Purpose — Theoretically, the impact of globalisation is ambiguous, and the empirical evidence inconclusive. This study aims to conclusively determine the effects of the various dimensions of globalisation on Turkey’s economic growth. Method — The study employs the autoregressive distributed lag (ARDL) framework to estimate both short-run and long-run effects of globalisation. Globalisation is measured using the KOF Globalisation Index, disaggregated into de jure, de facto, economic, social, and political dimensions. Human capital is proxied by the Human Development Index (HDI), while physical capital is captured by gross fixed capital formation as a percentage of GDP. Findings — The results based on the aggregate globalisation index reveal a positive and significant long-run effect of globalisation on Turkey’s economic growth. However, neither short-run nor long-run effects are observed when aggregate de jure and de facto globalisation indices are used. Furthermore, economic and social globalisation exert a significant negative impact on GDP growth in the short run, though no long-run effects are detected. Implications — The findings suggest that while globalisation can support long-term economic growth, its short-term effects—particularly through economic and social channels—may pose adjustment challenges that require appropriate policy responses. Originality/value — This study contributes to the globalisation–growth literature by providing a comprehensive, disaggregated analysis of globalisation in Turkey using a long time series and the ARDL approach.
Purpose — This study examines how global economic policy uncertainty (GEPU) shapes government expenditure dynamics in emerging market economies. Methods — Using an annual panel of 28 emerging economies from 1998 to 2023, this study analyzes short-run fiscal adjustments and long-run equilibrium relationships between global uncertainty and public expenditure. To address challenges arising from mixed integration orders and cross-sectional dependence driven by global shocks, it employs a multistage empirical strategy that combines fixed-effects estimation, Driscoll–Kraay robust inference, and a cross-sectionally augmented dynamic error-correction model (ECM). Findings — The results provide robust evidence that higher GEPU is associated with higher government expenditure as a share of Gross Domestic Product (GDP). This relationship holds across alternative specifications and persists in the long run, indicating that fiscal responses to uncertainty are not purely transitory. Dynamic estimates reveal a statistically significant error-correction mechanism, confirming a stable long-term relationship among government expenditure, global uncertainty, and domestic economic conditions. Structural factors, particularly urbanization, further shape fiscal outcomes, whereas income per capita enters with a negative sign, though its effect is not consistently statistically significant across specifications. Implication — The findings have important implications for fiscal sustainability and policy design in an increasingly uncertain global environment. Originality — By explicitly accounting for non-stationarity and unobserved common global factors, this study contributes to the literature by providing new evidence of how emerging market governments respond to global risks.
Purpose — This study investigates the impact of economic complexity on income levels across countries at different stages of economic development, with particular emphasis on how these effects vary across the income distribution. Method — A dynamic panel quantile regression approach is employed to analyse panel data from 115 countries over the period 1995–2020. GDP per capita is used as a proxy for income, allowing the analysis to capture heterogeneous effects across different quantiles of income distribution. The key control variables include human capital, population, trade openness, institutional quality, and inflation. Findings — The results reveal significant heterogeneity in the effects of economic complexity across income levels. Economic complexity has a positive and significant impact on income at higher quantiles, indicating that more advanced economies benefit from increased productive capabilities. Conversely, at lower quantiles, the effect is negative, suggesting that less-developed countries are unable to fully capitalise on rising complexity. Implications — The findings suggest that policy strategies should be tailored to different stages of development. Low-income countries need to enhance skill formation and structural transformation to benefit from complexity, while high-income countries should focus on innovation and diversification. Strengthening human capital and institutional quality is essential to mitigating the effects of inequality. Originality — This study contributes to the literature by highlighting the heterogeneous effects of economic complexity using a dynamic panel quantile framework, offering new insights into income differences across development levels, an aspect largely overlooked in previous research.
