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This study aims to examine the linear and nonlinear remittance–institutional quality link in developing countries.

This study investigates the nonlinear relationship between remittance and political institutional quality in a panel of 97 developing countries using annual data of over nine years from 2009 to 2017. The estimated model uses system generalized method of moments for three political institutions indicators, namely, democracy, political stability and civil liberties.

The results revealed that remittance has a significant inverted U-shape impact on political institution’s indicators. Therefore, before the turning point, remittance is associated with high level of democracy, more stable political system and more civil freedom. While moving after the turning point indicates low level of political institution in the country.

The authors certify that this is the original paper. It has not been previously published and is not currently under submission or in press elsewhere.

This study aims to investigate the contingent roles real effective exchange rates (REERs) play in mediating the effects of oil revenue on the agriculture sector value-added in 25 major and minor oil-exporting (MIOEC) countries during the period of 1975–2014.

The panel autoregressive distributed lag (ARDL) estimator proposed by Pesaran et al. (1999) was relied upon to achieve the objectives of the study. This estimator involves a pool of small cross-sectional units over a long-time span that covers for 25 oil-exporting countries over 39 years (1975–2014).

This paper reveals the following findings. Firstly, oil revenue has a direct negative effect on agricultural value-added in the short- and long-term. This finding holds for full sample and subsamples of major oil-exporting (MAOEC) and MIOEC countries. Further assessment reveals that the magnitude of the impact is larger for MAOEC than that of the MIOEC. Secondly, the finding for the long-run effect shows that the contingent effect of real exchange rate on the nexus between oil revenue and agricultural value-added is negative and statistically significant at the conventional level for the full sample. This suggests that, in the long-run, the appreciation in real exchange rates exacerbate the negative marginal effects of oil revenue on agricultural value-added in all oil-exporting countries. However, when sub-samples of MAOEC and MIOEC are considered, the contingent effect disappeared (become insignificant) in MAOEC while it is positive and statistically significant in MIOEC. Thus, in the long-run, the appreciation in real exchange rates diminishes the negative marginal effects of oil revenue on agricultural value-added in MIOEC. While oil revenue has a direct negative effect, its effect is also moderated by the variations in REERs in MIOEC in the long-run. Finally, in the short-run, fluctuations in the real exchange rate do not matter for the nexus of oil revenue and agriculture sector in these countries whether minor or MAOEC countries.

This study contributes to the debate in the empirical literature on the Dutch disease effect and “oil curse”. Using the appropriate panel ARDL empirical framework, it provides evidence on how exchange rate variations in the oil-exporting countries influence the nature of the effects of the oil revenue on agricultural sectors in the long-run but not in the short-run. Contingent effects of REERs only appear to exist in MIOEC in the long-run.

The purpose of the paper is to examine the impact of exchange rate misalignment on economic growth in India using annual data from 1980 to 2014.

First, misalignment is measured, which is defined as the deviations of the actual real exchange rate (RER) from its equilibrium level. The equilibrium real exchange rate (ERER) is estimated using the auto-regressive distributed lag (ARDL) model by considering key macroeconomic fundamentals of the determinants of RER. Zivot and Andrews’ unit root with structural break is used to test the stationarity property of data. The impact of exchange rate misalignment on economic growth has been examined using ARDL and variance decomposition techniques.

Our results find an overvaluation of the exchange rate till 2000, and thereafter, an undervaluation of the exchange rate prevails in India. Further, the result indicates that an increase in exchange rate misalignment leads to a decrease in economic growth and vice versa. Moreover, a positive misalignment (overvaluation) hurts the economic growth and a negative misalignment (undervaluation) promotes the economic growth.

From the policy perspective, the results highlight that India needs to maintain an appropriate exchange rate which can reduce the RER misalignment. It is better for the Reserve Bank of India (RBI)’s intervention to smoothen the fluctuations of the exchange rate to avoid the inefficiency in the allocation of resources. However, to minimize the RER misalignment, the intervention should be conducted only in the short run.

The study contributes to the existing literature by estimating the exchange rate misalignment for India and its impact on economic growth.

The purpose of this study is to provide empirical evidence on the impact of deviations from the long-run sustainable real exchange rate (RER) equilibrium on real economic growth rate applying panel autoregressive distributed lag model (ARDL) (Pooled Mean Group, Mean Group and Dynamic Fixed Effects estimators) in a dynamic heterogeneous panel setting and panel NARDL for the largest database covering 104 countries during 1995–2022 period developed by Couharde et al. (2017).

