Mantu Kumar Mahalik

Energy Consumption, Economic Growth and Financial Development: Exploring the Empirical Linkages for India

This study investigates the relationship between energy consumption, economic growth and financial development in India by using the annual data for the period 1971–2009. An application of Auto Regressive Distributed Lag (ARDL) approach to cointegration results suggest that energy consumption is positively and significantly impacted by proportion of urban population in total population, while the same is negatively and significantly impacted by financial development, economic growth and proportion of industrial output in total output. The cointegration results also further suggest that an increase in proportion of urban population adversely influences economic growth, whereas energy use positively influences economic growth. The findings have significant policy implications for the Indian economy as we find energy use positively impacts on economic growth, suggesting that India is harnessing on the effective use of energy. However, it is recommended that India needs to be cautious in the effective use of energy in proper channels.

How strong is the causal relationship between globalization and energy consumption in developed economies? A country-specific time-series and panel analysis

ABSTRACT We examine the causal relationship between globalization, economic growth and energy consumption for 25 developed economies using both time series and panel data techniques for the period 1970–2014. Due to the presence of cross-sectional dependence in the panel (countries from Asia, North America, Western Europe and Oceania), we employ the cross-sectional augmented IPS test to ascertain unit root properties. The cointegration test results indicate the presence of a long-run association between globalization, economic growth and energy consumption. Long-run heterogeneous panel elasticities are estimated through the common correlated effects mean group estimator and the augmented mean group estimator. The empirical results reveal that, for most countries, globalization increases energy consumption. In the USA and UK, globalization is negatively correlated with energy consumption. The causality analysis indicates the presence of the globalization-driven energy consumption hypothesis. This empirical analysis suggests insightful policy guidelines for policy makers using globalization as an economic tool to utilize energy efficiently for sustainable economic development in the long run.

Finance and income inequality in Kazakhstan: evidence since transition with policy suggestions

ABSTRACT Kazakhstan gained independence in 1990 and has undergone significant changes in economic, social and trade conditions since then. We analyse the effects of financial development on income inequality in Kazakhstan, incorporating economic growth, foreign investment, education and the role of democracy as the drivers. We establish that income inequality in Kazakhstan is impaired by financial development. In summary, we send three messages for policy purposes. First, strengthening financial sector is necessary to close the gap between ‘haves and have-nots’. Second, attracting FDI beyond the hydrocarbon sector is necessary to alleviate inequality. Finally, adaptation of education system to the new social and economic environment would help in improving income distribution.

Factors determining regional housing prices: evidence from major cities in India

Using quarterly data (2010Q1–2013Q4), the study makes an initial attempt to explain the housing prices for 15 major cities of different regions in India. The overall result demonstrates that there is a dominance of fundamental factors over the non-fundamental factor (speculative factors) in explaining the regional housing prices. Further, among the fundamental factors, it is observed that the share price index, non-food bank credit and foreign direct investment positively explain the housing prices, while inflation rate and a partial measure of wealth (i.e. market capitalisation) negatively explain the same. The price of gold, real effective exchange rate and net portfolio investments don’t have any influence on the housing prices. This could to some extent signify a lack of market integration among various asset markets in the Indian situation. This might also be the reason for the lesser role of speculative factors in the Indian housing market.

Is Globalization Detrimental to CO2 Emissions in Japan? New Threshold Analysis

Using annual data from 1970 to 2014, this paper examines the effects of globalization on CO2 emissions in Japan while accounting for economic growth and energy consumption as potential determinants of carbon emissions. The structural breaks and asymmetries arising due to policy shifts require attention, and hence, an asymmetric threshold version of the ARDL model is utilized. The results show the presence of threshold asymmetric cointegration between variables. Threshold-based positive and negative shocks arising from globalization increase carbon emissions, while the impact of the latter is more profound. Energy consumption (economic growth) also has a significant positive effect on carbon emissions. Globalization, economic growth, and energy consumption significantly increase carbon emissions in the short run. We suggest that policy makers in Japan consider globalization and energy consumption as policy tools in formulating their policies regarding protecting sustainable environmental quality in the long run. Otherwise, the Japanese economy may continue to face environmental consequences such as undesirable climate change and massive warming at the micro and macro levels as a result of potential shocks arising from globalization and energy consumption.

Financial development, industrialization, the role of institutions and government: a comparative analysis between India and China

ABSTRACT This research is the first comparative attempt incorporating the role of economic, demographic, sectoral contribution, government and trade in explaining financial development for India and China. Using time-series estimations, we establish that institutional quality and government size impede financial development, whereas urbanization, industrialization and service sector growth help in financial development for both countries. Trade openness also enhances Indian financial development but hinders Chinese financial development. We suggest that the policy advisers should not underestimate the role of urbanization, industrialization and service sector growth in implementing financial development. Finally, we find that the institutions and governments will play a key role for both economies in enhancing finance and growth.

The drivers of economic growth in China and India: globalization or financial development?

Using annual data from 1970-2013 for China and India, this study examines the impact of globalization and financial development on economic growth by endogenizing capital and inflation and drawing comparisons between the two fastest growing emerging market economies. In the long-run, co-integration test results indicate that financial development increases economic growth in China and India. The results also reveal that globalization accelerates economic growth in India but, surprisingly, impairs economic growth in China as it increases competition for exports. The results furthermore disclose that acceleration in capitalization and inflation, as a proxy for aggregate demand, are positively linked to economic growth in China and India. Causality test results indicate that both financial development and economic growth are interdependent. In contrast, causality runs from higher economic growth to increased globalization in India, while the results do not support long-term causality between globalization and economic growth in China.

Is globalization detrimental to financial development? Further evidence from a very large emerging economy with significant orientation towards policies

ABSTRACT This study attempts to explore the relationship between globalization and financial development by endogenizing economic growth, population density, inflation and institutional quality for India during the period from 1971–2013. Using the more conclusivecombined cointegration method, the study provides evidence of cointegration among these variables. The long-run and short-run estimates from the ARDL model and causality tests, respectively, suggest that globalization in its all forms (political, social and economic) and its overall measure as well as inflation are detrimental to financial development, while economic growth and population density both promote financial development. Furthermore, the results also point out that institutional quality is not conducive to financial development in India, and there exists a feedback effect between financial development and inflation. Moreover, financial development is influenced by economic growth, institutional quality and population density.

MOTIVATING FACTORS OF REMITTANCES INFLOWS INTO DEVELOPING ASIAN ECONOMIES

Considering 11 major Asian migrant sending countries during 1975–2012, the study explores the factors that motivate migrants to remit their earnings to home countries. Using panel regressions, it finds that it is primarily the growth rate and interest rate differentials between the home and host, the household consumption and financial sector development at home along with per capita income of host countries which lead to remittances inflows. It concludes that it is not only the altruistic (or consumption) and higher interest income motives; but also the patriotic motives reflected from significant impact of past remittances, are crucial factors of such flows.