Month: December 2017

USING ARDL APPROACH TO COINTEHRATION FOR INVESTIGATING THE RELATIONSHIP BETWEEN PAYMENT TECHNOLOGIES AND MONEY DEMAND ON A WORLD SCALE

Payam MOHAMMAD ALIHA

Ph.D candidate, National University of Malaysia (UKM), Malaysia

payammaliha@gmail.com

Tamat SARMIDI

Associate Professor Dr. at Faculty of Economics and Management, Universiti Kebangsaan Malaysia (UKM), Malaysia

tamat@ukm.edu.my

Abu Hassan SHAAR

Professor Dr. at Faculty of Economics and Management, Universiti Kebangsaan Malaysia (UKM), Malaysia

ahassan@ukm.edu.my

Fathin FAIZAH SAID

Dr. at Faculty of Economics and Management, Universiti Kebangsaan Malaysia (UKM), Malaysia

fatin@ukm.edu.my

Abstract

This paper estimates the relationship between financial innovation and money demand in world countries with a focus on the number of automated teller machines (ATMs) using the ARDL approach to cointegration. In this study, we estimated a conventional money demand model with currency in circulation (M2) as dependent variable and gross domestic product (GDP, constant 2005 US$), interest rate (IRATE), the number of automated teller machines per 100,000 adults (ATM) to take into account for the effects of financial innovation as dependent variables. It covers 215 countries and territories over the period 2004-2013. This paper adopts the bounds testing procedure developed by Pesaran et al. (2001) to test the stability of the long-run money demand and determine the short-run dynamics for all of the countries as a whole. The empirical evidence points to the existence of long-run and cointegrating relationships between variables meaning all of these variables move together in the long run. The speed of adjustment toward long run equilibrium is – 0.4345 which means that the whole system gets back to long run equilibrium at the speed of 43.45 percent. The results confirm that in the short-run, ATM does not impact money demand.

Keywords: Money demand, Financial innovations, Stability, ARDL, Cointegration.

JEL classification: R21, R32

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EXAMINING THE EXISTENCE OF CO2 EMISSION PER CAPITA CONVERGENCE IN EAST ASIA

Kenichi SHIMAMOTO

Hirao School of Management, Konan University, Nishinomiya, Japan
Correspondence details: Dr. Kenichi Shimamoto Hirao School of Management, Konan University, 8-33 Takamatsu-cho,  Nishinomiya, Hyogo, Japan 663-8204

kenichi@center.konan-u.ac.jp

Abstract

The ‘flying geese’ model of industrial upgrading depicts the income convergence or economic development convergence in East Asia. However, how does this convergence of economic development effect the environment? The surge in the consumption of fossil fuel is causing a large increase in emission of CO2. Global warming affected by CO2 emission poses as a serious threat to East Asian countries with large coastal areas exposed to the rise in sea level. This paper examines CO2 emission per capita to investigate the existence of environmental convergence in East Asian countries and predicts future distribution using deviations, interquartile range, kernel densities distribution, time series approach, β convergence analysis and the Markov chain approach. As a result, no meaningful evidence of convergence was found in the historical evaluation and a non-compressed ergodic distribution was found in the future prediction for CO2 emission.

Keywords: environmental convergence, East Asia, CO2

JEL classification: Q53, Q56, R10

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