Asian Journal of Economic Modelling

Phosphate price fluctuations and economic growth in Morocco: An ARDL-bounds approach

Mehdi Kharibouch, Zineb El Aissaoui, Atman Dkhissi, Youssef El Ghrabli — Tue, 23 Sep 2025 00:00:00 -0500

This research examined the relationship between international phosphate price volatility and economic growth in Morocco for the 1994-2020 period, using the Autoregressive Distributed Lag (ARDL) bounds testing approach to capture the short-run and long-run dynamics. The data used is annual in frequency and includes yearly time series of several key macroeconomic indicators, including nominal GDP, phosphate prices, CO₂ emissions, fertilizer consumption, gross fixed capital formation, and unemployment. The study identified that phosphate price changes significantly affect Morocco’s short-run economic growth but have no statistically significant long-run impact on GDP. The increase of phosphate prices in the short run results in higher export revenues, but long-lasting price volatility limits economic diversification and environmentally sustainable options. Several structural inefficiencies were also found in Morocco’s economy, including the limited effect of capital allocation and high levels of unemployment that restrict sustainable growth. The study identified several key aspects that should be considered by Morocco as it looks to reduce its dependency on the phosphate sector, including economic diversification with a commitment to sustainable resource management across the economy, such as the use of human capital investments, green technologies, infrastructure investments, and appropriate changes to governance and policy. The study highlights the literature contributions of Morocco as an exceptional specific case, being the number one country for phosphate with a highly developed phosphate sector, and emphasizes that sustainable resource expenditure and volatility, drawn from effective policy responses to resource price volatility, are needed to support sustained human development.

Sectoral linkages and spillover effects: Can growth in manufacturing stimulate wider employment in South Africa?

Kazeem Abimbola Sanusi, Zandri Dickason-Koekemoer — Tue, 04 Nov 2025 00:00:00 -0600

This study examines whether growth in manufacturing output stimulates employment across South Africa’s broader economy, focusing on sectoral linkages and spillover effects. Anchored in the structural transformation literature, the analysis investigates the extent to which manufacturing acts as a catalyst for inclusive job creation beyond its own sector. Using quarterly time series data from 1963 to 2024 and applying a Structural Autoregressive Distributed Lag (SARDL) model, the study estimates both short-run and long-run effects across six sectors: manufacturing, construction, mining, financial services, trade, and public services. To account for exogenous shocks, interaction terms between manufacturing output and a COVID-19 dummy variable are included. The results reveal strong positive spillovers from manufacturing to employment in the construction, trade, and financial services sectors, while mining and public services exhibit limited responsiveness. Pandemic-induced disruptions significantly weakened these linkages, as evidenced by negative and significant COVID-19 interaction effects. The findings underscore manufacturing’s pivotal role in employment generation and support policies promoting manufacturing-led industrialization and intersectoral integration. This study contributes to debates on structural transformation and labor market dynamics in emerging economies. The study confirms that manufacturing remains a cornerstone of employment generation in South Africa, both within the sector and across the wider economy.

Fiscal decentralization and water and sanitation provision: Evidence from Pakistan

Abdul Qayyum, Wee-Yeap Lau, Nur Hairani Abd Rahman — Fri, 14 Nov 2025 00:00:00 -0600

Fiscal decentralization offers promise in enhancing the delivery of public services. However, its success relies on good governance, accountability, and locality-specific policies. This study examined the influence of fiscal decentralization on the provision of water and sanitation services in Pakistan. It targets both provincial-level and urban-rural differentials during 1990–2020. Based on secondary panel data and using the Pooled Mean Group (PMG) estimator in a Panel ARDL environment, the study found that provincial spending has a negative relationship with rural area sanitation services and that provincial revenue has a negative relationship with rural region water services in the long run. In the short term, provincial spending has a positive impact on sanitation facilities at the aggregate level, as well as within the rural region, and provincial revenue has a positive effect on urban sanitation services. Additional provincial-level analysis identifies varied impacts of fiscal decentralization on water and sanitation services. The study suggests an increase in financial transparency, building institutional capacity, improving infrastructure, drainage networks, and ensuring timely and equitable transfers of revenues to provincial governments. The study offers policy suggestions to practitioners for the implementation of decentralization approaches to yield enhanced water and sanitation outcomes in Pakistan.

Do good neighbors lead to lower greenhouse gas emissions across countries? A spatial analysis

Kenneth Ray Szulczyk, Jessy Angelica, Yeng-May Tan — Mon, 17 Nov 2025 00:00:00 -0600

This study examines how spatial interdependence helps reduce greenhouse gas (GHG) emissions across 68 countries from 1990 to 2023. The researchers hypothesized that a country's environmental policies and GHG emissions are influenced by its neighbors, and their findings support this. The study used spatial fixed effects, spatial pooled, and spatial random effects models to analyze the effects of several variables on GHG emissions. The results show that a neighbor's high GHG emissions can actually help a country lower its own. Furthermore, the study found that energy consumption increases emissions, whereas innovation (patents), renewable energy, and trade openness all decrease them. However, the study found no evidence to support the Environmental Kuznets Curve or the Pollution Haven Hypothesis. The findings emphasize the importance of regional cooperation and the diffusion of public policies and knowledge to combat climate change, aligning with the United Nations' Sustainable Development Goal 13. The study highlights the vital role of coordination between countries in addressing global warming.

