Nexus between uncertainty, remittances, and households consumption: Evidence from dynamic SUR application

Abstract

Household consumption induces aggregated economic activities by pushing market demand, capital accumulation and financial growth in the economy; on the other hand, instability in household consumption adversely affects the overall economic progress. Thus, exploring the key determinants responsible for household consumption instability is essential. The motivation of the study is to gauge the role of pandemic uncertainties and remittance inflow on household consumption in lower, Lower-middle, and Upper-Middle-income Countries for the period 1996 to 2020. The study employed several econometrical tools, including a panel cointegration test with the error correction term, dynamic SUR. The panel unit root test following CADF and CIPS documented variables are stationary after the first difference, and long-run associations are confirmed with the panel cointegration test. The coefficient of Dynamic Seemingly Unrelated Regression exposed pandemic uncertainties and has a negative impact on household consumption in all three-panel estimations; however, the coefficient of PUI is more prominent with COVID-19 effects. Remittances’ role in household consumption was positive and statistically significant, suggesting migrant remittances encourage additional consumption among households. On the policy aspect, the study proposed that the government should undertake macro policies to manage policy uncertainties so that the normal course of consumption level should not be interrupted because household consumption volatility creates discomfort in aggregated development. Moreover, efficient reallocation and remittance channels should be ensured in the economy; therefore, efficient institutional development has to be confirmed.

Nexus between financial development, foreign direct investment, and renewable energy consumption: Evidence from SSA

“…The study's results suggest a strong association between foreign direct investment (FDI) and the usage of renewable energy (REC). Our study aligns with the literature (12)(13)(14)(15)(82)(83)(84)(85)(86). Initially, the research discovered a negative correlation, indicating that more foreign direct investment (FDI) might hinder the acceptance and use of renewable energy sources.…”

“…This finding is consistent with an "inverted U-curve" or "Kuznets curve," which proposes that economic development may initially lead to environmental damage. However, eventually, it can facilitate environmental improvements, such as the increased adoption of renewable energy technologies (29,83,85,(90)(91)(92)(93)(94). A U-shaped connection emphasizes the need to assess the timing and magnitude of foreign direct investment (FDI) inflows in relation to promoting renewable energy use.…”

Does financial innovation foster financial inclusion in Arab world? examining the nexus between financial innovation, FDI, remittances, trade openness, and gross capital formation

“…FDI inflows contribute to the economy in diversified ways; however, the financial sector's impact is more evident since foreign investors prefer to reallocate capital to those economies with higher efficiency and lower cost [135]. FDI in the financial sector, especially in the banking sector, allows foreign participants in the baking industry and their presence to play catalyst roles and establish financial stability [136][137][138][139][140].…”

Urbanization, trade openness, and industrialization as a determent of clean energy consumption: Evidence from BRI nations

“…This is due to the growth of energy-intensive companies and the rising demand for energy-intensive services in urban areas [1]. Urbanization may facilitate the adoption of clean energy consumption as urban planners and policymakers prioritize sustainable urban development and integrate renewable energy sources to mitigate the adverse impacts of urbanization on energy consumption [95][96][97][98][99][100][101][102][103].…”