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.

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.

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.

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.

Is Financial Development Another Source of Comparative Advantage? Evidence from China

Using panel data for 29 provinces in China during 1990-2004, the present paper attempts to explore a possible link between financial development and China＇s foreign trade. Three measures of comparative advantage in manufactured goods have been applied in our study, including Balassa＇s revealed comparative advantage, the net manufactured export index, and the Michaely index. We also use four indicators of financial development to identify the different functions of regional financial development, and to determine both size and efficiency features of financial institutions. The estimation results suggest that besides factor endowments, foreign firms and infrastructure, financial development has a quantitatively large and robust effect on China ＇ s manufactured goods trade. Therefore, further reform of China＇s financial system should be encouraged to fully exploit the comparative advantage of China＇s foreign trade.

Financial Development,Economic Growth and Adaptive Efficiency:A Comparison between China and Pakistan

The strong economic growth in China is difficult to reconcile with its inefficient financial system. The puzzle of China＇s financial development and growth can be explained through a dynamic criterion of adaptive efficiency, rather than through allocative efficiency. Using the framework of an autoregressive distributed lag model, the present paper tests the hypothesis that the GDP growth rate is dependent on financial development along with other variables in China and Pakistan. The hypothesis cannot be rejected in both cases. However, the results show that economic growth has a negative relationship with credit to the private sector in China. We conclude that financial development is a source of China＇s high growth rate and that the banking system is still under an evolutionary process, involving the pursuit of social objectives instead of the sole objective of profit maximization. Our results provide some implications for other developing countries like Pakistan.

Change of Regional Financial Development Disparity in China(1978-1999)

A large country will undoubtedly show development disparity among its regions: it is not surprising therefore that China would not have developed evenly. In analyzing China’s development features and its manner of enforcing relative policies, the various financial sectors in China cannot be simply regarded as a whole unit: a unified policy would not be suitable for the local conditions of a given area, otherwise it will lost its future direction. This paper measures China’s disparity of financial development during the period

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’.

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.

Financial Development, Foreign Direct Investment, and the Efficiency of Capital Allocation in China

We study the roles of local financial development and foreign direct investment, and more importantly, their interaction with one another, in local capital allocation, based on Chinese industrial and regional data. Our main finding is that, although local financial development and FDI each individually tended to improve the efficiency of local capital allocation during the sample period, they tended to compete and crowd out each other＇s effect, so that one impaired the individual function of the other. In particular, there exists a threshold value for local financial development, above which an increase in FDI reduces the efficiency of local capital allocation, rather than improve it. On the other hand, there exists a threshold value for FDI, above which further development in the local financial system lowers the efficiency of local capital allocation, rather than increase it. Our estimations suggest that the levels of FDI and local financial development in some relatively more developed Chinese regions have already surpassed such threshold values. We provide some interpretations of our findings and we discuss potential policy implications.

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.