Search Results (41)

This study examined the effect of free trade on intra-African bilateral trade balances for Kenya, Rwanda, Uganda, and Tanzania to assess the potential implications of the African Continental Free Trade area. The four countries have experienced persistent trade deficits. Whether free trade within Africa can improve the national trade balances, and the drivers of bilateral trade balances are important questions for policy and strategic programmes for the countries to make the most gains from free trade area. The econometric model estimated for each country is an extension of the standard Keynesian model of trade balance to include determinants of bilateral trade flows from the gravity model. Quantitative analysis using panel regression was augmented with qualitative data from interviews with trade policy experts and trade officials from various African countries and focus group discussions with small-scale cross-border traders at the Busia and Namanga border posts in East Africa. Findings show that complete tariff elimination on intra–African trade may not impact the bilateral trade balances of Kenya, Rwanda, and Tanzania but could improve bilateral trade balances for Uganda by 6 percent. Within the free trade areas, Uganda’s bilateral trade balances were higher within the Common Market for Eastern and Southern Africa but lower within the East African Community, than outside these areas. Kenya’s trade balances were lower in the Common Market for Eastern and Southern Africa, than otherwise. On the contrary, no significant difference in trade balances is established for the membership of Kenya, Rwanda, and Tanzania in the East African Community; Rwanda in the Common Market for Eastern and Southern Africa; and Tanzania in the Southern African Development Community, when compared to trade balances with non-members. The importance of macroeconomic factors is demonstrated by the increase in bilateral trade balances with higher relative price levels of trade partners; the reduction with increase in relative production and expenditure capacities of trade partners; and improvements following a depreciation of home currency for Tanzania and Uganda, yet a worsening of trade balances in Kenya. A lack of harmony in documents required for cross-border movements within the free trade areas is reported as counterproductive. All African countries should therefore fully implement protocols and cooperate in the harmonization of trade procedures for the free movement of people and goods across borders. Country policies and trade programmes should pursue increased productivity in the leading intra-African export sectors and diversify exports via foreign direct investment in strategic sectors to substitute imports from outside Africa; reduce costs of production; increase the quality of products; and improve transport infrastructure. Full article

Volatility estimation and quantile regression are relevant active research areas in statistics, machine learning and econometrics. In this work, we propose two procedures to estimate the local variances in generic regression problems by using kernel smoothers. The proposed schemes can be applied in multidimensional scenarios (not just for time series analysis) and easily in a multi-output framework as well. Moreover, they enable the possibility of providing uncertainty estimation using a generic kernel smoother technique. Several numerical experiments show the benefits of the proposed methods, even compared with the benchmark techniques. One of these experiments involves a real dataset analysis. Full article

This paper conducts a brief survey of spatial unit roots within the context of spatial econometrics. We summarize important concepts and assumptions in this area and study the parameter space of the spatial autoregressive coefficient, which leads to the idea of spatial unit roots. Like the case in time series, the spatial unit roots lead to spurious regression because the system cannot achieve equilibrium. This phenomenon undermines the power of the usual Ordinary Least Squares (OLS) method, so various estimation methods such as Quasi-maximum Likelihood Estimate (QMLE), Two Stage Least Squares (2SLS), and Generalized Spatial Two Stage Least Squares (GS2SLS) are explored. This paper considers the assumptions needed to guarantee the identification and asymptotic properties of these methods. Because of the potential damage of spatial unit roots, we study some test procedures to detect them. Lastly, we offer insights into how to relax the compactness assumption to avoid spatial unit roots, as well as the relationship between spatial unit roots and other models, such as the Spatial Dynamic Panel Data (SDPD) model and Lévy–Brownian motion. Full article

The EU energy sector became a very important one as a result of the war in Ukraine. On the other hand, the EU started in defining and implementing new strategies regarding green economy and sustainability. Even though these strategies cover short and medium periods, they have as a main goal the decrease in the EU’s dependence of energy imports. This research is focused on present challenges, risks, and uncertainties related to energy production and consumption in all EU member states. In order to achieve the research objectives, a huge statistical database, which covered 2012–2021, was used. The analysis is based on specific indicators regarding primary energy production; imports and exports; gross available energy; final energy consumption; non-energy consumption; energy dependency; and energy intensity. There are at least three research procedures used in this paper: a meta-analysis, a statistical analysis, and an econometric analysis, as well. Finally, the analysis points out the disparities between member states regarding energetic resources and energy dependency using a new model for quantifying risk factors in the European energy system. Moreover, new public policies are proposed by the authors under a cluster approach of the EU’s regions. Full article

