Theses supervised by Çağay Coşkuner
16 theses · Eastern Mediterranean University
Macroeconomic Factors Affecting the Diffusion of Genetically Modified Crops Technology
Genetic modified crop technology is one of the world subject today especially because of food security. The Food and Agricultural Organization (FAO) has food security as one of the most pressing problem found in the world due to the unexpected increase in the world population. Therefore discoveries were made on how to improve on the food security of the world and reduce hunger in the world. One of the solutions was first of all the green revolution which began in India .This revolution helped to improve on the food supply in India and reduced hunger in India as well. Following this revolution was now the genetic modified crop technology which helped to fight against pest and some insects which could destroy some crops. Also some genetic modified cops could grow in some desert areas like in Sub Sahara areas were because of the dryness and harsh weather some crops couldn’t adapt. Due to the advantages discovered from using the genetic modified crop technology, many countries there decided to adopt this technology. The question is therefore why the spread of this technology faster in some countries than other counties? The study tries to develop and test a model which tries to explain the uneven diffusion of genetic modified crop technology across countries. We used mostly macroeconomic factors as our independent variables such as openness to trade, credit availability, GDP per capita, government size, growth rate and inflation. Genetic modified crop land size is our dependent variable. Also we used 10 countries and nine years (2004 -2012) with the help of panel data in our regression. However, the results shows some macroeconomics factors such as credit availability, government size, growth rate were significant in explaining the uneven diffusion of genetically modified crop technology. Keywords: Genetic modified crop technology, Government size, credit availability, openness to trade ,growth rate ,inflation , GDP per capita ,Food security.
The Effect of Real Exchange Rate Undervaluation on Economic Growth
Over the years, economists have come to agree that a poorly handled exchange rate would do more harm than good to the growth efforts of any economy. However, the exact relationship between the exchange rates and the economic growth is not well understood. This study uses Rodrik (2008) paper on “the real exchange rate and economic growth” as a benchmark work to carry out a comprehensive analysis of the impact of currency undervaluation on economic growth. To this end this thesis is organized into four independent studies. The first two are panel data studies where the economic growth is regressed on real exchange rate undervaluation. The two studies differ from each other mainly in two ways. One difference is the way that currency undervaluation is measured, and the second difference is the way the growth equation is modelled. In short, second study-which is referred as fundamental equilibrium exchange rate model- is intended to be an improvement on the first study –which is referred as the Balassa-Samuelson effect based Rodrik approach. The third research examines how the real exchange rate undervaluation impacts economic growth by using time series analysis. The relationship studies for four countries, -namely Germany, South Africa, Mexico, and Cameroon- with different exchange rate regimes. The studies check if the relationships are symmetric or asymmetric; and accordingly uses ARDL or NARDL methodologies to investigate how the real exchange rate undervaluation impacts growth. The fourth study looks at the contribution of the real exchange rate undervaluation, the tourism sector, and human capital development to the economic growth by using a panel data of selected microstates – many of which are small island nations-. In all four studies, the results are mainly in line with the theoretical expectations and/or with main previous empirical works. Our results provide evidence that real exchange rate undervaluation mainly has a positive impact on growth. Keywords: Economic growth, Exchange rate, Balassa-Samuelson effect, asymmetric relation, Tourism, human capital.
Effects of Sanctions on EU – Russia Trade: A Gravity Model Approach
This thesis studies trade relations between the European Union and the Russian Federation. The main objective is to see how international sanctions have affected bilateral trade volume between the Russia and the EU. Data for Russia and 28 European Union countries is used. The augmented gravity model with a panel data methodology is used. The main results suggest that distance between the countries has no effect on trade, another insignificant variable is the Linder variable that was manually calculated by the authors. Variables like GDP of EU member states and the GDP of Russia were significant and have a positive effect on trade. Variables representing common border and the exchange rates were significant and have a positive effect on trade. On the other hand, variables representing common history and sanctions have a negative impact on trade. As expected research found that sanctions have a negative impact on trade and should be avoided if possible. Keywords: International trade, Sanctions, Gravity model of trade.