Determinants of technical efficiency in the ASEAN manufacturing industry

Jee Kouk Hiong, Rossazana Ab-Rahim — Mon, 17 Nov 2025 00:00:00 -0600

This study investigates the determinants of technical efficiency in the manufacturing sector across six ASEAN economies Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam over the period 2000–2022. The purpose is to assess cross-country variations in efficiency performance and identify key macroeconomic and demographic drivers that shape long-term productivity. The analysis adopts a two-stage framework that combines Data Envelopment Analysis (DEA) with Tobit regression. The DEA results reveal substantial heterogeneity, with Singapore consistently achieving the highest efficiency, while Vietnam persistently lagged behind. Although an overall upward trend is observed, efficiency in Indonesia, Thailand, and Vietnam declined notably after the COVID-19 pandemic, reflecting the sector’s vulnerability to external shocks. The Tobit regression results show that foreign direct investment (FDI) is a significant positive determinant, with a 1% increase in FDI inflows enhancing efficiency by 0.44%. In contrast, macroeconomic instability and demographic pressures undermine performance, as a 1% rise in inflation reduces efficiency by 1.14%, and a 1% increase in the elderly population share decreases efficiency by 2.88%. These findings highlight the importance of policies that promote sustained FDI inflows, stabilize inflation, and address aging through labor market reforms and productivity-enhancing measures. Strengthening manufacturing efficiency is essential for sustaining long-term growth, boosting global competitiveness, and advancing ASEAN’s regional integration agenda.

Determinants of financial distress in Nigerian deposit money banks: A panel modelling approach

Wisdom OKERE, Cosmas AMBE — Tue, 18 Nov 2025 00:00:00 -0600

This study examines the determinants of financial distress of listed deposit money banks (DMBs) in Nigeria from 2010 to 2022. Founded on the financial ratio theory and integrating behavioral managerial traits within the framework, the research employs a quantitative approach, using panel data from eight publicly listed DMBs and applying the panel ordinary least squares regression (Panel OLS) and robust standard errors and Fully Modified Ordinary Least Squares (FMOLS) to capture long-run dynamics. Findings reveal that capital adequacy, exchange rate, and inflation rate significantly increase the likelihood of financial distress, while bank size significantly reduces financial distress due to economies of scale. The FMOLS estimates corroborate the significance of exchange rate and inflation rates while highlighting asset quality and deposit structure as key long-term determinants. GDP and liquidity ratio remain insignificant, and managerial overconfidence exerts no significant impact. The findings pinpoint that macroeconomic and firm-specific factors drive financial distress in DMBs. Therefore, policymakers are advised to strengthen capital regulation, enforce thorough asset quality controls, and implement macroeconomic policies that support growth in the financial sector. This research contributes to the body of knowledge on financial stability in Sub-Saharan Africa, offering insights for mitigating distress in emerging financial markets.

Impact of digital economy on enterprise innovation in China: Evidence from a panel data set of Chinese companies

Yunfei Long, Chonlavit Sutunyarak — Wed, 19 Nov 2025 00:00:00 -0600

As a new driving force for high-quality development, the digital economy is reshaping knowledge diffusion and corporate innovation models, becoming a key force in optimizing resource allocation, improving operational efficiency, and driving innovation. This paper uses data from a sample of 30,391 Chinese enterprises from 2015 to 2022, employing a two-way fixed-effects model and a mediation effect model to empirically examine the impact of the development of the digital economy on innovation in Chinese enterprises. The results show that the digital economy significantly increases patent applications, confirming its role as a catalyst for corporate innovation. Mechanism analysis suggests that R&D investment plays a mediating role of approximately 20%, highlighting its importance in transforming digitalization into innovative outcomes. Heterogeneity analysis further demonstrates that this effect is more pronounced in non-state-owned enterprises. At the industry level, health and social work, wholesale and retail, and manufacturing benefited the most, while real estate and construction were negatively impacted. The contributions of this study are: first, it expands the empirical research on the relationship between the digital economy and innovation, providing a new perspective for digital empowerment of innovation; second, it identifies R&D investment as a significant mediating mechanism, deepening our understanding of the innovation-driven mechanism; third, through heterogeneity analysis, it highlights industry and ownership differences, providing a reference for differentiated policy making.

Digital transformation and firm performance among Chinese manufacturing firms: A moderated-mediation model

Ma Guangxia, Hartini Jaafar — Wed, 19 Nov 2025 00:00:00 -0600

This paper examines how digital transformation (DT) influences the performance of Chinese manufacturing firms within the context of industrial upgrading. It considers both the short-term and long-term effects of DT and the mechanisms through which these effects unfold. Using panel data from A-share listed manufacturing firms between 2014 and 2023, the study develops a moderated mediation model in which resource allocation (RA) and innovation capability (INC) serve as mediators, while internal control (ICON) moderates the mediation paths. The findings reveal that DT has the most significant and apparent impact on firm performance, with a cumulative effect: the more intensive the DT efforts, the greater the benefits. RA exerts a direct influence on short-term performance (FPS), while INC plays a critical role in driving long-term performance (FPL). ICON demonstrates a two-pronged effect: it amplifies the efficiency impact of RA on FPS while constraining INC’s flexibility in the short term, but over time, it fosters FPL through innovation transformation. These findings suggest that firms can benefit most from DT when digital initiatives are aligned with governance and resource allocation and combined with efforts to build innovation capability. Such alignment not only translates short-term efficiency gains into immediate improvements but also ensures lasting competitiveness through sustained innovation.