Exploring the moderating role of financial development in environmental Kuznets curve for South Africa:fresh evidence from the novel dynamic ARDL simulations approach

The extant literature has produced mixed evidence on the relationship between finan-cial development and ecological sustainability.This work addresses this conundrum by investigating financial development’s direct and indirect consequences on ecologi-cal quality utilizing the environmental Kuznets curve(EKC)methodological approach.Our empirical analysis is based on the novel dynamic autoregressive distributed lag simulations approach for South Africa between 1960 and 2020.The results,which used five distinct financial development measures,demonstrate that financial develop-ment boosts ecological integrity and environmental sustainability over the long and short terms.In the instance of South Africa,we additionally confirm the validity of the EKC theory.More importantly,the outcomes of the indirect channels demonstrate that financial development increases energy usage’s role in causing pollution while attenuating the detrimental impacts of economic growth,trade openness,and foreign direct investment on ecological quality.Moreover,the presence of an inadequate financial system is a requirement for the basis of the pollution haven hypothesis(PHH),which we examine using trade openness and foreign direct investment variables.PHH for both of these variables disappears when financial development crosses specified thresholds.Finally,industrial value addition destroys ecological quality while tech-nological innovation enhances it.This research provides some crucial policy recom-mendations and fresh perspectives for South Africa as it develops national initiatives to support ecological sustainability and reach its net zero emissions goal.

Effects of financial development and capital accumulation on labor productivity in sub‑Saharan Africa:new insight from cross sectional autoregressive lag approach

This study aims to shed light on the effects of financial development and accumula-tion of capital on the productivity of labor in the sub-Sahara African region within the period of 1990–2018.In this work,we used the(dynamic)common correlated effects estimator-mean group and additional techniques such as cross-section autoregressive distributed lag to calibrate the sample into the African subregion to ensure robustness.The findings reveal that financial progress in the region over time leads to an increase in productivity of labor and also the accumulation of capital.Furthermore,financial markets have a progressive impact on the productivity of labor within sub-Saharan African regions.We extend the very limited literature on the nexus between financial development and labor productivity by incorporating capital accumulation into our model which has not been previously studied.

Does financial development moderate the link between technological innovation and environmental indicators?An advanced panel analysis

This study analyzes the role of financial development(FD)on the impact of technologi-cal innovation(TI)on six environmental quality indicators for the 25 economies that are part of the Organization for Economic Cooperation and Development for the period from 2000 to 2019.We use a two-step dynamic generalized method of moments approach to understand this relationship.The results show that FD augments the posi-tive effects of TI on four of the six environmental indicators,namely ecological foot-print,adjusted net savings,pressure on nature,and environmental performance.However,no significant effects on environmental sustainability and environmental vulnerability indices were found.When considering all of the environmental quality indicators,TI appears to enhance environmental quality.We find evidence to support the existence of the environmental Kuznets curve in the context of each environmen-tal indicator and economic growth.Moreover,FD and energy consumption appear to accelerate environmental degradation.Based on these results,FD should be viewed as an important parameter in designing policies for innovation to achieve the goal of net-zero carbon emissions.Highlights.Technological innovation and environmental quality nexus is studied.The moderating role of financial development is analyzed.Six different environmental quality indicators are used for OECD countries.Financial development intensifies the environmental benefits of innovation.•The EKC hypothesis is confirmed for all six environmental indicators.

Fintech,regtech,and financial development:evidence from China

This study investigates the influence of fintech on developments in China’s financial sector across 290 cities and 31 provinces between 2011 and 2018.Using a two-stage least squares instrumental variable regression approach and correcting for cross-sectional dependency,simultaneity,and endogeneity of regressors,the results establish a positive link between fintech and financial development.Our findings show that fintech supports financial sector development by enhancing access(loans),depth(deposits),and savings within China’s financial institutions.We also show that the emergence of fintech in the area of financial regulation(regulatory technology:regtech)can significantly improve financial development outcomes.Therefore,it is imperative for regulators to pursue policies that balance growth in the fintech sector while mitigating the associated risks.In addition,we use the difference-in-differences approach to show that policy measures such as interest rates liberalization also positively impacted finan-cial development during the analysis period.In our conclusion,we suggest a policy framework for balanced fintech sector growth in developing countries.

Remittances,financial development and economic growth in sub-Saharan African countries:evidence from a PMG-ARDL approach

The study investigated the relationship among remittances,financial development and economic growth in a panel of 20 sub-Saharan African countries over the period of 2000 and 2015.The study used both Pooled Mean Group and Mean Group/ARDL estimations with panel unit root and cointegration tests.After establishing cointegration,remittances and financial development were found to have positive effects on economic growth both in the short and the long run.The interactive term showed that financial development acted as a substitute in the remittances-growth relationship.Finally,unidirectional causal relationships were found to exist from GDP to remittances and from financial development to GDP.However,no causality existed between remittances and financial development in the SSA countries.

