Nexus between government debt, economic policy uncertainty, government spending, and governmental effectiveness in BRIC nations: Evidence for linear and nonlinear assessments

Abstract

Quality institutions augment economic sustainability by ensuring domestic resource optimization with equitable development principles. Therefore, ensuring this equitable development and quality institutions is required. This study assessed the effects of government debt, uncertainty of economic policies, and government spending on institutional quality, as measured by governmental effectiveness in BRIC (Brazil, Russia, India, and China) nations from1990–2020. This study applied several econometrical techniques for empirical nexus assessment, including Augmented ARDL, nonlinear Autoregressive Distributed Lagged (ARDL), and Fourier Toda-Yamamoto causality tests. This study documented long-run cointegration in both symmetry and asymmetric assessments. In the long run, both government debt and uncertain economic policies were significantly negatively associated with institutional quality, while government spending and institutional quality were positively associated. Furthermore, the results of asymmetric ARDL revealed both long- and short-run asymmetric relationships between institutional quality and government debt, EPU, and government spending. The directional causality test documented bidirectional causality between debt and institutional quality in all nations, whereas mixed causalities were detected for uncertain economic policy, institutional quality, and government spending. Regarding policy, the results of this study suggested that economic stability was indispensable for efficient institutional quality in BRIC nations.

Do environmental quality, financial inclusion, and good governance ensure the FDI sustainably in Belt and Road countries? Evidence from an application of CS-ARDL and NARDL

“…The literature suggests that FDI promotes economic development by promoting cross-border technology and knowledge transfer, resulting in more employment and enhancing the host country's skill capacity. Taking account the existing literature, two lines of research findings focusing on FDI can be found : the first group of researchers investigated the role of FDI inflows in the economy and subsequently advocated its positive link to economic growth (Azman- Saini et al, 2010;Pegkas, 2015;Saibu et al, 2022), employment generation, financial development (Alfaro et al, 2009), trade liberalization (Liargovas and Skandalis, 2012;Rehman & Sohag, 2022), industrialization (Adom and Amuakwa-Mensah, 2016;Ma and Qamruzzaman, 2022;Xia et al, 2022;Zhuo and Qamruzzaman, 2022), poverty reduction (Klein et al, 2001;Magombeyi and Odhiambo, 2017), and technological development (Liu & Wang, 2003). At the same time, another group of researchers showed the adverse effects of FDI, especially in environmental degradation through carbon emission and energy consumption escalation, typically fossil fuels.…”

Nexus between oil price and stock market development in Southeast Asian economy: Evidence from linear and nonlinear assessment

“…The growth of the stock exchanges may help to strengthen by addressing the main issue of corporate governance. The interests of managers and owners are often aligned in stock markets, which motivates supervisors to try to increase the worth of their companies [7][8][9]. Furthermore, well-developed Stock markets encourage worldwide risk-sharing, enabling global to create a portfolio that moves from lower-risk low-yield assets to higher-risk high-return assets.…”

“…Because of its significance, several increasing studies have been conducted to investigate the connections the difference between the stock market and other elements of the economic system [5,7,[19][20][21][22][23][24][25][26][27]. The study of Igwilo and Sibindi [28], see, for example, has investigated the impact of ICT adaptation on stock market development in the African economy.…”

Symmetric and asymmetric nexus between economic policy uncertainty, oil price, and renewable energy consumption in the United States, China, India, Japan, and South Korea: Does technological innovation influence?

“…Excessive application of conventional energy such as fossil fuel has tremendously challenged the environmental protection program and limited the ultimate benefits of environmental development. Oil demand, according to the statistical review of world energy ( 2021 Inferring to the importance of clean energy, that is, energy from renewable sources, has extensively investigated and positively documented critical rules in economic growth and environmental protection (Adebayo and Kirikkaleli, 2021;Dogan and Shah, 2021;Nair et al, 2021;Andriamahery and Qamruzzaman, 2022;Qamruzzaman, 2022a;Banga et al, 2022;Qamruzzaman, 2022a;Guan and Qamruzzaman, 2022;Gyimah et al, 2022;Li and Qamruzzaman, 2022;Ma and Qamruzzaman, 2022;Weixiang et al, 2022;Xia et al, 2022;Zafar et al, 2022;Zhuo and Qamruzzaman, 2022). For instance, in the study of Toumi and Toumi (2019), asymmetric causality to REC, carbon dioxide emissions (CE), and real GDP via nonlinear broadcasting between these variables via the nonlinear autoregressive distributed lag model was carried out in order to investigate the short-and long-run asymmetries.…”