Purpose — This study investigates the impact of Information and Communication Technology (ICT) trade flow components, specifically ICT service exports, ICT goods exports, and ICT goods imports, alongside economic complexity and renewable energy share on carbon emissions. Methodology — A panel of BRICS countries from 2000 to 2022 is estimated using a second-generation cross-sectional autoregressive distributed lag (CS-ARDL) model that accounts for cross-sectional dependence and slope heterogeneity across countries. Findings — Gross domestic product per capita and economic complexity are positively associated with carbon emissions. ICT trade flows have heterogeneous effects on emissions. ICT services, exports, and renewable energy consumption significantly reduce carbon emissions. However, ICT goods exports and imports have an insignificant effect on carbon emissions. Implications — The results suggest that the BRICS countries must emphasise policy measures that promote the export of ICT services, accelerate renewable energy adoption, and promote industrial transformation policies towards sustainable production practices. Originality — This study focuses on supply-side ICT trade channels and disaggregates them into ICT goods exports, imports, and service exports. Furthermore, this study applies second-generation estimation techniques that are robust to cross-sectional dependence and slope heterogeneity
Purpose — This paper examines the relationship between South Africa’s rising public debt and real exchange rate (RER) volatility. Over the past two decades, the country has experienced an alarming increase in external and domestic debt levels, accompanied by episodes of exchange rate instability and deteriorating economic performance. Method — Using annual data from 2000 to 2024, we estimate an ARDL model to assess the nexus between debt and exchange rate volatility. Findings — The results suggest that public debt is a significant driver of exchange rate volatility and rand depreciation. However, interest rates, inflation, and trade openness are key factors responsible for significant fluctuations in the exchange rate in South Africa. Similar results are obtained in both the short-run and long-run estimation. Implications — The paper recommends firm government controls designed to prevent sharp capital movements (inflows or outflows) that could destabilise the rand. This can be achieved by maintaining a favourable trade balance, targeting inflation, and adjusting monetary policy. Secondly, the government can diversify the composition of its debt currency. This helps reduce volatility in debt-servicing payments and further stabilises government budgets and fiscal planning. Originality — There is little empirical literature on the direct relationship between public debt and real exchange rate volatility in South Africa. This study aims to fill the gap by providing a novel empirical assessment of the long- and short-run dynamics between rising public debt and real exchange rate volatility.
Purpose — This study examines the symbiotic relationship between women's representation in parliament and domestic credit, and the direct and indirect pathways by which these factors influence economic prosperity in Southern African Development Community (SADC) countries. Methods — Panel data from 16 SADC countries over the period 1997 -2022 are analysed using Generalised Method of Moments (GMM) and Generalised Structural Equation Modelling (GSEM), with a focus on the examination of interaction effects and diminishing returns of women’s parliamentary representation and domestic credit on economic prosperity. Findings — The results indicate that women’s representation in parliament has a significant positive effect on economic prosperity, with the effect strengthened by domestic credit. Domestic credit also contributes indirectly to economic growth by enhancing women’s economic influence. Implication — These findings provide important insights for policymakers, highlighting the need for a balanced strategy that promotes both women’s political participation and financial inclusion while avoiding potential economic imbalances. Originality — This study contributes to the literature by integrating gender, finance, and economic growth within the SADC context and by uncovering indirect pathways through which domestic credit affects economic prosperity via women’s political empowerment.
Purpose — Single motherhood is widely associated with poorer child outcomes, yet it remains unclear whether these disadvantages stem from family structure itself or from the economic shocks that accompany it. This distinction is particularly important in developing-country contexts, where weak social protection and labor market informality may amplify both channels. We examine how different pathways into single motherhood affect children’s cognitive development. Methods — We use longitudinal data from the Indonesia Family Life Survey (IFLS) and employ Structural Equation Modeling (SEM) to estimate both direct and indirect effects of maternal marital status on children’s cognitive outcomes, while controlling for demographic and household characteristics. Findings — The results show that children in single-mother households, particularly those experiencing divorce, have lower cognitive scores. Poverty plays a key mediating role, as higher poverty levels are associated with worse cognitive outcomes. Households headed by divorced individuals exhibit higher poverty, while the effect of widowhood is smaller and not statistically significant. In addition, larger household size and greater distance from economic centers increase poverty, whereas higher education of the household head and per capita expenditure reduce it. Implication — The findings suggest that policies targeting single-mother households should address both economic vulnerability and structural constraints, including limited access to services and unequal labor market opportunities. Originality — This paper contributes to the limited longitudinal literature in developing countries by comparing divorce and widowhood and their roles in perpetuating intergenerational disadvantages through economic and non-economic channels.