Alternative measure of financial development and investment-cash flow sensitivity:evidence from an emerging economy

This study examines the impact of financial development on corporate investment in terms of their influence on financing constraints.This study also tries to find the effect of financial development on the investment-cash flow sensitivity across the size,degree of financial constraints and group affiliation of the firm.This study employs dynamic panel data model or more specifically system generalized method of moments(GMM)estimation technique.The estimation results reveal that cash flow affects the investment decision of the company positively,which implies that Indian firms are financially constrained.Also,we observe that financial development reduces the investment-cash flow sensitivity and the effect of financial development is more prominent for small size and standalone firms.The results are robust across the period and,for both financially constrained and unconstrained firms.This study contributes to the existing literature by analyzing the impact of financial development on the role of cash flow in determining investments undertaken by the Indian firms,which is an unexplored issue from an emerging market perspective.

Impact of petroleum and non-petroleum indices on financial development in Oman

This study analyzes the impact of petroleum and non-petroleum indices on the financial development of the Sultanate of Oman from 1978 to 2017.To this end,it uses the petroleum proxy of oil rents(%of gross domestic product,GDP)and the non-petroleum proxy of industry(including construction)value added(%of GDP);agriculture,forestry,and fishing value added(%of GDP);and services value added(%of GDP)to determine the effect on financial development,measured by the amount of domestic credit extended to the private sector by banks(%of GDP).It applies an autoregressive distributed lag(ARDL)model.The long-term equation illustrates that the agriculture and industry GDPs have a negative and significant relationship with domestic credit in Oman.However,the oil and service sector GDPs promote financial development.The short-term equation illustrates that the oil,agricultural,and service sectors have positive and significant effects on domestic credit.The conclusion is that the economy of Oman is still in the first phase of economic diversification.Accordingly,the government should use oil revenues to develop various non-oil industrial sectors.This would enhance the country’s competitiveness in the global economy and positively contribute to improving the liquidity of the banking sector for stimulating credit at the macroeconomic level.

Financial development during COVID‑19 pandemic:the role of coronavirus testing and functional labs

The outbreak of the SARS-CoV-2 virus in early 2020,known as COVID-19,spread to more than 200 countries and negatively affected the global economic output.Financial activities were primarily depressed,and investors were reluctant to start new financial investments while ongoing projects further declined due to the global lockdown to curb the disease.This study analyzes the money supply reaction to the COVID-19 pandemic using a cross-sectional panel of 115 countries.The study used robust least square regression and innovation accounting techniques to get sound parameter estimates.The results show that COVID-19 infected cases are the main contributing factor that obstructs financial activities and decrease money supply.In contrast,an increasing number of recovered cases and COVID-19 testing capabilities gave investors confidence to increase stock trade across countries.The overall forecast trend shows that COVID-19 infected cases and recovered cases followed the U-shaped trend,while COVID-19 critical cases and reported deaths showed a decreasing trend.Finally,the money supply and testing capacity show a positive trend over a period.The study concludes that financial development can be expanded by increasing the testing capacity and functional labs to identify suspected coronavirus cases globally.

At what levels of financial development does information sharing matter?

Background:The purpose of this study is to investigate how an increase in information-sharing bureaus affects financial access.Methods:We employed contemporary and non-contemporary interactive quantile regressions in 53 African countries for the period 2004–2011.Information-sharing bureaus are proxied with public credit registries and private credit offices.Financial development dynamics involving depth(at overall economic and financial system levels),efficiency(at banking and financial system levels),activity(from banking and financial system perspectives),and size are used.Results:Two key findings are established.First,the effect of an increase in private credit bureaus is not clearly noticeable on financial access,probably because private credit agencies are still to be established in many countries.Second,an increase in public credit registries for the most part improves financial allocation efficiency and activity(or credit)between the 25th and 75th quartiles.Conclusions:As a main policy implication,countries in the top and bottom ends of the financial efficiency and activity distributions are unlikely to benefit from enhanced financial allocation efficiency as a result of an increase in public credit registries.