On the capital market, price movements of stock corporations can be observed independent of overall market developments as a result of company-specific news, which suggests the occurrence of a sudden risk event. In recent years, numerous concepts from statistical physics have been transferred to econometrics to model these effects and other issues, e.g., in socioeconomics. Like other studies, we extend the approaches based on the “buy” and “sell” positions of agents (investors’ stance) with a third “hold” position. We develop the corresponding theory within the framework of the microcanonical and canonical ensembles for an ideal agent system and apply it to a capital market example. We thereby design a procedure to estimate the required model parameters from time series on the capital market. The aim is the appropriate modeling and the one-step-ahead assessment of the effect of a sudden risk event. From a one-step-ahead performance comparison with selected benchmark approaches, we infer that the model is well-specified and the model parameters are well determined. Full article

Energy is the key driver of economic growth; however, the economic leadership position of G7 countries and the rising global manufacturing hub status of the ASEAN-5 countries have yet to achieve the Sustainable Development Goals. Thus, this paper aims to examine the effects of real GDP per capita, urban population, the number of individuals using the internet, carbon dioxide emissions, total trade and net foreign direct investment (FDI) inflows on the renewable energy consumption (REC) of G7 and ASEAN-5 countries from 1990 to 2021 yearly data. Using Studenmund’s and Gujarati and Porter’s procedures of the panel data model, the panel fixed-effect econometric modelling held the best outcome for both G7’s and ASEAN-5 countries’ REC models. Based on the findings, urban population highly and positively affects REC in G7 countries. However, there is also a positive and strong relationship between net FDI inflows and REC in ASEAN-5 countries. The empirical findings prove the importance of macroeconomic, socioeconomic and environmental variables for the outcomes of REC policies across both developed and developing countries. Full article

At the turn of the 21st century, the wide availability of high-frequency data aroused an increasing demand for better modeling and statistical inference. A challenging problem in statistics and econometrics is the estimation problem of the integrated volatility matrix based on high-frequency data. The existing estimators work well for diffusion processes with micro-structural noise and may get worse when jumps are considered. This paper proposes a novel estimation in the presence of jumps, micro-structural noise, and asynchronization. First, we adopt sub-sampling to synchronize the high-frequency data. Then, we use a two-time scale to realize co-volatility to handle noise. Finally, we employ the threshold parameters to remove the effect of jumps and sparsity in two steps. Both the minimax bound and the convergence rate are discussed in the paper. The estimation procedures of the heavy-tailed data will be solved in the future. Full article

The aim of this research is to analyze, from a macro-economic perspective, the dynamic relationship between higher education and the unemployment rate in Romania. After the political changes at the end of 1989, in Romania the number of individuals enrolled in universities and the number of highly educated graduates increased substantially. Through the research carried out in this article, we analyze whether this explosion of highly educated individuals is sustainable and is a factor in the evolution of the unemployment rate, specifically, whether higher education causes a short and/or a long-run decrease or increase of the unemployment rate, or whether the variables are independent. The autoregressive distributed lag (ARDL) model, the augmented Dickey-Fuller (ADF) procedure, and other econometric techniques specific to the dynamic analysis of time series were used as methodological approaches. The results prove that, at the macro-economic level, higher education and unemployment rate are not co-integrated in the long-run. However, for the analyzed period, there was a significant but modest short-run positive effect of higher education on unemployment rate. Our study emphasizes the importance, for a balanced and sustainable labor market, of correlating the number of individuals enrolled in higher education institutions with the needs of employers. We underline that a non-sustainable increase in the number of highly educated graduates may become a cause of the increase of unemployment and permanent migration of highly educated individuals. The obtained results can be useful for policy makers and can contribute to the development of effective strategies focused on higher education. Full article

