Tekam Oumbe Honore , Tchouassi Gerard (2018). Trade Policy and Democracy for Development in Central African Countries. Journal of Empirical Studies, 5(1): 55-66. DOI: 10.18488/journal.66.2018.51.55.66
This article shows that trade policy and democracy positively affect economic development. A panel of 11 Central Africa economies with 176 observations from 1995 to 2010 is used to econometrically test this hypothesis. The use of Generalised Least Squares (GLS) shows that there is a link between economic development, captured using Human Development Indicators (HDI), democracy, imports, exports, inflation and regional integration. Inflation and exports negatively affect the well-being of the population. An increase in the inflation rate causes a reduction in purchasing power. An increase in the exports of commodities tends to decrease the quantity of goods available for the country of origin. Imports have a positive effect on HDI probably because this variable tends to increase the quantity of goods available. Imports and democracy have a positive effect on the level of development in Central African countries. The findings are important to policy makers Central Africa who seek to increase trade within, between and with other democratic countries.
This study documents that trade policy and democracy contribute positively to economic development.
Industrialization and Economic Growth in Sub-Saharan Africa: The Role of Human Capital in Structural Transformation
Kwami Ossadzifo WONYRA (2018). Industrialization and Economic Growth in Sub-Saharan Africa: The Role of Human Capital in Structural Transformation. Journal of Empirical Studies, 5(1): 45-54. DOI: 10.18488/journal.66.2018.51.45.54
The objective of this paper is to analyze the impact of the manufacturing sector on economic growth through the role of human capital. Our data cover Sub-Saharan African (SSA) countries from 1990 to 2015. We use fixed effects, random-effects and Hausman-Taylor estimators. We take into account the unobservable characteristics of countries by including fixed effects or random effects in the model. Our results show that the manufacturing sector through its value added has a positive impact on economic growth in SSA countries. In addition, the interacting models show that the quality of human capital is an accelerator of the role of the manufacturing sector. The coefficient of the catch-up term is negative and significant in all models indicating that countries with a larger productivity gap relative to China are developing faster than countries closer to China. This finding is consistent with the convergence effects usually found in growth model estimates, which are either related to convergences towards a stable state or to a catching-up of growth linked to the international diffusion of knowledge.
Unlike previous work, this article brings three major innovations. First, the inclusion of the key role of human capital, then the construction of the productivity indicator by considering China as a reference, and finally the consideration of the endowments of natural resources of countries in sub-Saharan Africa as country-specificity.
Leading Indicators and Financial Crisis: A Multi-Sectoral Approach Using Signal Extraction
Mpho Bosupeng (2018). Leading Indicators and Financial Crisis: A Multi-Sectoral Approach Using Signal Extraction. Journal of Empirical Studies, 5(1): 20-44. DOI: 10.18488/journal.66.2018.51.20.44
Using signal extraction, this study identifies leading indicators of financial crisis over the period 1980-2015 in developing and advanced economies. The study evaluates vulnerability in the external, public and financial sector in developing countries. The results postulate that the level of imports is the principal leading indicator for detecting a forthcoming crisis in developing nation’s external sector. In the public sector, the best indicators for predicting a crisis in South Africa are in the order: maturity of debt; external debt; debt-GDP ratio; interest rate payments; short-term debt and government expenditure. In Namibia, the best indicator for predicting crisis is total expenditure and interest rate payments. Comparatively, Russia’s crises are better predicted by the following variables: debt ratio; interest rate payments; short-term debt; expenditure and external debt. The two best indicators were debt ratio and interest rate payments. In the financial sector, the common risk indicator among developing economies is the lending rate. The external balance sheet assessment shows that in developed countries, predictors of a financial emanate from portfolio investments and direct investments. For the UK, the best indicators of a looming financial crisis are: direct investment liabilities; portfolio debt liabilities and direct investment debt instruments.
This study is one of the first contributions in early warning systems that assesses vulnerability in multiple sectors of an economy which are external, public and financial sectors. To the best of the author’s knowledge, this study is also the first to determine external balance sheet assessment in developed nations.
Urban Population Growth and Environmental Sustainability in Nigeria
Richardson Kojo Edeme , Nnadi Paschal Chibuzo (2018). Urban Population Growth and Environmental Sustainability in Nigeria. Journal of Empirical Studies, 5(1): 12-19. DOI: 10.18488/journal.66.2018.51.12.19
It is believed that the increasing urban population has led to rapid forest decline and degradation of the environment. This paper examines the impact of urban population growth on environmental sustainability using Nigeria data from 1981-2017. The variables used are urban population growth, fossil fuel consumption, carbon emissions, food production index, arable land, and agricultural raw material exports with renewable energy consumption and forest reserves as explanatory variables. Autoregressive lag model was used to determine the impact of urban population on renewable energy consumption and forest reserves, which are proxies for sustainable environment. From the findings, urban population growth had significant impact on environmental sustainability while real gross domestic product does not have significant impact on renewable energy consumption and forestry. Findings also show that urban population growth increase renewable energy consumption but decrease forest reserves. A basic policy in this direction is effective curtailing in the rate of population growth and depletion of forest reserves.
This study contributes in existing literature by examining the influence of urban population growth on several sustainable environment variables such as fossil fuel consumption, carbon emissions, renewable energy consumption and forest reserves.
Disaggregated Foreign Capital Inflows and Economic Growth in a Developing Economy: Empirical Evidence from Nigeria
Onyinye I. Anthony-Orji , Anthony Orji , Jonathan E. Ogbuabor , Emmanuel O. Nwosu (2018). Disaggregated Foreign Capital Inflows and Economic Growth in a Developing Economy: Empirical Evidence from Nigeria. Journal of Empirical Studies, 5(1): 1-11. DOI: 10.18488/journal.66.2018.51.1.11
This study estimates the impact of Foreign Capital Inflows on economic growth in Nigeria from 1986Q1 – 2014Q4. For empirical analysis, the paper adopts the Auto-Regressive Distributed Lag- Unrestricted Error Correction Model (ARDL-UECM). Empirical evidence from the ARDL-bounds Co-integration Test shows there is co-integration between Economic Growth (proxied by Growth rate of Real Gross Domestic Product) and Foreign Capital Inflows (disaggregated into Foreign Direct Investment, Foreign Portfolio Investment and Workers’ Remittances) in Nigeria. The results also show that apart from remittances, other components of Foreign Capital Inflows have significant impact on Economic Growth in Nigeria. The study therefore recommends that Government should, alongside other economic activities, provide an enabling economic environment for more Foreign Capital Inflows. Also the financial sector should be improved so that workers’ remittances can be efficiently tracked through the banking channels and also put to productive use. This is how to minimize the negative impact of workers’ remittance inflows into Nigeria.
This study contributes to existing literature as one of the recent empirical papers that focus on the disaggregated impact of Foreign Capital Inflows on economic growth in Nigeria using the framework of the Auto-Regressive Distributed Lag- Unrestricted Error Correction Model (ARDL-UECM).