result is in accordance with the past studies regarding finance growth nexus (Aghion, Comin, Howitt, & Tecu, 2016;Kashif, Sridharan, & Thiyagarajan, 2017). Moreover, the impact of trade openness has been found as significant along with negative in Brazil.…”

Section: Discussionsupporting

confidence: 92%

The Finance-Growth Nexus: An Empirical Analysis from Brazil

Marqués¹,

Almeida²,

Silva³

2020

Journal of Accounting, Business and Finance Research

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A well-established financial system is very crucial for the economic growth and development of any country. There are many aspects that are studied in relation with financial development such as savings, investments, and technical innovations etc. which affect the growth of economy in a country in one way or the other. In this context, the researcher has designed this study to explore the relationship amid financial development and economic growth of Brazil, which is clear from the title of the study i.e. finance-growth nexus. In continuation of this objective, the researcher has collected data from Brazil and the collected data is time series. The period for which the data has been gathered comprises of 30 years and has been collected from the most authentic sources of data or databases such as World Bank Development. The collected data has been analyzed by applying the techniques such as unit root, bounds test and ARDL estimation. These results indicate that private credit has noteworthy along with positive impact on economic growth. The next result of the study suggests that gross domestic saving does not pose any momentous impact on the economic growth of the country. The impact of trade openness has been found as significant along with negative in Brazil. The inflation has significant but negative impact on economic growth in longer run but this impact is insignificant in shorter run.

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Section: Discussionsupporting

confidence: 92%

The Finance-Growth Nexus: An Empirical Analysis from Brazil

Marqués¹,

Almeida²,

Silva³

2020

Journal of Accounting, Business and Finance Research

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“…This finding is supported by the Granger analysis that revealed a unidirectional causality that runs from the GDP to FER, but not from FER to GDP. Similar findings have been reported by a study in Brazil [10] and some othe Nigerian studies [5,8,11,25]. Some of the Nigeria-based studies have suggested the need for judicious management of Nigeria's external reserves, as well as institution of pro accumulation policies to enhance economic growth.…”

Section: Resultssupporting

confidence: 86%

“…This finding is supported by the Granger-causality analysis that revealed a unidirectional causality that runs from the GDP to FER, but not from FER to GDP. Similar findings have been reported by a study in Brazil [10] and some other previous 25]. Some of the based studies have suggested the need for judicious management of Nigeria's external reserves, as well as institution of pro-reserves accumulation policies to enhance economic me of this investigation corroborates the argument that a well performing economy is a positive indication of the inward flow of "foreign direct investment" that has positive influence on the stock of the nation's foreign reserves [25].…”

Section: Fig 5 Output Of the Cusum And Cusum Of Squares Tests Of Stsupporting

confidence: 93%

“…It is opined that suitable management of FER is imperative for attainment of economic progress [8], which corroborates the view elsewhere that countries with increasing FER to GDP ratio have higher capital productivity and growth rates [9]. In the same vein, it is held that the state of a nation's FER influences its global rating given that the creditors, donors, and all others associate a country's financial responsibility and creditworthiness to the degree of robustness of its FER [10]. Stockpiling FER would lead to reduced exchange rates and increased exportled growth while swiftly rising FER-to-GDP ratio would lead to equally rising investment-to-GDP and trade-to-GDP ratios, capital productivity, and economic growth rates [11].…”

Section: Introductory Commentmentioning

confidence: 54%

“…Several research have attempted to explore the relatedness of economic performance to stocks of foreign reserves in different countries [9][10][11][12]. For instance, the dynamic relationship between economic growth and FER was analyzed in Brazil from 1980-2014, using the error correction mechanism [10].…”

Section: Literature Reviewmentioning

confidence: 99%

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Linkages between External Reserves and Economic Performance in Nigeria, 1981-2018: Bounds Test and ARDL Approaches

Ojiako

2020

SAJSSE

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Aims: This study seeks to explore a two-way relationship between Nigeria’s economic performance, measured by the GDP, and her stock of foreign reserves over time. Study Design: It uses secondary data - documented time series of Nigeria’s gross domestic product (GDP) and foreign exchange reserves (FER) – collected from various volumes of the Central Bank of Nigeria (CBN) Statistical Bulletin. The annual time series data cover a period of 38 years, from 1981-2018. Methodology: The time series properties of the variables were verified using the Augmented Dickey-Fuller (ADF) unit roots’ test procedure. Also, the Bounds test technique was used to test for cointegration while the autoregressive distributed-lag (ARDL) and error correction models were estimated to analyze short- and long-run relationships between the variables. Relevant diagnostic tests were carried out to validate the resultant model estimates. Results: Results of unit roots’ test reveal both GDP and foreign reserves as I(1) series. Bounds test for the GDP model revealed an observed F-statistic (.421) that is less than the critical lower bound F-statistic (4.94) at P=.05 and cointegrating relationship was not confirmed. However, Bounds test for the foreign reserves revealed an observed F-statistic (6.445) lager than the critical upper bound F-statistic (5.73) at P=.05 and cointegration was established leading to specification of a long-run error correction model (ECM). Result of ARDL model estimation shows that only one-year-lag of GDP was significant (P=.05) and positive in explaining variations in the current GDP. Previous year’s values of both GDP and foreign reserves have positive influence on the long-run foreign exchange with over 81.8% explanatory power. The adjustment coefficient of the error correction equation is highly significant (P=.001) with the desired negative sign, implying that previous periods’ errors are correctable by adjustments in the subsequent periods, and convergence is attainable. Granger-Causality test result revealed a unidirectional causality that runs from GDP to the external reserves. Conclusion: The study establishes a long-run relationship between stock of foreign reserves and economic performance in Nigeria. The finding corroborates the view that a booming economy has the propensity to attract foreign direct investment thereby boosting the stock of the country’s foreign reserves. To attract more FDI in the critical sectors of the Nigerian economy, the government should create enabling and investment-friendly environment, implement policies and programmes capable of amplify ease-of-doing-business, and boost investors’ confidence in the economy.

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Investigating the Asymmetric Impact of Public Debt on Economic Growth in Nigeria

Yusuf

Mohd

2023

J Knowl Econ

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Impact of economic growth on international reserve holdings in Brazil

Cited by 17 publications

References 16 publications

The Finance-Growth Nexus: An Empirical Analysis from Brazil

The Finance-Growth Nexus: An Empirical Analysis from Brazil

Linkages between External Reserves and Economic Performance in Nigeria, 1981-2018: Bounds Test and ARDL Approaches

Investigating the Asymmetric Impact of Public Debt on Economic Growth in Nigeria

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