Browsing by Author "Ajide, K."

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Does Governance Impact on the Foreign Direct Investment-Growth Nexus in Sub-Saharan Africa?
(Economics Faculty Zagreb, 2014) Ajide, K.; Adeniyi, O. A.; Raheem, I. D.
The central question this paper sought to tackle was “does the quality of institutions matter for the relationship between Foreign Direct Investment (FDI) and economic growth?” Using macroeconomic data on 27 Sub Saharan African (SSA) economies and six distinct measures of governance the findings showed that control of corruption, political stability and government effectiveness matter for the influence of FDI on economic growth in SSA. This key finding was found to be robust even in models where these three governance indicators were interacted with FDI. Furthermore, the results from threshold-type sample splitting showed that in the sample containing countries with a higher level of governance, the positive impact of FDI on growth has larger magnitude vis-à-vis the comparator group with poorer governance indicators. This significant threshold effects remained robust across specifications
Is There A Role for Governance in the Saving-Investment Nexus for Sub-Saharan Africa?
(Springer Science+Business Media, 2015) Raheem, I. D.; Ajide, K.; Adeniyi, O. A.
The study broke some yet to be explored ground in the literature on the Feldstein-Horioka (FH) puzzle. Precisely, it uncovered the role of institutions (particularly governance) in the saving-investment causal nexus using data on a panel of 37 sub-Saharan Africa countries, over the period spanning 1996 through 2010. Deploying a battery of panel estimators, the findings further lend support to earlier opinions on the bound of ranges of saving retention coefficients for the region. More specifically, the coefficients are -0.014, 0.200 and 0.21 in the ordinary least squares (OLS), fixed effects (FE) and random effects (RE) regressions, respectively. These estimates are largely synonymous to those reported for SSA in extant studies. Interestingly, considerable improvement was recorded in the saving coefficient from 0.20 to 0.361 when governance was interacted with saving. This concretely reinforces the useful role of governance in mobilizing saving for investment within these economies. Based on these findings, domestic resource mobilisation can be a veritable vehicle for plugging the substantial investment gap in these SSA economies. However, such policy thrust must be necessarily complemented by far-reaching governance reforms.
Output Growth Volatility, Remittances and Institutions
(Emerald Publishing Limited, 2015) Ajide, K.; Raheem, I. D.; Adeniyi, O. A.
Purpose – The purpose of this paper is to empirically examine the role of institutions on the remittances– output growth volatility relationship. Design/methodology/approach – The data set of this paper is limited to 71 remittances recipient countries. In an attempt to deal with endogeneity issues, the paper adopts the use of system generalized method of moment (GMM). Findings – First, in consonance with earlier studies, the growth volatility reducing influence of remittances flows was established. Second, unlike the extant literature, the growth volatility reduction potential of remittances was found to be more pronounced in the presence of well-functioning institutions. Finally, the interaction of remittances with our six institutional quality measures showed that growth volatility reduced considerably with better institutions. Practical implications – In terms of policy, remittances recipient countries need to simultaneously pursue economic and governance reforms. Both of these will enhance the counter-cyclicality of remittances and possibly other capital flows. Originality/value – Substantial efforts have been devoted to investigating the impact of remittances on output growth volatility, while very little research attention has been devoted to analysing the impact of institutions on the remittances– output growth volatility nexus.
The Role of Institutions in Output Growth Volatility- Financial Development Nexus: A Worldwide Study
(Emerald Publishing Limited, 2016) Raheem, I. D.; Ajide, K.; Adeniyi, O. A.
Purpose – The purpose of this paper is to investigate the role of institutions in the financial development-output growth volatility nexus. It provides new channels through which financial development can dampen the output growth volatilities of the countries under investigation. Design/methodology/approach – A comprehensive data set for 71 countries covering the period from 1996 to 2012 and the System GMM approach were used. The choice of the methodology is to deal with endogeneity issues such as measurement errors, reverse causality among other issues. Findings – A number of findings were emanated from the empirical analysis. First, the estimates provided evidence of the volatility-reducing effect of financial development. Second, institutions do not have the same reducing influence on output growth volatility. Third, the interaction of financial development and institutions showed that the output volatility reduction arising from financial development is enhanced in the presence of improved institutions. Research limitations/implications – The policy implications derived from this study are in twofolds: first, it is important for policymakers to formulate policies that would ensure and enhance the development of the financial sectors, since its importance in minimizing output volatility has been established. Second, institutional quality should be developed so as to further enhance the growth volatility-reducing influence of financial development. Particularly, institutions should be improved along the multiple dimensions captured in the analysis. Originality/value – To the best knowledge, the novelty of this study to the literature is the introduction of institutions, which is hypothesized to increase the dampening effects of financial development in output growth volatility.