Parviz Dabir-Alai, Mak Arvin and Rudra P. Pradhan
The authors investigate the role played by the political climate and other covariates on the prevalence of undernourishment for 34 low-income countries across a 21-year period.
Abstract
Purpose
The authors investigate the role played by the political climate and other covariates on the prevalence of undernourishment for 34 low-income countries across a 21-year period.
Design/methodology/approach
Political climate is measured in terms of political freedoms and civil liberties. The authors follow a Granger causality approach, which looks at predictive causality (i.e. causality in a temporal sense). For the socio-economic data, the authors rely on annual time series data from the World Bank.
Findings
Most of the findings are in keeping with our expectations: (1) Lowering women's fertility rate lowers undernourishment; (2) undernourishment converges to its long-run equilibrium path in response to changes in income, political climate, health expenditure, fertility rate and drinking water access; (3) the effect of an instantaneous shock from income, changes to the political climate, health expenditure, fertility rate and drinking water access on undernourishment are completely adjusted in the long run. One surprising result is that there is a positive and significant relationship between the prevalence of undernourishment and political freedom. The authors offer several possible explanations for this unexpected result.
Practical implications
Given our results, careful attention to the co-curation of policies is desirable. As an example, the authors would advocate a more proactive role by the richer countries in terms of their commitments to foreign aid in addressing the identified problems.
Originality/value
The authors use advanced panel data techniques, considering a long span of time. Unlike other studies which aim to establish correlations, the authors test for Granger causality.
Details
Keywords
The aim of this paper is to evaluate empirically the impact of oil price fluctuations on the relationship between banking sector development and economic growth in oil-importing…
Abstract
Purpose
The aim of this paper is to evaluate empirically the impact of oil price fluctuations on the relationship between banking sector development and economic growth in oil-importing MENA countries.
Design/methodology/approach
The study used the newly developed panel autoregressive distributed lagged (ARDL) approach in order to address any potential endogeneity between research variables.
Findings
The empirical results show a unidirectional causality in the long run from oil price to both economic growth and banking sector development for oil-importing countries. Also, banking sector development not only leads directly to economic growth but also can play a moderator role in the oil price—economic growth nexus.
Research limitations/implications
The study has two principal limitations. On the one hand, this study was conducted in a relatively limited sample of countries. On the other hand, the study did not consider others indicators for banking sector development and others macroeconomic variables.
Practical implications
The results found have imperative implications for banks' managers, regulators and researchers. Bank managers should be more concerned with the negative repercussions of oil price fluctuations on the development of their banks. The regulatory authorities must emphasize policies and strategies to further strengthen their banking sector in order to alleviate the negative influence of oil price shocks on economic growth. Researchers focused on finance-growth nexus must take into account the potential influence of oil price shocks.
Originality/value
The developed conceptual model allows examining to what extent the oil price fluctuations might affect the relationship between economic growth and banking sector development. This effect is neither evaluated nor clarified in the relevant literature.