The EQCHANGE database makes available not only the equilibrium RER but also misalignments according to the Behavioral Equilibrium Exchange Rate approach for each country. One of the main objectives is to examine whether undervaluation or overvaluation RER can imply different responses on economic performance trying to differentiate between short and long run effects. Additionally, the authors consider the World Bank (WB)’s income classifications to compare the asymmetries attending to high-income, upper-middle-income, lower-middle-income and low-income levels.

Applying the panel ARDL technique, the results suggest that the RER misalignments have a negative but not significant effect on the short-run, nevertheless a negative and highly significant impact on real economic growth rate is detected on the long-run. Considering the panel NARDL, the asymmetric relationship between RER misalignment and economic growth rate is supported considering all countries in the long-run (in the short-term is not significant). In the long run is detected that undervaluation can promote economic growth rate, rather than overvaluation which can harm the economic performance. Additionally, the WB and the International Monetary Fund (IMF) income’s classifications have been applied and the long-run symmetry test is strongly rejected regardless of income group.

To the best of the author knowledge, this is the first time the non-linear panel ARDL methodology has been applied for analyzing the impact of deviations from the long-run sustainable RER equilibrium on real economic growth. This allows us to see the asymmetric effect not seen before. The panel ARDL estimation can efficiently performed regardless of the integration level of the variables, additionally, it is consistent even in the presence of endogeneity. Besides, another advantage of this method is that it is possible to reflect not only the short but also the long-run dynamics. Moreover, this analysis offers a comparison between linear panel ARDL and non-linear to compare the advantages from the former. Additionally, this study covers the largest database, in particular, 104 countries during the 1995–2022 period implemented with the Couharde et al. (2017) EQCHANGE database. Finally, it is compared the asymmetries attending to different income classifications.

This study aims to examine the asymmetric S-curve between the trade balances of Pakistan and China at the commodity level using disaggregated data.

This study focuses on Pakistan and China bilateral trade based on commodity-level data. This study delves into the S-curve phenomena by examining time series data from 1980 to 2023 across 32 three-digit industries/commodities.

The findings show significant evidence in favor of the “asymmetric S-curve” in 27 out of the 32 industries studied. This study confirms that the devaluation of home currency is not a viable solution always to improve trade balance.

This study considers 32 three-digit industries limiting the generalizability of findings. Due to data unavailability, the authors fail to consider other industries. In the absence of quarterly data on industry-level trade between Pakistan and China, annual data from 1980 to 2023 were used in generating the cross-correlation functions. Previous literature frequently resorted to the general consumer price index with its inherent aggregation issues, whereas this study has opted for commodity price indices to overcome the shortcomings in the estimation of S-curves at the commodity level.

The findings have practical relevance in guiding policy decisions regarding commodity trade, whereas the industry-wise analysis enriches the understanding of the short-term effects of currency depreciation on trade balance dynamics.

The S-curve hypothesis predicts a negative cross-correlation between a country's current exchange rate and its past trade balance and a positive cross-correlation between the current exchange rate and its future trade balance. Previous empirical S-curve studies had the limitation of assuming symmetry in cross-correlation with both current and future trade balance values.

This study examines the moderating role institutional quality plays in shadow economy–environmental pollution nexus in Nigeria between 1984 and 2018. Further, the study also determines the threshold level of institutional quality that lessens shadow economy and abates environmental pollution.

Shadow economy is measured as a percentage of gross domestic product (GDP) using the currency demand approach while environmental pollution is proxy by carbon dioxide (CO₂) per capita. Autoregressive distributed lag (ARDL) is used as the estimation technique.

Results from the study show that shadow economy has a positive and significant effect on environmental pollution both in the short and long run, while institutional quality has a negative effect on environmental pollution. This reveals that shadow economy worsens environmental quality while institutional quality abates environmental pollution. The interactive term of shadow economy with institutional quality has a negative but insignificant effect on environmental pollution in the long run. It implies that institutional quality is weak to bring about significant reduction in shadow economy and environmental pollution. Further, the threshold level of institutional quality required to lessen the effect of shadow economy and abate environmental pollution is found to be 5.69 on an ordinal scale of 0–10.

Institutional quality in Nigeria is weak and needs to be strengthened up to the threshold level in order to effectively moderate the impact of shadow economy on environmental pollution.

The study addresses the perceived gap in the empirical literature on the emerging role of strong institution in abating environmental pollution in Nigeria. It also develops a threshold level of institutional quality capable of mediating the negative impact of shadow economy on environmental pollution. This empirical contribution is largely missing in the context of Nigeria.

This study examines the moderating effect of institutional quality on the finance-growth nexus in South Africa from 1986 to 2015.

This study adopts unit root tests, cointegration test and autoregressive distributed lag (ARDL) model.