Empirical Analysis on Financial Development,Urbanization,and Urban and Rural Resident Income in Jiangsu Province

On the basis of the time series data of Jiangsu Province in 1990-2013,this paper made an empirical analysis on the dynamic relation between financial development,urbanization,and urban and rural resident income,and income gap.Studies have shown that expansion of financial development scale and increase in financial development efficiency can promote increase in urban and rural resident income.However,due to existence of rural financial repression problem,the increase in financial efficiency widens the urban and rural income gap;the urbanization level of Jiangsu Province remains stable stage;the increase in urbanization level practically raises urban and rural resident income level.Since the traditional extensive growth mode of urbanization lacks concern for balanced urban and rural development,urbanization development widens the urban and rural income gap.In view of these,it came up with policy recommendations including deepening financial reform,expanding the scale of rural financial institutions,increasing rural financial efficiency,and attaching great importance to the quality of urbanization development.

Research on the Impact of Financial Development on TFP—— DEA-Malmquist Index and Hansen Threshold Model Based on Panel Data of Shandong Province, China

Shandong’s TFP growth is higher than Chinese average,but the growth rate has slowed in recent years,appearing the phenomenon that the growth momentum of Shandong’s TFP is insufficient.Using DEA-Malmquist Index to measure Shandong’s TFP growth rate,empirical research from the perspective of financial development finds that financial scale,efficiency of financial institutions,fiscal intervention,and scale of foreign capital utilization have significant nonlinear effects on the growth of TFP.Furtherly,through threshold analysis,the efficiency of financial institutions has a significant threshold effect on TFP growth.Financial scale and fiscal intervention are the main core variables that affect the growth of TFP under the threshold effect,and they have the same effect direction on TFP before and after the threshold value.However,the effect intensity of these two core variables on TFP is different.

Research on the Impact of Financial Development on Industrial Structure Upgrading: Evidence from China’s Provincial Panel Data

On the basis of analyzing the mechanism of the impact of financial development on industrial structure upgrading,this paper comprehensively considers the state of the industrial structure among provinces from three dimensions:rationalization,optimization,and equalization.This research finds that financial development promotes the rationalization and optimization of industrial structure but has no significant effect on the equalization of industrial structure.

Financial Development Report Released in New York

New York, USA, on 8 October 2009-The world’s largest economies took the biggest hit in the World Economic Forum’s second annual Financial Development Report released today.

Financial sector development and economic growth:evidence from Cameroon

For decades,African economies have embarked on financial sector reforms.However,the empirical implications of these reforms have been divergent.This paper investigates the impact of financial development on Economic growth using time series data in Cameroon.This investigation was carried out using three common indicators of financial development(broad money,deposit/GDP and domestic credit to private sector).Using the Auto Regressive Distributive Lag(ARDL)technique of estimation,it was discovered that there exist a short-run positive relationship between monetary mass(M2),government expenditure and economic growth,a short run negative relationship between bank deposits,private investment and economic growth equally exists.However in the long run,all indicators of financial development show a positive and significant impact on economic growth.This paper thus confirms the existence of a positive and long-term impact of all the indicators of financial development on economic growth through bound test.It is therefore proposed that the financial reforms in Cameroon should be pushed forward in order to boost the development of the financial sector thus an increase in its role on economic growth.

Does financial development lower energy intensity?

The growth-induced effects of financial development have been well-established in the empirical literature,as well as the significance of financial development to energy demand behavior.However,the empirical evidence on the relationship between financial development and energy intensity remains sparse in the literature.Given the multifaceted nature of the effects of financial development,the proposed relationship seems a complex one and warrants an empirical investigation.Using the case of Ghana,this study provides an empirical answer to the question:does financial development lower energy intensity?To provide solid grounds for either rejection or acceptance of the null hypothesis,this study performed several robustness checks.Generally,the evidence revealed that financial development lowers energy intensity.Further,the results revealed that the price of energy,trade liberalization and industry structure play significant roles.These results have important implications for the design of macro energy efficiency policies and the creation of a‘Green Bank’.

The Impact of the Pilot Free Trade Zone on Regional Financial Development

This paper focuses on the Shanghai pilot free trade zone(FTZ).It investigates the effect of the FTZ policy on regional financial development.The synthetic control method employs quarterly data from 2005 to 2019 at the provincial level to investigate counterfactual states before and after the pilot FTZ was set up.First,our results reveal that the Shanghai pilotFTZ had a positive influence on the following four variables proxied for regional financial development:(i)the scale of regional financial development;(i)the efficiency of indirect financial development;(ii)the efficiency of direct financial development;(iv)the structure of financial development.Second,our results found that the policy effects that began to emerge from 2014 onwards exhibited a steadily increasing trend.As a result,the four proxy variables have increased by(i)197 percent,(i)202 percent,(ii)9.4 percent,and(iv)15.2 percent,respectively.That is,the scale of regional financial development and the efficiency of indirect financial development have increased more than theother proxy variables.

