The long‐run relationship between ODA, growth and governance: An application of FMOLS and DOLS approaches

Yahyaoui, Ismahene; Bouchoucha, Najeh

doi:10.1111/1467-8268.12489

Cited by 34 publications

(16 citation statements)

References 56 publications

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“…Therefore, the implication of the FMOLS model can give the best regression outputs because it has the capacity to treat the problem of stationarity. Additionally, this econometric technique has been repeatedly used in past studies arranged on the same theme and facing a similar econometric issue in their estimation (Liu et al, 2019; Olofin et al, 2019; Yahyaoui and Bouchoucha, 2021).…”

Section: Resultsmentioning

confidence: 99%

“…Foreign aid allows the modern technologies to be adopted and assists the tax department to enhance its operational efficiency (Sobis and Vries, 2009). There exists a lot of evidence showing the effectiveness of foreign aid in promoting economic growth and raising the living standards of local communities through proper utilization of financial aid (Adedokun, 2017; Paxton and Knack, 2012; Yahyaoui and Bouchoucha, 2021). However, there exists certain consensus indicating the adverse effects of foreign aid in the shape of bad governance situations and high corruption (Asongu, 2012).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Additionally, this econometric technique has been repeatedly used in past studies arranged on the same theme and facing a similar econometric issue in their estimation (Liu et al, 2019;Olofin et al, 2019;Yahyaoui and Bouchoucha, 2021).…”

Section: Regression Estimationmentioning

confidence: 99%

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Governance and tax revenue: does foreign aid matter?

Wen

Farooq

Tabash

et al. 2021

International Review of Administrative Sciences

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This study seeks to explores the relationship among governance, foreign aid, and tax revenue. A common notion on governance is that it is a multifaceted factor, it may affect from other factor that is foreign aid. Foreign aid can hamper the governance situation and thus can reduce tax collection. To test these theoretical assumptions, we collected the numerical data from Asian economies for the years 2001–2019 and employed the panel FMOLS (fully modified ordinary least square) test to estimate the regression. The empirical findings first reveal that governance and foreign aid have a positive association with tax revenue in the long run. However, a negative trend in tax collection was observed following the interaction of foreign aid and governance. Foreign aid deteriorates the governance situation, which has a negative spillover impact on tax revenue. Our empirical analysis suggests that policy officials should focus on exercising governance and foreign aid effectiveness to meet the objective of more tax collection. Points for practitioners Policy officials should focus on better governance exercises. They should carefully decide on the volume of foreign aid receipts. However, if it becomes necessary to receive foreign aid, then they should focus on aid effectiveness. Such steps can benefit the practitioners to collect more tax.

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Section: Resultsmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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Governance and tax revenue: does foreign aid matter?

Wen

Farooq

Tabash

et al. 2021

International Review of Administrative Sciences

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“…Further, one more estimation technique is employed as a part of robustness check. The Dynamic Ordinary Least Square (DOLS) proposed by Stock and Watson (1993) and later extended by Kao and Chiang (2001)22The mathematical derivation of the model can be found in Stock and Watson (1993).. DOLS method can be applied with mixed and higher orders of integration and frequently used in estimating long-run nexus for heterogeneous panel by correcting simultaneity, endogeneity, serial correlation and small sample bias among the regressor 33Fully Modified OLS (FMOLS) is also commonly used to check the robustness of DOLS results in the literature; however, this approach essentially requires that all variables must have the same integration order (Yahyaoui and Bouchoucha, 2021). As Kao and Chiang (2001) proposed, DOLS outperforms FMOLS estimators in terms of mean biases.…”

Section: Empirical Methodologymentioning

confidence: 99%

Reconsidering agricultural credits and agricultural productivity nexus: Evidence from a global representative panel data

Özdemir¹

2022

Preprint

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Access to credit has been a key component in protecting agriculture sector against uncertainties and climaterelated shocks. Agricultural credits may also increase both agribusiness sectors' and farming-related commercial activities' exposure to world markets. The purpose of this study is to investigate the short-run and long-run effects of agricultural credits on agriculture value added using some other control variables such as foreign direct investments and government expenditures. Employing combined autoregressive distributed lag (ARDL) panel approach and Dumitrescu-Hurlin Panel Causality tests with global data from 2000-2018, we found that credits to agriculture affects agricultural productivity positively in the long-run; when agricultural credits increase by 1%, agricultural productivity will increase by 0.19 % ; that is, an increase in the amount of credits to agricultural sector leads to a remarkable increase in value-added agriculture, while FDI and government size both reduce agricultural productivity across countries. The findings of the pairwise causation test indicate that there exists bidirectional causal links among almost all variables, validating a feedback hypothesis revealed among agricultural productivity, credit to agriculture, FDI, government expenditures and inflation.

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“…The present study is unique in many respects. First, most studies investigate the impact of international remittances (Akçay & Karabulutoğlu, 2021), trade (Umulisa, 2020), trade openness (Xu et al, 2021), foreign aid (Yahyaoui & Bouchoucha, 2021), foreign direct investment (Younsi et al, 2021), and so forth, on the African countries. But, how risk and uncertainty affect a particular group of African countries (North African countries) via the tourism sector is overlooked in the literature.…”

Section: Introductionmentioning

confidence: 99%

Risk, uncertainty and the tourism sector of North Africa

Istiak

2021

African Development Review

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This paper investigates, for the first time, the uncertainty on the tourism of North Africa and uncertainty on the second‐degree effects of the North African tourism sector. The study uses data from 1995 to 2019 and a structural vector autoregression to perform the investigation. The research finds that uncertainties, measured by the uncertainty of Europe, the uncertainty of the Middle East and Central Asia, and the volatility of GDP growth of the Euro area, have significant negative effects on investment and job creation in, as well as the contribution to the GDP of, the North African tourism sector. The paper invents a new proxy of risk, measured by the volatility of crude oil production in North Africa, and finds that this new risk measure has a significant negative impact on the North African tourism sector. The results show that geopolitical risk and the uncertainty of Africa do not significantly affect the North African tourism sector. The paper suggests that policymakers in North Africa subsidize tourism‐related activities and explore new markets to attract tourists during periods of high risk and uncertainty.

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The long‐run relationship between ODA, growth and governance: An application of FMOLS and DOLS approaches

Cited by 34 publications

References 56 publications

Governance and tax revenue: does foreign aid matter?

Governance and tax revenue: does foreign aid matter?

Reconsidering agricultural credits and agricultural productivity nexus: Evidence from a global representative panel data

Risk, uncertainty and the tourism sector of North Africa

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