Purpose — Adopting an asymmetric approach, this study analyses the impact of economic and monetary uncertainties on money demand within an open-economy framework for Pakistan. Its primary objective is to assess whether the positive and negative components of each type of uncertainty deliver a differential impact on money demand. Methods — The study employs the Nonlinear Autoregressive Distributed Lag (NARDL) framework to examine the long-run and short-run money demand function over the period 1975–2024. Findings — The results reveal distinct asymmetric effects. Rising economic uncertainty (VY) decreases money demand, while a decline in economic uncertainty has a positive but comparatively weaker effect. Conversely, increasing monetary uncertainty (VM) drives up demand, while a decline in monetary uncertainty reduces money demand. These findings suggest that for the positive component of VY, the substitution effect dominates the precautionary effect; however, as VM increases, the precautionary effect overwhelms the substitution effect. The overall findings also indicate that agents are more sensitive to real sector volatility than to monetary volatility. Moreover, the exchange rate, along with traditional determinants, significantly influences short- and long-run money demand. Implication — The results suggest that monetary authorities should consider the source and sign of uncertainty shocks to properly anticipate liquidity needs and achieve monetary stability. Originality — This study is the first of its kind in Pakistan to explore the asymmetric relationship among economic volatility, monetary volatility, and money demand within an open-economy framework
Purpose — This study examines the nonlinear effect of Economic Policy Uncertainty (EPU) on China’s Renminbi (RMB) exchange rate. Methods — Based on the monetary model of exchange rate determination and the behavioural equilibrium exchange rate model, a threshold autoregressive model was estimated with EPU as the threshold variable. Quarterly data from Q1 2005 to Q4 2023 were utilised. Finding — Under different regimes, the effects of EPU, monetary factors, and macroeconomic factors on the exchange rate are nonlinear. The study also reveals significant differences in the volatility characteristics of exchange rate misalignment under low and high EPU conditions, supporting the hypothesis that EPU has a nonlinear impact on the exchange rate. Furthermore, when EPU is low, external shocks exert a stronger impact on the exchange rate than when EPU is high. Implications — These results suggest that governments and policymakers can help investors anticipate market shifts by increasing policy transparency and reducing unnecessary policy changes, thereby maintaining economic stability. Originality — By integrating EPU into a framework combining the monetary model and the BEER model and estimating a nonlinear threshold model, this study provides new evidence on exchange rate dynamics and misalignment under varying EPU regimes
Purpose — Understanding extreme downside risk is particularly important in emerging equity markets, where higher market volatility, lower liquidity, and weaker information environments make stock prices more vulnerable to sudden, severe crashes. This study examines downside risk, stock price crash risk, and lower-tail return dynamics using firm-level stock return data for firms listed in the Pakistan Stock Exchange over the period 2014–2024. Method — Using panel regression and quantile regression techniques, the study investigates the determinants of crash risk and assesses the predictive role of downside risk for future equity returns. Findings — The results indicate that downside risk is strongly associated with a higher likelihood of extreme negative return realisations, while its effect on average returns remains limited. Quantile-based estimates further show that the impact of downside risk intensifies substantially in the lower tail of the return distribution, highlighting pronounced return asymmetries. These patterns persist across both financial and non-financial firms, although their magnitude varies with market conditions. Implications — The results carry important implications for investors, regulators, and risk managers concerned with downside protection and the identification of early warning signals in emerging equity markets. Originality — This study provides new firm-level evidence from an emerging equity market by jointly examining downside risk, crash risk, and return tail behaviour within a unified empirical framework by using quantile regression.
