RP-Department of Applied Economics

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Browsing RP-Department of Applied Economics by Subject "Autoregressive distributed lag model"

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    Gender Inequality, Financial development and Economic Growth in Kenya
    (2014) Onuonga, S.M.
    Closing the gender gap is one of the Millennium Development Goals. Because of this, and due to many benefits of closing the gender gap, the role of gender inequality on economic growth has received a lot of attention in empirical work. Gender in Kenya is seen in many areas including distribution of resources within households, division of labor between paid and unpaid labor, access to public services and power structure of the country. This paper analyzes the relationship among gender inequality, financial development and economic growth using time series data of the period 1980-2012 of Kenya. Gender inequality affects the income and children`s education negatively. The results for this paper will assist development policy makers set gender development policies that reduce gender gaps and those that develop the financial sector. Different from most of the earlier studies this paper used econometrics approach to study the relationship among the variables. The study used the Autoregressive distributed lag model to investigate long-run relationship among the variables. Secondary data was used covering the period 1980 to 2012.The results of the study show that there is a long-run relationship among gender inequality, financial development, government expenditure, investment, economic growth and trade openness. The findings also revealed that gender inequality impacts negatively on economic growth while financial development impacts positively on economic growth. If gender inequality increases by one percent, per capita income of Kenya reduces by approximately 10.2 percent. Further results indicate that government expenditure, investment and trade openness impacts positively on economic growth. The results give evidence that wider gender gaps reduce economic growth while financial development enhances economic growth. The results suggest that increased government expenditure on promotion of social economic status of women, will increase the country`s economic growth
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    The Impact of Financial Development and Economic Growth on Environmental Quality of Kenya
    (International Knowledge Sharing Platform, 2020) Onuonga, Susan Moraa
    Of recent times many countries are suffering from environmental problems such as global warming and emission of greenhouse gases. Emissions of carbon dioxide as been recognized as the major contributor to global warming and climate change. This paper examines the long run relationship among the variables environmental quality, financial development and economic growth in Kenya using time series for the period 1970-2019. Autoregressive distributed lag bounds test is used to investigate long run relationship and Granger causality method is used to test for causality among the variables. Empirical results indicate that there is long-run relationship among the variables. Long run results suggest that increases in financial development, lagged CO2, energy consumption, population growth, and trade openness significantly worsens environmental quality in Kenya. Natural resources significantly improve environmental quality in Kenya. According to the results the relationship between CO2 and financial development in Kenya is non-linear suggesting presence of EKC between CO2 and financial development. The empirical results confirm that the Environmental Kuznets curve does not exist between CO2 and economic growth in Kenya in the long run. Short-run results also show that financial development, lagged CO2, FDI, population growth, and trade openness increase CO2 emissions while natural resources reduce it. Causality results show unidirectional causality running from financial development to environmental quality and from CO2 to GDP. According to the findings, there is evidence of neutrality hypothesis between financial development in Kenya and economic growth. Existence of long run relationship suggests that the government of Kenya needs to implement appropriate environmental policies that reduce pollution during economic growth. The government should set policies and guidelines to the financial sector so that the sector offers credit to firms that reduce air pollution.