An Empirical Assessment of the Convergence Theory of the Solow Model
This study empirically investigates the convergence theory based on the perceived level of diversities in the economic development within the countries of the world. he estimation method employed for this research work is the cross-sectional regression analysis to measure convergence, using data of 1980 and 2010 for 50 selected countries. Data for the study were extracted and sourced from the World Bank development indicators database. From the empirical evidence, we discovered there is a reaction, or better put, a feedback relationship between growth and the initial GDP per capita. This implies that, country with low initial GDP per capita is farther away from their steady state and would grow faster than the countries with high initial GDP per capita but closer to their steady state. On the nexus between the growth and initial GDP per capita, the regression analysis revealed that, level of investment is a catalyst for growth. Hence, we infer that, the poor countries should enhance their level of investment (both in human and physical capital). The more the level of investment, the more would be the level of growth. The model exhibits a natural long-run relationship. This made us to know that, no matter the level of disparities and diversities between the poor countries and the richer ones today; the former would still grow and catches up with the latter. Keywords: Convergence, growth, GDP per capita, investment, economic development, cross sectional.
Evaluating the Economic Growth Using Artificial Neural Networks and Panel Fixed Effects
This thesis uses a panel data to investigate the effects of eight macroeconomic variables on the evolution of growth rate of Gross Domestic Product per capita. The panel data consist of 23 years of observation for ten developed and ten developing countries. The years covered are from 1990 to 2012. The independent variables selected are: (i) initial GDP per capita (INIGDPPC) to account for the effect of convergence (ii) terms of trade (TOT), (iii) trade openness (OPEN), (iv) gross fixed capital formation (GFCF), (v) human capital (EDUC) measured as average years of schooling, (vi) inflation (INF), (vii) government size (GOVT) and (viii) population growth (POPUL). The thesis methodology is unique in combines cutting-edge data-driven models such as hybrid artificial neural network with genetic algorithm (ANN/GA) and fixed effect panel model. First, the impact of eight independent variables on growth is investigated and dominant variables are identified by using three data samples: developed countries only, developing countries only, and developed and developing countries together. Moreover the study uses three different data formatting for each sample: annual data, periodic data of 4 years overlapping and periodic data of 4 years non-overlapping. Second, two estimation methods are used to predict values of growth. This allows us to compare those forecasting methods with each other. The analysis indicates INIGDPPC, INF, GFCF, GOVT, EDUC, POPUL, TOT and OPEN variables have the statistically significant impact on growth in the panel regression. The INIGDPPC, POPUL, GOVT, and INF have negative and OPEN, EDUC and GFCF have positive statistically significant effects on the economic growth in developed and developing countries. Moreover, the results obtained from the study have shown that the power of the hybrid ANN/GA method (combined the artificial neural network method and genetic algorithm) is more than Panel fixed effect estimation method in predicting the economic growth.
The Impact of Savings on Economic Growth in an Open Economy
It is often argued that policies that support national savings are critical to economic growth of countries. It is believed that the level of savings in any country should be of major concern to stakeholders. This study uses a Generalized Least Squares (GLS) panel regression technique to examine the impact of savings on economic growth. The study further examines the effect both openness and level of development have on the impact of savings on economic growth with the aid of interaction terms. The study finds that savings have both direct and indirect impact on economic growth. The indirect effect occurs through the impact of investments in human and physical capital on economic growth. The study also finds that both higher capital mobility (financial openness) and higher levels of development lower the impact of national savings on economic growth. Keywords: Economic growth, Savings, Open economy, Capital mobility, Development.
Role of Education on Economic Growth: the Quality and Quantity Measures
Over the years most of the countries in the world have been faced with several socio-economic problems that have retard rapid economic growth. In an attempt to find a permanent solution to this problem studies have shown that the educational sector of every country is a leading instrument for promoting economic growth. The study analyses the role of the quality and quantity of education in promoting economic growth. The study further examines this impact on economic growth using the generalized least square (GLS) panel regression techniques and using annual data for 2000, 2003, 2006, 2009, and 2012 for 23 OECD member countries. The findings show that both government expenditure, school attainment and the quality of education measured by the PISA test scores has significant effects on economic growth. This study recommends that both the public and private sector should collectively revamp the education sector through increase in capital expenditure on education, and a good salary scheme and other incentives should implement to motivate teachers performance, as teachers have a significant role to play in improving the performance of the student. Keyword: Economic growth, Education, High School Enrollment, Gross Domestic Product per Capita, Government Expenditure, and PISA test score.