Purpose — This study evaluates how well parametric Value-at-Risk (VaR) and Conditional Value-at-Risk (CVaR) models measure market risk from Jamaican banks’ sovereign bond exposures. Method — We calibrate VaR and CVaR models using banks’ aggregate portfolio holdings across the entire financial system. Findings — The parametric VaR model performs reliably, passing standard statistical tests for consistency, independence, and reliability. Implications — The results suggest that these standard risk measures effectively capture Jamaican banks’ market risk exposure to foreign currency-denominated sovereign bonds, which could serve as a helpful tool for regulators to monitor market risk and financial system stability. Originality — This research applies VaR and CVaR to a novel dataset of Jamaica’s entire financial system, demonstrating how regulators can transition from the currently prescribed methods. The findings indicate that these standard risk measures effectively capture risk charges for market risk assessment, as allowed under Basel II, and align with more modern Basel-style frameworks.
Purpose — Islamic banks in Nusa Tenggara Barat (NTB) province have experienced positive developments in assets, branches, and financing. This study aims to measure the resilience of Islamic banking in NTB using a composite bank variable and to determine how effectively the institution manages and absorbs various risks. Method — The data used consisted of monthly data from 2010 to 2023, covering several banking variables, including the Financing to Deposits Ratio (FDR), Non-Performing Financing (NPF), Bank Size (BS), and Third-Party Fund (TPF). The analysis method employed in this study was the early warning system (EWS), utilising a non-parametric signal extraction approach. Findings — All selected banking variables are used to measure the resilience of Islamic banking in NTB through the composite index of bank (CIB). The signal extraction method provides optimal thresholds for each selected banking variable and for the composite index (CIB). Visualisation results show the interval values that can absorb risk and maintain the resilience of Islamic banking as follows: (1) FDR between 81% and 102%; (2) NPF between 1.29% and 1.89%; (3) BS between 3.79% and 4.59%; (4) TPF between 4.16% and 4.58%; and (5) CIB between 10.66% and 28.14%. Implications — Assessing the resilience of Islamic banking in NTB involves identifying key banking variables to pinpoint sources of risk exposure, determining the optimal time horizon for policy interventions, and setting appropriate thresholds for the surveillance mechanism. Originality — Currently, the resilience of Islamic banks at the provincial level has not been widely studied, particularly in NTB Province, where there has been a notable increase in Islamic banking offices and assets.
The underdevelopment of the green bond market in emerging markets is a thing of silent yet unventilated concern among experts and policymakers. Our study identified institutional quality as one of the fundamental determinants of financial development, and so we decided to impose these factors in a green bond situation. Thus, our study consider to examine the influences of institutional quality in explaining green bond development in twenty-one (21) emerging economies from 2010 to 2023. Due to data availability factor and nature of data, the most suitable technique is the panel Fully Modified Ordinary Least Squares (PFMOLS) estimator. The proxy for the institutional quality data is regulatory quality, voice and accountability, and rule of law as well as their PCA estimation. The main findings of the study include that comprehensive institutional qualities are more beneficial to green bond development in emerging economies than isolated institutional quality components. Also, that policy efforts in emerging economies that pursue comprehensive institutional quality will be more beneficial to green bond development in emerging economies if the detrimental influences of trade openness, exchange rate stability, savings are addressed. The study recommends for more institutional reforms in emerging economies to be associated with improvement in savings, financial development, exchange rate stability and trade openness necessary for developing the green bond market.
