Abstract: This paper examines the Granger causal nexus between financial development and energy consumption in the group of 35 Financial Action Task Force (FATF) Countries over the period 1988-2012. The study uses two financial development indicators such as private sector credit and stock market capitalization and seven energy consumption indicators such as coal, oil, gas, electricity, hydro-electrical, nuclear and biomass. Using panel cointegration tests, the study finds that financial development and energy consumption are cointegrated, indicating the presence of a long-run relationship between the two. Using a panel vector error correction model (VECM), the study detects both bidirectional and unidirectional causality between financial development and energy consumption. The variation of this causality is due to the use of different proxies for both financial development and energy consumption. The policy implication of this study is that economic policies should recognize the differences in the financial development-energy consumption nexus in order to maintain sustainable development in the selected 35 FATF countries.
Abstract: This paper addressed the impacts of energy consumption, economic growth, financial development, and population size on environmental degradation using grey relational analysis (GRA) for China, where foreign direct investment (FDI) inflows is the proxy variable for financial development. The more recent historical data during the period 2004–2011 are used, because the use of very old data for data analysis may not be suitable for rapidly developing countries. The results of the GRA indicate that the linkage effects of energy consumption–emissions and GDP–emissions are ranked first and second, respectively. These reveal that energy consumption and economic growth are strongly correlated with emissions. Higher economic growth requires more energy consumption and increasing environmental pollution. Likewise, more efficient energy use needs a higher level of economic development. Therefore, policies to improve energy efficiency and create a low-carbon economy can reduce emissions without hurting economic growth. The finding of FDI–emissions linkage is ranked third. This indicates that China do not apply weak environmental regulations to attract inward FDI. Furthermore, China’s government in attracting inward FDI should strengthen environmental policy. The finding of population–emissions linkage effect is ranked fourth, implying that population size does not directly affect CO2 emissions, even though China has the world’s largest population, and Chinese people are very economical use of energy-related products. Overall, the energy conservation, improving efficiency, managing demand, and financial development, which aim at curtailing waste of energy, reducing both energy consumption and emissions, and without loss of the country’s competitiveness, can be adopted for developing economies. The GRA is one of the best way to use a lower data to build a dynamic analysis model.
Abstract: This paper adopts a two-stage data envelopment
analysis to explore the impacts of financial development and bank
operating scale on bank efficiencies. The sample comprises
unbalanced panel data of 32 Taiwanese listed domestic commercial
banks over the period 1998 to 2013. Empirical results show that pure
technical efficiency is positively related to financial development,
whereas the effect of financial development on scale efficiency is
insignificant. Enlargement of bank operating scale improves bank
efficiencies, but the efficiency gains are decreased gradually when the
scale increases. Increases in capital adequacy ratio and market power
of loans lead into a growth of bank efficiencies.
Abstract: Comparisons of financial development across
countries are central to answering many of the questions on factors
leading to economic development. For this reason this study analyzes
the implications of financial system’s development on country’s
economic development. The aim of the article: to analyze the impact
of financial system’s development on economic development. The
following research methods were used: systemic, logical and
comparative analysis of scientific literature, analysis of statistical
data, time series model (Autoregressive Distributed Lag (ARDL)
Model). The empirical results suggest about positive short and long
term effect of stock market development on GDP per capita.
Abstract: The current study explored the effect of economic
development, financial development and institutional quality on
environmental destruction in upper-middle income countries during
the time period of 1999-2011. The dependent variable is logarithm of
carbon dioxide emissions that can be considered as an index for
destruction or quality of the environment given to its effects on the
environment. Financial development and institutional development
variables as well as some control variables were considered. In order
to study cross-sectional correlation among the countries under study,
Pesaran and Friz test was used. Since the results of both tests show
cross-sectional correlation in the countries under study, seemingly
unrelated regression method was utilized for model estimation. The
results disclosed that Kuznets’ environmental curve hypothesis is
confirmed in upper-middle income countries and also, financial
development and institutional quality have a significant effect on
environmental quality. The results of this study can be considered by
policy makers in countries with different income groups to have
access to a growth accompanied by improved environmental quality.