RP-School of Economics

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Browsing RP-School of Economics by Subject "ARDL"

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    Determinants of Sustainable Development in Kenya
    (IISTE, 2017) Kaimuri, Belinda; Kosimbei, George
    This study investigated the determinants of sustainable development in Kenya using annual data for Kenya for the period of 1991 to 2014. Adjusted net savings rate (ANSR) was used as a proxy sustainable development. The study used the autoregressive distributed lag model (ARDL) for the analysis and the bounds test for cointegration to test whether a long run relationship exists between the study variables - household consumption per capita, unemployment rate, resource productivity, energy efficiency, real gross domestic product per capita and terms of trade. The main result from the study was that a long run relationship exists between the variables. Secondly, the estimated coefficients of household consumption per capita negatively impacts sustainable development in the long run while unemployment rate and energy efficiency both negatively influence sustainable development in the short run. Resource productivity, real gross domestic product per capita and terms of trade are insignificant in determining sustainable development. The results suggest that developing the economy while stimulating savings and promoting a contractionary fiscal policy on public deficits will promote sustainable development.
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    Government Infrastructure Spending and Economic Growth in Kenya: An Autoregressive Distributed Lag Model Approach
    (IPRJB, 2023) Susan K., Matheka; Etyang, Martin
    Purpose: Since independence, the Government of Kenya has pursued many objectives, one being economic growth. Over the previous few many years, government expenditure has been developing faster than the GDP growth. Infrastructure, one of the components of public spending, has also experienced tremendous growth in government spending and development, which has not been directly reflected in the GDP growth rate. Following such situation, it calls for analyzing the impact that government infrastructure expenditure has on economic growth in Kenya with a focal point on three sectors beneath infrastructure that the public sector spends closely on; transport, energy and fuel, and Information Communication and Technology (ICT). The study's overall objective is to find out the effects of government spending on the three sampled sectors of government infrastructure on economic growth in Kenya and then draw policy implications from the findings. The specific objectives were; to investigate the effect of transport infrastructure expenditure on economic growth in Kenya, to examine the effect of energy & fuel infrastructure expenditure on economic growth in Kenya, and to examine the effect of ICT infrastructure expenditure on economic growth in Kenya. Further, Bounds F-test to cointegration as well as the Autoregressive Distributed Lag Model (ARDL) were used to realize the objectives. Methodology: The data was collected covered 1990 – 2020 for the three sectors of infrastructure: transport, energy & fuel, and ICT. Several tests on the time series data were carried out on the secondary data obtained, after which (ARDL) was employed in analysing the data. Findings: The outcome showed that government expenditure on transport, energy, fuel, and ICT infrastructure sectors affected economic growth either in the short or the long run. Based on the ECM regression findings, the long-run regression outcome revealed that expenditure on energy and fuel promotes economic growth. On the contrast, the findings showed that government expenditure on transport and ICT sectors exhibited a negative effect on GDP growth rate. Public expenditure on transport and ICT infrastructure sectors positively impacted economic growth in the short term, while the energy and fuel sectors exhibited a negative impact on GDP. Other control variables inclusive of trade openness and FDI showed either a positive or negative effect on economic growth either in long or short run. Inflation, particularly, exhibited a negative effect on GDP in the long run, in addition to within the short run. Unique Contribution to Theory, Practice and Policy: Based on the empirical findings, this study validates the Keynesian theory which stipulates that public expenditure positively contributes to economic growth. Based on this theory, public expenditure is an exogenous factor capable of being applied as a policy instrument in promoting economic growth.
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    Tea Production Response to Climate Change in Kenya: An Autoregressive Distributed Lag Approach.
    (African Journal of Economic Review, 2022-01) Kariuki, George Mbugua; Njaramba, Jennifer; Ombuki, Charles
    Tea sector plays a critical role in socio economic development in Kenya. It is a leading foreign exchange earner, a major source of livelihood for most rural communities and significantly contributes to poverty reduction. However, in the last three decades there has been , unstable trends in tea production that has been linked to climate driven stresses. Over the last two decades, tea producing areas in Kenya have been exposed to extreme climate events that include temperature rise, eractic rainfall and growing incidence of extreme weather events such as hail storms, drought and frost. These events are expected to have adverse effects on the largely rainfed tea production with potentially irreversible socio economic effects. This study sought to ascertain the effects of climate change on tea production in Kenya while controlling for economic incentives. The study adopted the Autoregressive distributed lag econometric modeling approach using data for the period between 1979 and 2019. The findings indicate that rainfall being experienced in the usual dry period of January and February, price of tea, and area under tea crop, have a positive and significant effect on tea production. However, rainfall variability, rainfall amount in extended long rain periods, maximum temperature, spending on agricultural development, real effective exchange rate, and price of fertilizer have a negative effect on tea production. Given the negative effects of climate change on tea production, there is a need for collaborative efforts towards developing definite, viable and sustainable adaptation options targeting tea farming.
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    Trade Openness and Female Employment: An Empirical Sectoral Analysis from Kenya
    (International Academic Publisher, 2022) Gachoki, Charles Munene
    Gender equality promotes a country’s development potential and is therefore considered to play an important role in economic development. This study probes the effects of economic determinants on female employment in the agricultural sector in Kenya by considering economic and social factors. The study employs the ARDL approach for the period 1980-2019. There is a longterm link between economic and social determinants and female employment in the agricultural sector, which has been validated empirically. The results indicate that per capita income, inflation and exports encourage female employment, while foreign direct investment, fertility rate and imports impact female employment in the agricultural sector negatively in Kenya. The main policy implication based on results is that trade openness in form of exports should be promoted to increase female employment in the agricultural sector in Kenya. There is a need to shift Kenya's imports from food-based to capital-intensive imports to promote women's employment in the agricultural sector. IJSB Accepted 19 August 2022 Published 25 August 2022 DOI: 10.5281/zenodo.7022792