Purpose — This study examines the relationship between savings and economic growth, accounting for the mediating role of financial development across the selected Regional Comprehensive Economic Partnership (RCEP) countries. Methods — Using a panel data set spanning 1986 to 2022, the long-run interaction among the variables is investigated with panel cointegration methods that account for cross-sectional dependence. Moreover, the associated long-run elasticities were estimated using the augmented mean group estimation method. The causal nexus was examined for each country in the sample. Findings — In addition to the presence of a long-run relationship, the findings revealed that both thrifts and growth have a positive influence on each other in the long run. In addition, bidirectional causality tends to exist between thrifts and growth. Implication — Since the findings disclose the validity of two mainstream macroeconomic views, policymakers should rely on developing economic policies aiming at fostering thrift and economic growth, which may include support of institutional quality and financial deepening in those economies. Originality — The originality and added value of the study stem from the development of a new perspective, particularly in the examination of causal relationships. Furthermore, this is one of the primary efforts focused on the RCEP bloc, which has significant potential in terms of trade, finance, thrifts, and economic size in the contemporary world economy.
Purpose ― This paper examines the impact of major uncertainty indices and global uncertainty on the volume of Sukuk issuance in Türkiye. Method — The NARDL method is applied to determine the short- and long-term relationships between Türkiye's sukuk issuance and global uncertainty and financial stress indices, capturing both symmetric and asymmetric dimensions. Findings — Although a symmetric relationship exists between Global Economic Policy Uncertainty (GEPU) and Sukuk issuance, the Financial Stress Index (FSI) has no long-term impact on Sukuk issuance. During periods of global uncertainty, sukuk issuances increase, whereas in conditions of less uncertainty, they fall. There is an inverse relationship between Geopolitical Risk (GPR) and Sukuk issuance. Since all factors affect sukuk issuance in the short run, GEPU has the highest impact. Decreases in the GEPU index positively affect sukuk securities and increase their issuance volumes. Therefore, GPR and GEPU indices have asymmetric effects on sukuk issuances in the short and long term. Implication — Evidence suggests that sukuk is more resilient to crises than its conventional equivalents. Sukuks are strategically crucial for portfolios and provide sufficient assurance to reduce risk. Originality — No study has assessed how global financial distress and uncertainty influence Türkiye's sukuk issuance. This study differs from previous studies by focusing on sukuk issuance volumes rather than sukuk yields.
Purpose ― This study aims to evaluate the impact of Indonesia’s Non-Cash Food Assistance Program (BPNT) on household consumption and food security in Sabu Raijua, a remote region in Indonesia with limited food access. Methods ― The Propensity Score Matching (PSM) with kernel techniques is employed to estimate the BPNT program’s effects on household expenditure, caloric intake, and food insecurity using data from 536 households in Sabu Raijua, East Nusa Tenggara, Indonesia. Findings ― The results indicate that the BPNT program had a limited effect on household spending, nutrition, and food security. Beneficiary households spent slightly more on food and non-food items, showed minor improvements in nutritional intake, and were less likely to face food shortages, though concerns about food adequacy persisted. Implications ― The findings suggest that while BPNT helps alleviate food insecurity, further improvements in program implementation are needed to enhance its overall impact on household welfare. Originality ― This research provides critical insights into the effectiveness of BPNT in a remote region with unique socioeconomic challenges that have not been subject to empirical study, highlighting the challenges and opportunities for improving non-cash food assistance programs in similar contexts.
Purpose ― This paper aims to examine the extent to which monetary policy shocks (domestic and international) will affect the movement of the sectoral stock index in Malaysia. Methods ― The monetary policy shocks are identified using a structural vector autoregressive (SVAR) model to examine the propagation of both monetary policy shocks (domestic and international) on sectoral stock prices. Findings ― The main results show that foreign monetary shocks significantly affect four sectoral stock indices: industrial and services, plantation, telecommunications, and utilities. In contrast, domestic monetary shocks impact three sectoral indices: industrial and services, technology, and utilities. However, domestic monetary policy shocks have a more dominant effect on the sectoral stock market in terms of magnitude. Implication ― The analysis results provide policymakers, particularly Bank Negara Malaysia (BNM), with valuable insights into which sectors are most sensitive to monetary policy fluctuations. Additionally, the results are beneficial for investors, as the analysis can help them manage their assets more effectively by identifying which sectoral stock indices are most affected by both domestic and international monetary policy shocks, and by guiding them to make more accurate investment decisions. Originality — First, it focuses specifically on sectoral indices, examining all 13 in Malaysia through the lens of theory, with particular emphasis on impulse-response analysis, which explores the cumulative effects of both domestic and foreign monetary policy shocks on these indices. Secondly, the study employs a lagged analysis using the SVAR model, providing a theoretical framework for comparison with other relevant studies.