The effective control of air pollution to advance human health and improve well-being has risen to the forefront of discussion in recent years. Based on China’s 2019 environmental protection tax data and China Social Survey (CSS) data, this paper studies the effects of subjective air pollution and the environmental protection tax on residents’ well-being using an econometric mediation effect model. The research conclusions are as follows: (1) Subjective air pollution can significantly reduce residents’ well-being, (2) an environmental protection tax can significantly improve residents’ well-being and it can eliminate some of the negative influence of subjective air pollution on residents’ well-being, and (3) the grouping test of residents’ income, regional distribution, urban and rural structure, age structure, gender structure, and other variables shows that the effects of subjective air pollution on residents’ well-being are heterogeneous among different populations. After further endogeneity testing with the instrumental variables method, adjusting the primary variables, and altering the research procedures, the results are still robust. Based on these findings, we should vigorously promote the development of ecological civilization and good air quality and support reforming the environmental protection tax system to enhance well-being. It is also necessary to shift from a crude development model to a green industry and business model. While emphasizing social equity and production efficiency, we should ensure the synchronous development of cities and villages. Additionally, tangible steps should be implemented to raise people’s incomes, expand young people’s work options, and enhance their satisfaction. The article focuses on the impact of subjective air pollution on residents’ well-being, adding air pollution to the factors affecting well-being. Furthermore, the article finds that the environmental protection tax has two advantages: it can govern air pollution and promote green development, and, at the same time, it can enhance social harmony and improve residents’ well-being. Full article

This study examines the impactful role played by trade facilitation (TF) in promoting or hindering food security in a panel of 34 sub-Saharan countries for the period 2005–2019. The empirical evidence is based on the Two-Step Dynamic System Generalized Method of Moments estimator, employed to account for econometric concerns bothering on unobserved heterogeneity and potential endogeneity inherent in the variables used. The empirical findings show that the nature of TF procedures, which are inefficient, negatively impact food security in SSA. These effects are evident on the availability and accessibility dimensions of food security as well as their composite index. While it is noted that this result runs counter to the established a priori of positive signs on the one hand, it however portrays the reality of the economic phenomenon in SSA on the other/hand. In balance, the present TF regime can best be described as anti-food security as suggested by the prevailing burdensome procedures involved in exporting and importing staple food items. The functional roles of population growth and institutional quality are empirically enhanced divergently. Going forward, we recommend that for food sufficiency and Sustainable Development Goals to be achieved quickly, governments within the region would need to finetune the underlying modalities of the present TF regime Full article

Teleworking is known as a way of the future that enhances economic growth as an accumulation of physical as well as human capital. Using digitalization that increase the procedures and services efficiency and reduce the repetitive work of employers by using technology, teleworking improves firm performance by enhancing efficiency, motivation, and knowledge creation. This paper aims to analyze the influence of teleworking, based on its characteristics and determinants under the influence of financial and pandemic crises, on economic growth as measured by GDP growth; this was performed using econometric models from the literature and fuzzy logic. The econometric analysis included a two-step approach regarding the years 2008–2020 (including COVID-19 pandemic period) for the 27 member states of the EU. The research results suggest that access to the Internet, employment ratio, and average wage significantly influenced the teleworking ratio of the employees. Furthermore, the access to the Internet made a significant difference in using teleworking, given the infrastructure that was already created in the first COVID-19 pandemic wave. Employees took advantage of it and continued, at a lower scale, to maintain social distancing, although the measures taken in the second wave were not perceived to be as tough as in the first one. Full article