Saving-Investment Correlation and Capital Mobility- Feldstein and Horioka Approach
The purpose of this paper is to investigate the existence of capital mobility in 10 newly emerging economies by using a model presented first in Feldstein and Horioka (1980). In Feldstein Horioka paper, the beta coefficient (b value) is estimated to measure the relationship between domestic investment and savings. In their original work, Feldstein and Horioka estimated a beta coefficient of 0.87, close to 1, which indicates low capital mobility contrary to the standard economy theory of perfect capital mobility. Using an annual data from 1997-2013 and panel data econometrics regression to test the relationship between savings and investment, we find results that are contradictory to that of Feldstein and Horioka puzzle. In this study, we got a relatively lower beta coefficient indicating there is some extent of capital mobility in the countries we sampled. We carried out further analysis by including the percentage GDP growth rate and inflation rate as control variables in the model since these variables are factors that influences a nation’s domestic investment. Regardless, the saving retention coefficient from all the regression results in this paper is below 0.5, which is relatively far from 1, implying that there is a degree of capital mobility among the sampled countries. Keywords: Saving, Investment, Correlation, Panel data, and Capital mobility.
Central Bank Independence and Inflation: Empirical Analysis
Many countries have implemented reforms on their Central Banks granting them more independence from political influences. This can be attributed to the recent research in this area which showed that making the Central Banks more independent is a very good means of achieving lower inflation/price stability in a country. Empirical work supporting this theory shows that there is a significant relationship between inflation and Central Bank Independence but not necessary enough to really bring down inflationary problems. Using data for 6 countries over the period of 1997-2011, result supports this theory but it also shows that other control variable needs to be added for better explanation, and also CBI should be part of policies and strategies to help fight and control inflation in these countries and not necessary the only solution as other policies need to be adopted by their Government and Central Banks. Keywords: Central Bank Independence, Inflation, Budget Surplus
Import Function for Nigeria from 1980 - 2014
This research work aims at investigating import as a function of income in Nigerian economy between 1980 and 2014. The econometric techniques used for this thesis are Unit Root Tests, Johansen Cointegration, Vector Error Correction, and Granger Causality Methods. These techniques were consistent with seven of the previous studies in the literature review, and the other seven previous studies used other econometric techniques in their papers. Annual time series data was taken from the World Bank Database. The regression model was in logarithms transformation form purposely to linearize the model, to reduce the impact of outliers and thus to avoid spurious regression result. The theoretical expectation is that there is a positive relationship between the IMPORTS and GNI, in Nigeria, that is, the higher is the GNI, the higher will be the consumption and thus the import. One Other variable was introduced to independent variable and the other variable is Real Exchange Rate (REXR). (IMPORTS), (GNI) and (REXR) have Unit Roots problem at level but were stationary at first difference statistics. Furthermore, in an investigation of cointegration, Trace and Max. Eigen Value Test indicates one cointegrating equations at 5% significance level. This thesis shows that there is a long-run relationship between the Imports and the Income in Nigeria between 1980 and 2014. The long-run shows positive relationship while the short-run shows no significant relationship.
Economic and Social Factors Contributing to CO2 Emission
This research studies the economic and social factors of carbon emissions in the Organization of Petroleum Exporting Countries (OPEC) over period 1995-2014. More especially the thesis studied the link between CO2 emissions and four socio-economic variables (per-capita GDP, urbanization, fossil fuel energy consumption and international trade). A long run relationship is confirmed by Kao (1999), Pedroni (1999) and Johansen (Maddala and Wu, 1999) panel cointegration tests. Fully modified ordinary least squares (FMOLS) outcomes specify the following. The relationship among CO2 emission and GDP is non-linear in OPEC countries, it follows the inverted U-shape suggested by the environmental Kuznets curve hypothesis. Urbanization is responsible for a significant proportion of carbon emissions in OPEC countries. Fossil fuel energy consumption is a significantly positive driver of carbon emission. A large proportion of carbon emissions within OPEC member countries is due to international trade. Keywords: OPEC, Carbon emissions, GDP per-capita, Energy consumption, Urbanization, International trade, FMOLS.
The Relationship between Inflation and Unemployment in Nigeria
The main objective of this study is to examine the relationship between inflation and unemployment in Nigeria for the period 1977 – 2013 through the use of the Phillips Curve. To analyze the data on inflation and unemployment, this study used Vector Error Correction Model and Granger Causality technique in order to test the validity of the Phillips Curve relationship in Nigeria. The Granger Causality Test shows that inflation Granger causes the unemployment. Inflation and unemployment are destructive rather than helpful to the economic development and growth in Nigeria. According to the empirical findings of this study, as in the Philips Curve, there is a negative relationship between inflation and unemployment rates in Nigeria. Keywords: Phillips Curve, Cointegration, Inflation, Unemployment.