Purpose — This study examines the asymmetric effects of exchange rate fluctuations and petroleum pump prices on economic welfare in Nigeria. While previous research examined these shocks in isolation, this study jointly evaluates their short-run and long-run effects, thereby addressing a key gap in the literature. Methods — The study employs the Nonlinear Autoregressive Distributed Lag (NARDL) model to analyse time-series data from 1970 to 2023. Findings — Exchange rate depreciations and petroleum price increases have larger and lasting welfare losses than the short-run benefits of appreciations and price declines. In the long run, these shocks can be turned into potential welfare benefits through structural changes and redistribution of the budget. Inflation, unemployment, subsidies and international oil prices further mediate outcomes. Implications — Policymakers should strike a balance between short-term household protection and longer-term structural changes. With the complete removal of petroleum subsidies in Nigeria in May 2023, the focus should shift to special transfers, social security, and compensation to mitigate welfare losses. Exchange rate stability, fiscal discipline and diversification are equally essential for enhancing long-term welfare. Originality — This study advances understanding of welfare by concurrently examining the asymmetries of exchange rates and petroleum pump prices, thereby moving beyond the single-shock approach.
Purpose — This study explores the dynamic effect of electronic money as a non-cash payment instrument on the velocity of money in Indonesia from 2012 to 2020. Method — Using quarterly time series data from 2012 to 2020, the research employs the Error Correction Model (ECM), stationarity, cointegration, and classical assumption tests to ensure the correct estimation procedure. Findings — The findings reveal several essential points: (1) Faster circulation of cash generally increases the velocity of M1; (2) Excessive money supply slows down M1 circulation; (3) An increase in the use of debit cards (ATMs) tends to reduce M1 velocity, while quicker credit card transactions can accelerate it; (4) Rapid circulation of electronic money can expedite M1, but large amounts can hinder it. Overall, both cash and non-cash money equally influence the behavior of M1 velocity in Indonesia. Implication — The government should focus more on money velocity to maintain stability, even though various payment instruments are utilized in the economy. Originality — The current research focuses on the dynamic development of modern finance in Indonesia and electronic money as non-cash payment instruments that impact money velocity.
Purpose — This paper examines the impact of the informal economy and institutional quality on socioeconomic conditions in 35 African countries from 2000 to 2022. Methods — The study employs Driscoll-Kraay, Fully Modified Ordinary Least Squares, Method of Moments Quantile Regression, Dynamic Panel Threshold, and Dumitrescu-Hurlin (D-H) Granger non-causality techniques. Findings — The findings indicate that the informal economy significantly worsens socioeconomic conditions, whereas stronger institutional quality, evident in factors such as government stability and corruption control, enhances these outcomes. A critical institutional quality threshold of 5.282 is established, suggesting that countries with institutional quality above this level experience substantial improvements in socioeconomic conditions. Unidirectional causality from the informal economy to socioeconomic conditions and a bidirectional relationship between institutional quality and socioeconomic outcomes are also noted. Implication — Enhancing institutional quality is essential for promoting economic development and improving overall well-being in African and similar countries. Addressing institutional weaknesses could enable these countries to exceed the quality threshold and achieve better socioeconomic outcomes. Originality — This research differs from previous ones by investigating the effects of both informality and institutional quality within a threshold framework on socioeconomic situations in African countries. Furthermore, it includes a socioeconomic conditions index that combines three subcomponents: poverty, unemployment, and consumer confidence. Additionally, the study employs various measures of institutional quality to explore their differing impacts on socioeconomic conditions.
