How The Energy Sector Is Affecting Economic Growth? – Comparing The United Kingdom with India (Published)
A country’s economy depends heavily on energy. Economic productivity and industrial growth depend on the use of energy in modern economies. In a modern economy, energy is responsible for more than one-tenth of the cost of production but accounts for most industrial growth, according to Barney and Franzi (2002). The economy’s need for energy has grown at about the same rate as that of wealth. It is a fact that wealth creation is predominantly calculated based on the usage of energy by society. At the beginning of the 19th century, biomass is the preferred choice of fuel. Energy demand in the west and advanced economies increased more rapidly because of rising standards during the end of the 20th century. In most production and consumption activities, energy plays a significant role in economic growth. An analysis of the energy sector components and their impacts on economic progress in two countries, the United Kingdom and India, was conducted based on an analytical approach. It is found in both countries that energy efficiency and foreign direct investment (net inflows) are positively correlated. Both the United Kingdom and India have significant correlations between energy efficiency and GDP (percentage of GDP). Employment rates and energy efficiency go hand in hand in both countries. India’s GDP per capita growth (annual %) is positively correlated with energy efficiency (0.447). This study followed only the economic indicators from the World Bank Development Indicators report.
Citation: Merlin Atchuthen, and S. Sankara Muthu Kumar (2022) How The Energy Sector Is Affecting Economic Growth? – Comparing The United Kingdom with India, European Journal of Accounting, Auditing and Finance Research, Vol.10, No. 9, pp.13-23
Keywords: Consumption, Energy Efficiency, GDP, Inflation, Unemployment, per capita growth
Causal Relationship between Financial Structure and Economic Growth in Contemporary African Economy: A Case Study of Nigeria from 1990-2018 (Published)
This study examined financial structure and economic growth of contemporary African economies; evidence from Nigeria. The specific objectives of this study are to investigate the effect of financial structure in bank credit to the private sector ratio (BC), market capitalization ratio (MC), liquid liability ratio (LLR), turnover ratio (TR) and value of traded share (VTS) on economic growth variable in Gross Domestic Product (GDP). The study was anchored on bank based and market-based theory. The study used secondary data obtained from World Bank Data Atlas and subjected them to Granger Causality technique to test the interaction between independent variables and the dependent variable at the 5% level of significance. The findings show that financial structure in BC, MC, LLR, TR and VTS had no significant effect on GDP in the contemporary African economies. The result further discovered that there was absence of long run relationship in the study. Thus, the study concludes that financial structure does not have significant effect on economic growth in the contemporary African economies. Hence, the study recommends that financial structure should strengthen and enhance availability of money supply to key sector of the economy thereby improving economic growth by ensuring financial deepening within the economies and providing viable economic environment for financial enhancement to boost investment activities within the Nigerian economy.
Keywords: Bank credit, GDP, Market Capitalization, economic growth, financial structure
The role of Islamic lending institutions in the economic development in Palestine (Published)
The study aimed to identify the role of Islamic lending institutions in the economic development in Palestine. The study examined the most important fields of economic development in Palestine, namely GDP, poverty and unemployment. The researcher used the analytical descriptive method. The study society consisted of two groups. The first was the employees of the Islamic lending institutions, and the second consisted of the beneficiaries of the services of the Islamic lending institutions. The study found many results. the most important of which was that the contribution of the Islamic finance institutions to the increase in the Palestinian GDP was high from the point of view of the employees in the institutions. In addition, its role was high in reducing the rate of unemployment in Palestine from the point of view of both employees in institutions and beneficiaries of its services. However, its role was moderate in reducing the poverty rate from the point of view of employees in institutions, but from the point of view of beneficiaries was high role. The study recommended the need for attention in the Palestinian areas with a high poverty rate, especially the Palestinian camps and the Palestinian countryside. As well as work on building a unified database for the distribution of poverty and unemployment. Also the need to activate the role of the unified Sharia’s supervisory board for Islamic banks to include Islamic lending institutions.