Financial sector development and Investment in selected countries of the Economic Community of West African States: empirical evidence using heterogeneous panel data method

This study investigated the impact of financial sector development on domestic investment in selected countries of the Economic Community of West African States(ECOWAS)for the years 1985–2017.The study employed the augmented mean group procedure,which accounts for country-specific heterogeneity and crosssectional dependence,and the Granger non-causality test to test for causality in the presence of cross-sectional dependence.The results show that(1)The impact of financial sector development on domestic investment depends on the measure of financial sector development utilised;(2)Domestic credit to the private sector has a positive but insignificant impact on domestic investment in ECOWAS,whereas banking intermediation efficiency(i.e.,ability of the banks to transform deposits into credit)and broad money supply negatively and significant influence domestic investment;(3)Cross-country differences exist in the impact of financial sector development on domestic investment in the selected ECOWAS countries;and(4)Domestic credit to the private sector Granger causes domestic investment in ECOWAS.The study recommends careful consideration in the measure of financial development that is utilised as a policy instrument to foster domestic investment.We also highlight the importance of employing country-specific domestic investment policies to avoid blanket policy measures.Domestic credit to the private sector should be given priority when forecasting domestic investment into the future.

The comparative African regional economics of globalization in financial allocation efficiency: the pre-crisis era revisited

This study assesses the role of globalization-fueled regionalization policies on the financial allocation efficiency of four economic and monetary regions in Africa from 1980 to 2008.Banking and financial system efficiency proxies are used as dependent variables and seven bundled and unbundled globalization variables are employed as independent indicators.The bundling is achieved by principal component analysis,while the empirical evidence is based on interactive fixed effects regressions.The findings are as follows.First,financial allocation efficiency is more sensitive to financial openness compared to trade openness and most sensitive to globalization.The relationship between allocation efficiency and globalization-fueled regionalization policies is defined by:(i)a Kuznets or inverted U-shaped curve in the UEMOA and CEMAC zones(evidence of decreasing returns for allocation efficiency from globalization-fueled regionalization)and(ii)a U-shaped relationship overwhelmingly in the COMESA and scantily in the EAC(increasing returns to allocation efficiency due to globalization-fueled regionalization).These relationships are relevant to the specific globalization dynamics within regions.Economic and monetary regions are more prone to surplus liquidity than pure economic regions are.Policy implications and measures for reducing surplus liquidity are also discussed.

Impact of China’s outward foreign direct investment on environmental pollution in the home country

In the context of economic globalization and increasingly tight resource and environmental constraints,the environmental effect of open economy has been highly concerned by the academic community.With the implementation of the“Going Global”campaign and the“Belt and Road Initiative”,China’s OFDI has been expanding.What is the impact of the rapid growth of OFDI on the home environment?How can China improve the quality and level of OFDI in order to promote domestic green development under the dual context of constructing a new dual circulation development pattern and advocating green development?These questions deserve further discussion.Most of the existing literature focuses on the empirical interpretation of OFDI’s home country environmental effect by using linear models,while few involve nonlinear models.The literature on the important role of financial development in home country and the threshold effect of OFDI on home country environment is even less common.In view of this,based on the mechanism of argumentation and propositional inference,this paper calculated the environmental pollution index of 30 provinces in China from 2003 to 2017 by using China’s provincial panel data of these years and selecting industrial waste water,industrial waste gas,industrial SO_(2),and industrial soot emissions and industrial solid waste production amount index.Then,this paper empirically studied China's OFDI home environment of financial development threshold effect by constructing financial development as the threshold variables panel threshold model.The results showed that:①China’s OFDI had a significant impact on the environment of the home country,based on the level of financial development of the home country.When China’s financial development level was lower than the first threshold value,China’s OFDI had a significant restraining effect on environmental pollution in the home country.When China’s financial development level crossed the first threshold value but did not exceed the second threshold value,China’s OFDI significantly enhanced its inhibiting effect on environmental pollution in its home country.When China’s financial development level was higher than the second threshold value,the inhibiting effect of China’s OFDI on environmental pollution in the home country was further enhanced.②In the sample period,the financial development level of most provinces in China was not high.Only a few provinces with high financial development level had a strong inhibiting effect on environmental pollution in their home country,and the provinces with a high degree of coupling and coordination between OFDI and financial development tended to have a low level of environmental pollution.Accordingly,this paper proposes to optimize the financial service environment of OFDI,improve the green technology content of OFDI,and strengthen the original innovation and re-innovation ability of green technology.