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on Arab World |
| By: | Ferda, HALICIOGLU; Kasim, EREN |
| Abstract: | This paper provides fresh evidence on the validity of twin deficit and the Feldstein-Horioka hypotheses for Turkey during the period of 1987-2004 using bounds testing approach to cointegration. In order to explain the main determinants of the current account deficits in the long-run, the fiscal balance and the domestic investments are used in an econometric model.The cointegration tests indicate the presence of a long-run relationship between the current account and budget deficits as well as the domestic investments during the estimation period. As a result, it is concluded that the twin deficit hypothesis and the Feldstein-Horioka puzzle are present and Turkey appeared to be integrated in the world capital market with a low degree of capital mobility as less than 1/5 of its domestic investment is financed through external funds. The augmented Granger-causality tests suggest no causality between the current account and budget deficits, both in the short-run and the long-run. The post-sample variance decompositions suggest that the domestic investments are the main cause of current deficits in the long-run. The paper also discusses the policy implications of the empirical results. |
| Keywords: | twin deficits, Feldstein-Horioka hypotheses, cointegration, Turkey |
| JEL: | C22 F32 F36 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:50098&r=ara |
| By: | Asongu Simplice (Yaoundé/Cameroun) |
| Abstract: | This paper projects the future of knowledge economy (KE) in SSA and MENA countries using the four components of the World Bank’s Knowledge Economy Index (KEI): economic incentive, education, ICTs and innovation. The empirical evidence provides the speeds of integration as well as the time necessary to achieve full integration. Findings broadly indicate SSA and MENA countries with low levels in KE will catch-up their counterparts with higher levels in a horizon of 4 to 7.5 years. |
| Keywords: | Knowledge economy; Principal Component Analysis; Panel data; Convergence |
| JEL: | F42 O10 O38 O57 P00 |
| Date: | 2013–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:13/015&r=ara |
| By: | Geesche M. Merkle (Georg-August University Göttingen); Rico Ihle (Georg-August University Göttingen); Yael Kachel (Israeli Ministry of Agriculture and Rural Development); Ulf Liebe (University of Cambridge) |
| Abstract: | The ongoing political conflict between Israel and the Palestinian territories results in an increasing physical separation and societal alienation of both conflicting parties. In some contexts such as trade ongoing cooperation exists. We provide a micro-level analysis of economic interactions between Israeli and Palestinian wholesale traders of fruits and vegetables. We use a unique dataset gathered by a quantitative survey among Israeli wholesale traders in order to obtain evidence on their perspectives on this economic exchange. Trading patterns show vivid economic exchange of mainly informal character. Logistic regressions suggest that education and the personal social network play vital roles for the existence of Israeli-Palestinian trading relationships. Israeli traders feel not affected by the conflict but wish for its quick settlement. A low level of transaction problems is reported. They are mainly caused by the political and security situation and by the payment behavior of the Palestinian trading partners. Daily contacts of economic agents lead to continuous economic cooperation despite of ongoing political conflict and improve the perception of the actors of the other party. |
| Keywords: | food trade; Middle East; quantitative survey; political conflict |
| JEL: | F14 Q17 Z13 |
| Date: | 2013–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:got:gotcrc:151&r=ara |
| By: | Asongu Simplice (Yaoundé/Cameroun) |
| Abstract: | Purpose – This paper assesses dynamics of the knowledge economy (KE)-finance nexus using the four variables identified under the World Bank’s knowledge economy index (KEI) and seven financial intermediary dynamics of depth, efficiency, activity and size. Design/methodology/approach – Principal Component Analysis is used to reduce the dimensions of KE components before dynamic panel GMM estimation techniques are employed to examine the nexuses. Findings – Four main findings are established. (1) Education improves financial depth and financial efficiency but mitigates financial size. (2) But for a thin exception (trade’s incidence on money supply), economic incentives (credit facilities and trade) are not consistently favorable to financial development. (3) ICT improves only financial size and has a negative effect on other financial dynamics. (4) Proxies for innovation (journals and FDI) have a positive effect on financial activity; journals (FDI) have (has) a negative (positive) effect on liquid liabilities and; journals and FDI both have negative incidences on money supply and banking system efficiency respectively. Practical Implications – As a policy implication, the KE-finance nexus is a complex and multidimensional relationship. Hence, blind and blanket policy formulation to achieve positive linkages may not be successful unless policy-making strategy is contingent on the prevailing ‘KE specific component’ trends and dynamics of financial development. Policy makers should improve the economic incentive dimension of KE that overwhelmingly and consistently deters financial development, owing to surplus liquidity issues. Originality/value – As far as we have reviewed, this is the first paper to examine the KE-finance nexus with the plethora of KE dimensions defined by the World Bank’s KEI and all the dynamics identified by the Financial Development and Structure Database (FDSD). |
| Keywords: | Financial development; Knowledge Economy |
| JEL: | G21 O10 O34 P00 P48 |
| Date: | 2013–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:13/022&r=ara |
| By: | Asongu Simplice (Yaoundé/Cameroun) |
| Abstract: | This paper assesses the relevance of intellectual property rights (IPRs) in the knowledge economy (KE)-finance nexus using the four variables identified under the World Bank’s knowledge economy index (KEI) and seven financial intermediary dynamics of depth, efficiency, activity and size. Three main findings are established: (1) education increases financial dynamics of depth and size; (2) economic incentives by means of credit facilities (trade openness) mitigate financial dynamics of efficiency and activity (financial dynamics of depth and size) and; (3) ICT and FDI both improve financial depth and decrease financial size (with FDI having an additional edge of improving financial activity). As a policy implication, the enforcement of IPRs is not a general and sufficient condition for positive KE-finance nexuses. Hence, blanket upholding of IPRs to achieve such positive linkages may not be successful unless policy is contingent on the prevailing ‘KE specific component’ trends and dynamics of financial development. |
| Keywords: | Financial development; Knowledge economy; Intellectual property rights |
| JEL: | K42 O10 O34 O38 P48 |
| Date: | 2013–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:13/023&r=ara |
| By: | Satti, Saqlain Latif; Farooq, Abdul; Shahbaz, Muhammad |
| Abstract: | This present study investigates the relationship between natural resource abundance and economic growth in Venezuelan economy. We have applied the ARDL bounds testing approach to cointegration developed by Pesaran et al. (2001) to examine long run relationship between the variables. The VECM Granger causality is applied to test the direction of causality between the variables. The present study covers the period of 1971-2011. Our empirical evidence indicated that variables are found to be cointegrated. The results confirm that natural resource abundance impedes economic growth. Financial development, capital stock and trade openness enhance economic growth. The feedback hypothesis is also found between natural resource abundance and economic growth. |
| Keywords: | natural resource abundance, economic growth, cointegration |
| JEL: | C3 |
| Date: | 2013–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:50150&r=ara |