Keywords: GDP, Islamic lending institutions, Poverty, Unemployment, economic development in Palestine
The Impact of Capital Market Growth on Nigerian Economy (Published)
This study examined the impact of capital market growth on Nigerian economy between 2000 and 2013. Data were collected from Security Exchange Commission reports, Nigerian Stock Exchange Review Reports, Central Bank of Nigeria Statistical Bulletin respectively and ordinary least square method of regression was used with aid of SPSS version 16 software packages to analyze the data. Gross Domestic Product (GDP) was used as measure for economic growth while the capital market development are represented with Market Capitalization (MCAP), Numbers of Deals, All-Share Index (ALSI) and Total Value of Transaction (TVT).The result of the study reveals a strong correlation between economic growth and the independent variables. This is clearly shown in the very high R, R2, and adjusted R2 of 0.951, 90.4% and 86.1% respectively. With the exception of All Share Index, Total Value of Transaction and Numbers of Deals do not have significant impact on economic growth of Nigeria within the period of study. On the whole, 90.4% variation in economic growth in Nigeria is explained by the model. The long run relationship showed that only market capitalization impact significantly on the GDP. In the same manner the short run error correction model still indicates that market capitalization impacts positively on the economy. The study therefore recommends the pursuit of policies that would improve the depth and breadth of the Nigerian capital market so as to engender a rapid development of the market that would result in the economic growth and development of the economy.
Keywords: All share index, GDP, MCAP, Value of Transaction Capital Market
IMPACT OF THE NIGERIAN CAPITAL MARKET ON THE ECONOMY (Published)
There are elements upon which a nations’ economic development are dependent. The importance of Capital Market as one of the vehicles upon which most under-developed economies could grow cannot be overemphasized. The extent to which these economies experience the said growth is quite relative to the level of awareness and management of the market. Nigeria is not left out in the desire to maximize the gains of the capital market to boost its economy. This paper empirically examines the impact of the Nigerian Capital Market on the Nigerian economy looking at a 20 years period from 1992 to 2011. The Nigerian Capital Market was proxy as Market Capitalization against some variables of the economy such as Gross Domestic Product (GDP), Foreign Direct Investment, Inflation Rates, Total New Issues, Value of Transaction and Total Listing. Using the multiple regression analysis, we find that Capital Market has an insignificant impact on the Economy within the period under review. The study therefore advised that policies and measures that would boost investors’ confidence should be enshrined in the running of Nigerian Capital Market so that it could contribute significantly to the growth of Nigerian economy noting that all elements of the market are essential ingredients to the development of a nation.
Keywords: Capital market, Foreign Direct Investment, GDP, Inflation Rate, Total new issues, Value of Transaction, and Total listing
DOES INFLATION WEAKEN ECONOMIC GROWTH? EVIDENCE FROM NIGERIA (Published)
The study aims at evaluating the link between inflationary rate and economic growth in Nigeria. It also examines the nature and form of association between inflationary rate and exchange rate as well as interest rates from 1979 t0 2010.Ordinary least squares approach in the form of multiple regression was adopted in examining the relationship among the variables while the causalities were evaluated using Granger Causality model. It is pertinent to check whether the short run relationships would be sustained in the long run. To achieve this, Johansen and Juselius cointegration technique was adopted while the variables were adjusted for stationarity using the Augmented Dickey- Fuller (ADF) tests for unit root. It was found that inflationary rate is negatively related with real gross domestic product while exchange rates and interest rates are positively related with inflationary rate though not to a very significant extent. This is sustainable even in the long run and the implication is that when inflationary rate is rising, it affects the economy negatively as growth is dampened. On causality, at both lag 2 and lag 4, the study reveals that there is no causality between inflationary rate and real gross domestic product. However, at lag 2, there is a unidirectional causality running from inflationary rate to interest rate and also a unidirectional causality running from interest rate to real gross domestic product. At lag 4, there is a unidirectional causality running from interest rate to inflationary rate and from interest rate to exchange rate and also a unidirectional causality running from exchange rate to real gross domestic product. Consequently, efforts should be geared towards keeping inflationary rate at a single digit level to enhance the growth and development of Nigeria economy and to ensure that macroeconomic activities are kept alive
Keywords: Cointegration, Exchange Rate, GDP, Granger, Inflation Rate, Interest Rate