Public spending and economic growth: The role of institutions in Ivory Coast

2024-01-17T11:27:41+00:00

Several studies have analysed the effects of public spending, institutions and interaction between public spending and institutions on economic activity. This existing literature has ignored the effect of institutional shocks on the relationship between public spending and economic growth. To fill this gap, the current study aims to estimate the effects of public spending, institutional factors and institutional shocks on GDP per capita in Ivory Coast. It uses annual data that covers the period 1984-2019. We exploit the principal component analysis technique to construct an institutional composite index. We then estimate two Nonlinear AutoRegressive Distributed Lag models with interaction variables such as institutional index and public spending, corruption and public spending. The empirical results reveal symmetric effects of long-run institutional and corruption shocks on GDP per capita. In contrast, the effects of institutions are asymmetric in the short term. Negative institutional shocks worsen GDP per capita in the short term, as do positive corruption shocks in the long term. Similarly, public spending promotes economic growth, but neither institutions nor corruption significantly accentuate its effects. These results imply that improving the efficiency of public spending requires a prior improvement in the institutional framework and, above all, in the fight against corruption.

Examining the dynamics of risk, performance, and volatility during COVID-19: Evidence from Moroccan stock market

2024-03-21T07:03:37+00:00

This study delves into the repercussions of the COVID-19 pandemic on the Moroccan stock market, with a specific focus on the MASI index and sectoral indices. The examination en-compasses distinct pre-COVID and during-COVID periods, shedding light on the market’s evolution, marked by unique phases and fluctuations. Notably, the MASI index experienced a significant downturn in March 2020, indicative of the pandemic’s disruptive impact on investor behavior. Despite this setback, the market showcased remarkable resilience, staging a swift recovery and surpassing pre-crisis levels by the close of 2020. This rebound can be attributed to various factors, including historically low bond yields, the initiation of vaccination campaigns, and the resumption of dividend payouts by the banking sector. Our findings bring forth a nuanced understanding of performance and risk dynamics across individual sectors. Moreover, there is a noteworthy surge in correlations between sectoral returns during the COVID-19 period, limiting diversification options for investors and exposing them to heightened risks. The volatility patterns, analyzed using GARCH models, underscore the dynamic nature of the MASI index, exhibiting stability in the pre-pandemic phase and a transient disturbance during the initial pandemic shock. This study contributes to the existing body of literature on the global financial impact of COVID-19, providing valuable insights into the Moroccan context. The results emphasize the significance of comprehending sector-specific vulnerabilities and market dynamics for both investors and policymakers. In navigating the uncertainties of the post-pandemic era, these insights offer crucial perspectives for market participants to make informed decisions and adapt optimal strategies.

Asian Journal of Economics and Empirical Research

Public spending and economic growth: The role of institutions in Ivory Coast

Examining the dynamics of risk, performance, and volatility during COVID-19: Evidence from Moroccan stock market