The findings reveal that institutional quality constitutes a drain to the growth benefits of financial development (FD) in South Africa in the short-run while FD and institutional quality converge to enhance growth process of the country in the long-run. Also, the threshold of institutional quality beyond which institution stimulates strong positive impact of finance on growth is estimated to be 6.42 on a 10-point scale.

This study, therefore, suggests that institutional quality matters in the way FD influences economic growth in South Africa. Hence, stakeholders are encouraged to trace and block lapses and loopholes in the institutional framework guiding financial system in South Africa so as to maximize growth benefits of FD.

This study contributes to the extant studies by introducing a country-specific analysis into the empirical examination of how institutional quality influences the impact of FD on economic growth. Also, this study deviates from other studies by determining the threshold of institutional quality beyond which FD stimulates strong positive effect on economic growth in South Africa

This study aims to attempt to investigate the time-varying causality and price spillover effects between crude oil and exchange rate markets in G7 economies during the COVID-19 and Russia–Ukraine crises.

This study uses time-varying Granger causality test and spillover index.

This study finds a time-varying causality between exchange rate returns and oil prices, implying that crude oil prices have the predictive power of the foreign exchange rate markets in G7 economies in their domain. Furthermore, the total spillover index is estimated to fall significantly around COVID-19 and war events. However, this index is relatively high – more than 57% during the first wave of COVID-19 and decreasing slightly during the Russia–Ukraine conflict.

This outcome supports the hypothesis that the majority of the time-varying interaction between exchange rates and oil prices takes place in the short term. As a result, the time-varying characteristics provide straightforward insight for investors and policymakers to fully understand the intercorrelation between oil prices and the G7 exchange rate markets.

First, this study has reexamined the oil–exchange rate nexus to highlight new evidence using novel time-varying Granger causality model recently proposed by Shi et al. (2018) and the spillover index proposed by Diebold and Yilmaz (2012). These approaches allow the author to improve understanding of time-varying causal associations and return transmission between exchange rates and oil prices. Second, compared to past papers, this paper has used data from December 31, 2019, to October 31, 2022, to offer a fresh and accurate structure between the markets, which indicates the unique experience of the COVID-19 outbreak and Russia–Ukraine war episodes. Third, this study analyzes a data set of seven advanced economies (G7) exhibiting significant variations in their economic situations and responding to global stress times.

This paper examines the long-run and dynamic causal relationship among air pollution, health expenditure and economic growth in Mexico, Indonesia, Nigeria and Turkey (MINT countries).

The bounds test approach to cointegration and causality test was employed on data covering 1995–2018.

The study shows evidence of a long-run relationship among the variables in MINT countries and the causality test confirms the existence of a bidirectional causal nexus between health expenditure and economic growth in the four countries. It also confirms that there is a bidirectional causal relationship between carbon dioxide (CO₂) emission and economic growth, except in Nigeria where a unidirectional causal relationship was found running from CO₂ emissions to economic growth. In addition, a bidirectional causal relationship was found between air pollution and health expenditure in Turkey, while no causal relationship was found among these variables in Nigeria.

This study is limited by available data and it only focuses on four emerging economies. To address this, future studies can expand this scope to more emerging economies with severe air pollution and also extend the scope when more recent data becomes available.

This study suggests that pollution standards in MINT countries should be monitored and enforced with transparency so as to mitigate its health implications and ensure the sustainability of economic growth.

The study confirms the importance of keeping air pollution as low as possible because of its negative effect on health and economic output.

The study accounts for the complexity of each MINT country instead of providing a general discussion on the relationship between air pollution, health expenditure and economic growth in MINT countries.

This study aims to inspect the impact of US climate policy uncertainty (CPU) on the economic growth of Asian countries with the moderating role of crude oil price (COP) changes.

The Im-Pesaran Sin and Fisher-type tests are used for stationarity check, while Kao and Pedroni tests are used for cointegration analysis. The Hausman test is applied for model selection, where pooled mean group autoregressive distributed lag (PMG/ARDL) has been selected and applied. Besides, the fully modified ordinary least squares is also used for robustness analysis. Additionally, the literature review and descriptive statistics have been used.

The main findings disclosed that US CPU negatively impacted the economic growth of Asian economies with high significance in the long run whereas insignificant in the short run. The results further concluded that COP positively affected economic growth both in the short and long run. Furthermore, the results also revealed that COP significantly and positively moderates the relationship between CPU and COP in the long and short run.

The study is the first of its kind to examine the impact of the US CPU on the economic growth of Asian economies. Second, it further revealed the moderating role of COP between US CPU and economic growth. Third, a large panel of data from Asian countries has been considered. Fourth, the study adds to the current literature by using the PMG/ARDL model to determine the impact of US CPU on economic growth. Additionally, this study focuses on the US CPU because it is a developed country playing a significant role in energy and climate issues, and has been very uncertain.