The Impact of Trade on Unemployment
International trade has been one of the most fiercely debated economic issues. While standard trade theories state the benefits of free trade, several economist have raised questions about the validity of these theories and of the claimed benefits of trade. These debated have been intensified as we progressed in the era of globalization. In this thesis we focus on one of these debate topics that is we attempt to investigate the impact of trade on unemployment. In other words this study is an empirical investigation of how trade volume impacts the unemployment rate. The hypothesis of the paper is that, like the standard trade theory has suggested, the more is the trade, the bigger are the welfare and growth gains, and hence the lower is the unemployment. To this end, the study gathers data for 20 countries, 9 of which are from low income countries and 11 of which are from high income countries. Panel data regressions are carried for three different samples: low-income countries only, high-income countries only and high and low income countries together. In all regressions we find a supportive evidence that the trade impacts unemployment rate negatively. Controlling for GDP growth rates and accounting for granger-causality issues do not change the results. Keywords: Trade, unemployment.
A Test for Beta Convergence
The research is based on examining of beta convergence among the countries around the world. The method of estimation adopted in this framework is a cross-sectional analysis of regression, employing data from 46 selected countries for the period of 1980 to 2014. The sources of the data set involve in the research is the World Bank Development database. The outcome of the regression provides a strong evidence of a negative relationship between growth and the initial per capita GDP of a country. This basically means that a country which tends to have a lower level of initial per person income is further away from it steady state, thus it grows faster compared to a country with a higher initial income per person who is closer to it steady state grows slower. Based on the regression it is also clear that investment is a strong key in the process of growth. The higher the investment level, the higher the chances of growth occurrence. The model shows a long run relationship between the dependent and the independent variables which provide room for the poorer countries to grow faster and catch up with the wealthy countries at the steady state despite their diversities. Keywords: beta convergence, countries cross-sectional, development, growth. Investment, income per person, poor, wealthy
An Empirical Test for Linder Theory and Gravity Model of Trade
First, I tried to see how Newton’s gravitational equation, as it was transplanted into the field of International Trade by Jan Tinbergen (1962), can be time-honored by applying it to Nigerian bilateral trade pattern. For this purpose I collected the data for Nigerian bilateral trade with fifty four (54) countries, which account for more than 95% of its trade deals in the year 2013. I also adopted the OLS regression method of estimation. The result showed a strong support to the model, which says trade between is affected positively by the economic sizes and inversely by their respective distance. Second, the Linder theory was tested using a cross-country analysis between G7 countries plus Spain, Netherlands and Austria. I adopted the Gravity equation again for this purpose where we used the 2014 trade data for those countries. The dummy for EU-membership and Language similarity were included in the model to capture the effect of the economic distance, as suggested by Johansson and Westin (1994). The result is so robust and showed support for both Linder Theory and Gravity Model. Keywords: Gravity Model, Linder Theory, Trade, Nigeria, G7.
Trade Openness, FDI and Oil Price: The Impacts to the Economic Growth: A Time Series Study of Nigeria
This is a time series study that examines the connection among the Foreign Direct Investment (FDI), trade openness and economic performance as in Gross Domestic Products (GDP) growth in Nigeria, within the vector autoregressive (VAR) framework. In this study, the Johansen cointegration test is employed to check if an equilibrium exists in the long run among the selected economic factors,spanning the period from 1970 to 2012. The finding with the Johansen test shows that there is no cointegration. Subsequently, we consider the Granger causality test for the analyses of the causality between Openness, FDI, Oil Price and Growth. Also, we made use of nexus triangular figure to show the transmission of the variables. We equally made use of impulse response figure from the VAR Model to show the responses of the variables to the shocks in the system. Granger causality test indicates that the FDI Granger causes the GDP and trade openness in the Nigerian economy in the long run, whereas oil price is Granger causing all other variables as an exogenous variable. This is clearly depicted with the Triangular nexus structure from the causality test. Keywords: Cointegration, Diagnosis, Growth, Openness, FDI, Granger causality, VAR, Nigeria.