The Importance of the Financial Derivatives Markets to Economic Development in the World’s Four Major Economies

Vo, Duc Hong; Huynh, Son Van; Dao, Ha

doi:10.3390/jrfm12010035

Cited by 50 publications

(46 citation statements)

References 43 publications

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“…The long-run estimates are estimated by the FMOLS (Fully Modified Least Squares estimation). It is widely known that both FMOLS and DOLS are often used to investigate long-run relationships (Vo and Vo 2017;Vo et al 2019b). In this research, we are motivated to use FMOLS since Banerjee (1999) argued that the FMOLS and DOLS estimates are asymptotically equivalent for data with observations higher than 60.…”

Section: Fully Modified Least Squares Estimationmentioning

confidence: 99%

Foreign Direct Investment and Economic Growth in the Short Run and Long Run: Empirical Evidence from Developing Countries

Dinh¹,

Vo²,

Nguyen³

2019

JRFM

169

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A contribution of foreign direct investment to economic growth is possibly one of the widely examined topics in academic research in the last five decades. However, few studies have examined both the short run and long run impacts of this effect concurrently for developing and emerging markets, in particular during the period of economic turmoil that includes the global financial crisis. As such, this paper examines and provides additional and relevant quantitative evidence on the impact of foreign direct investment (FDI) on economic growth, both in the short run and the long run in developing countries of the lower-middle-income group in 2000–2014. Various econometric methods are employed such as the panel-based unit root test, Johansen cointegration test, Vector Error Correction Model (VECM), and Fully Modified OLS (FMOLS) to ensure the robustness of the findings. The results of this study show that FDI helps stimulate economic growth in the long run, although it has a negative impact in the short run for the countries in this study. Other macroeconomic factors also play an important role in explaining economic growth in these countries. Money supply has a positive effect on growth in the short run while total credit for private sector has a negative effect. In addition, long-run economic growth is driven by money supply, human capital, total domestic investment, and domestic credit for the private sector. Based on these results, recommendations for the governments of these countries have been developed.

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Section: Fully Modified Least Squares Estimationmentioning

confidence: 99%

Foreign Direct Investment and Economic Growth in the Short Run and Long Run: Empirical Evidence from Developing Countries

Dinh¹,

Vo²,

Nguyen³

2019

JRFM

169

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“…For details of the procedures in the bounds test, see earlier studies, such as Pesaran et al (2001) and Vo et al (2019).…”

Section: Granger-causality Testmentioning

confidence: 99%

CO2 Emissions, Energy Consumption, and Economic Growth: New Evidence in the ASEAN Countries

2019

JRFM

Self Cite

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The members of the Association of Southeast Asian Nations (ASEAN) have made several attempts to adopt renewable energy targets given the economic, energy-related, environmental challenges faced by the governments, policy makers, and stakeholders. However, previous studies have focused limited attention on the role of renewable energy when testing the dynamic link between CO2 emissions, energy consumption and renewable energy consumption. As such, this study is conducted to test a common hypothesis regarding a long-run environmental Kuznets curve (EKC). The paper also investigates the causal link between carbon dioxide (CO2) emissions, energy consumption, renewable energy, population growth, and economic growth for countries in the region. Using various time-series econometrics approaches, our analysis covers five ASEAN members (including Indonesia, Myanmar, Malaysia, the Philippines, and Thailand) for the 1971–2014 period where required data are available. Our results reveal no long-run relationship among the variables of interest in the Philippines and Thailand, but a relationship does exist in Indonesia, Myanmar, and Malaysia. The EKC hypothesis is observed in Myanmar but not in Indonesia and Malaysia. Also, Granger causality among these important variables varies considerably across the selected countries. No Granger causality among carbon emissions, energy consumption, and renewable energy consumption is reported in Malaysia, the Philippines, and Thailand. Indonesia experiences a unidirectional causal effect from economic growth to renewable energy consumption in both short and long run and from economic growth to CO2 emissions and energy consumption. Interestingly, only Myanmar has a unidirectional effect from GDP growth, energy consumption, and population to the adoption of renewable energy. Policy implications have emerged based on the findings achieved from this study for each country in the ASEAN region.

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“…They propose a graphical tool and a test based on the Mahalanobis distance to guide the choice between the competing models, and also present an application to model vectors of financial assets returns. Vo et al (2019b) observe that, over the last three decades, China and India have attained economic power close to that of Japan and the U.S. During this period, the importance of the derivatives market within the financial market has been widely recognized. However, little supporting evidence is available on its economic effects.…”

Section: Discussion Of the Review Papersmentioning

confidence: 99%

Editorial for Applied Econometrics

Chang

2020

JRFM

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This Editorial evaluates 14 invaluable and interesting articles in the Special Issue “Applied Econometrics” for the Journal of Risk and Financial Management (JRFM). The topics covered include recovering historical inflation data from postage stamps prices, FHA loans in foreclosure proceedings through distinguishing sources of interdependence in competing risks, information in earnings forecasts, nonlinear time series modeling, a systemic approach to management control through determining factors, economic freedom and FDI versus economic growth, efficient cash use of the Taiwan dollar, financial health prediction in companies from post-Communist countries, influence of misery index on U.S. Presidential political elections, multivariate student versus Gaussian regression models in finance, financial derivatives markets and economic development, income inequality and economic growth in middle-income countries, abnormal returns, mis-measured risk, network effects, and risk spillovers in stock returns.

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The Importance of the Financial Derivatives Markets to Economic Development in the World’s Four Major Economies

Cited by 50 publications

References 43 publications

Foreign Direct Investment and Economic Growth in the Short Run and Long Run: Empirical Evidence from Developing Countries

Foreign Direct Investment and Economic Growth in the Short Run and Long Run: Empirical Evidence from Developing Countries

CO2 Emissions, Energy Consumption, and Economic Growth: New Evidence in the ASEAN Countries

Editorial for Applied Econometrics

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