Asian Journal of Economic Modelling

How does economic growth impacted by economic freedom? A case study of the Middle East Region

Mohammed Ahmed Saeed — 2025-08-06

The study aimed to analyze the impact of economic freedom on economic growth and foreign direct investments concerning a country's political stability. The research employed a correlation design. It focused on 11 Middle Eastern countries over a period of 22 years. The study used the Autoregressive Distributed Lag (ARDL) method to estimate short- and long-term relationships. Results demonstrated that economic freedom significantly and positively affects economic growth in the long run, while civil liberties positively influence both economic growth and foreign direct investment in both the short and long term. Conversely, the study found that political rights have a negative impact on long-term growth, suggesting that in the Middle East, democratic expansion is associated with policy uncertainties that hinder growth. Additionally, the findings indicated that foreign direct investment in the Middle East is driven by civil liberties rather than political stability or economic freedom, highlighting the importance of institutional transparency. Overall, the findings emphasize the significance of institutional quality as a key driver of sustained economic performance in the region. Therefore, Middle Eastern governments should implement structural reforms to safeguard trade and economic freedoms.

Assessing microcredit's role in enhancing economic well-being among low-income individuals in Sub-Saharan Africa

Eric Effah Sarkodie — 2025-08-11

The study assesses the impact of microcredit on the economic welfare of low-income households across SSA from 2009 to 2019. The study used econometric methods, including panel regression models and the Generalized Method of Moments (GMM), to evaluate microcredit's role in enhancing economic well-being among low-income individuals in SSA. The choice of GMM was to address potential endogeneity. The results demonstrated the effectiveness of microcredit in alleviating poverty. The findings suggest that poverty reduction strategies should incorporate microcredit alongside improvements in education, infrastructure, and healthcare to achieve optimal outcomes. The study also identified education, population growth, per capita GDP, and transformed agriculture as critical factors in ensuring microcredit's effectiveness in improving economic well-being among low-income individuals in SSA. Microcredit is a valuable tool for enhancing economic well-being among low-income populations. Governments, financial institutions, and stakeholders must make deliberate efforts to sustain and expand microcredit in impoverished environments. Microcredit has the potential to address the low-income syndrome in SSA and reduce income inequality across social classes.

Examining the linkage and structural transformation effects of nickel industrialization: A case of South Halmahera, Indonesia

Gigih Fitrianto — 2025-08-11

The global surge in electric vehicle demand has intensified focus on green economies. Indonesia, home to the world's largest nickel reserves, enacted a nickel ore export ban to maximize domestic value-added through downstream industrialization, notably in South Halmahera, North Maluku. We examine the effects of nickel downstream processing by estimating multiplier impacts for mining and manufacturing sectors at regional and national levels, identifying structural transformation in South Halmahera, and assessing the competitiveness relative to North Maluku Province. Several methods were used, such as the Leontief inverse matrix of updated Input–Output (IO) and Interregional Input–Output (IRIO) tables, shift-share (SS), and location quotient (LQ). We find that manufacturing multipliers have grown substantially, but with significant leakage as benefits largely flow to other provinces. SS analysis also indicates rising productivity, labor reallocation into manufacturing, and the emergence of supporting sectors. LQ results confirm a sharp, although temporary, increase in manufacturing competitiveness that also boosts mining productivity. Despite transformative effects on nickel industrialization, much of the value-added potential remains uncaptured due to weak local integration. Developing reliable supporting industries is crucial to attaining economic diversification for long-term sustainable growth, considering the limited amount of nickel reserves.