Objective: The study aimed at analyzing the relationship between anthropometric characteristics, lifestyle, and dietary habits, as well as the burden of the pandemic on the health-related quality of life among Greek pupils. Research methods and procedures: On the whole, 2088 adolescents aged 12–18 years from Attica, Greece, were enlisted in this school-based cross-sectional study that took place in May–December 2021. Health-related quality of life was estimated through the KIDSCREEN-27 questionnaire, adherence to the Mediterranean diet—through the KIDMED test. For the empirical and econometric analyses, the Mann–Whitney U and Kruskal–Wallis means comparison tests were utilized; multiple linear regression was used accordingly. Results: The present study provides evidence to the fact that boys, younger adolescents, adolescents living with both parents and with highly educated mothers had a better health-related quality of life. Concerning their eating practices, positive predictors were consuming a better-quality breakfast, having all five meals daily, consuming lunch and dinner with parents, and higher adherence to the Mediterranean diet. Moreover, sufficient night sleep time, fewer hours spent on screen viewing, more frequent walks, and having hobbies were linked to the health-related quality of life with a positive sign. In contrast, negative predictors were higher body mass index and everyday life difficulties due to the COVID-19 pandemic crisis. Conclusions: Greek adolescents’ anthropometric characteristics, BMI, lifestyle and sedentary habits, eating habits, and adherence to the Mediterranean diet were significantly related to their perceived health-related quality of life during the pandemic. Full article

With the growing environmental pollution and adverse climatic conditions, it is now a globally vibrant topic whether housing prices should be associated with the quality of the environment in a particular region. From the microeconomic approach to environmental economics, it is proposed that property prices in any region should be associated with the environmental quality-the concept of hedonic pricing. A negative association between low magnitudes of pollution and high house prices is a precondition to achieving the aim of sustainable development. The study thus starts with the objective of investigating whether there are long-term relations and short-term dynamics between the magnitudes of pollution and house price in the panel of the world’s high-polluting and low-polluting cities for the period of 2012–2021 across 30 cities. Using appropriate time-series econometric procedures such as panel cointegration, panel VECM, and the Wald Test, the study arrives at the conclusion that magnitudes of pollution and house prices in the cities are cointegrated with a stable long-term relationship in all panels. Further, there are strong causal interplays in both the long- and short-term between pollution and house prices in most of the panels of the cities. Thus, policy makers should consider making proper valuations of environmental services to control pollution at the city levels first and then at global levels to reach the proposed goal of sustainable development. Full article

Problem: The leverage effect plays an important role in finance. However, the statistical test for the presence of the leverage effect is still lacking study. Approach: In this paper, by using high frequency data, we propose a novel procedure to test if the driving Brownian motion of an It$\widehat{\mathrm{o}}$ semi-martingale is correlated to its volatility (referred to as the leverage effect in financial econometrics) over a long time period. The asymptotic setting is based on observations within a long time interval with the mesh of the observation grid shrinking to zero. We construct a test statistic via forming a sequence of Studentized statistics whose distributions are asymptotically normal over blocks of a fixed time span, and then collect the sequence based on the whole data set of a long time span. Result: The asymptotic behaviour of the Studentized statistics was obtained from the cubic variation of the underlying semi-martingale and the asymptotic distribution of the proposed test statistic under the null hypothesis that the leverage effect is absent was established, and we also show that the test has an asymptotic power of one against the alternative hypothesis that the leverage effect is present. Implications: We conducted extensive simulation studies to assess the finite sample performance of the test statistics, and the results show a satisfactory performance for the test. Finally, we implemented the proposed test procedure to a dataset of the SP500 index. We see that the null hypothesis of the absence of the leverage effect is rejected for most of the time period. Therefore, this provides a strong evidence that the leverage effect is a necessary ingredient in modelling high-frequency data. Full article

This study analyzed the relationship between energy trilemma (ET) and economic growth in 109 countries between 2000 and 2020 across income levels and regions. This study constructed an extended Cobb-Douglas production function including three elements of ET such as energy security, energy equity, and environmental sustainability as their effects on economic growth differ by income level and region. The methodology of this study differs from that of previous studies, which utilized the representative value of ET based on principal component analysis. To analyze the panel series, this study utilized econometric procedures, panel regression of pooled ordinary least squares (OLS), feasible generalized least squares (FGLS), fixed effects, and dynamic panel analysis of generalized methods of moments (GMM) by three income levels. In addition, this study undertook a time series analysis between ET and economic growth for each country. The results showed that each element of ET is not balanced. Moreover, each element can contribute differently to economic growth due to differences in income levels and regions. This study suggested that a balanced environmental policy reflecting various aspects of ET is required and can contribute to the economic growth. Full article