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While many recent studies have used the ecological footprint as a comprehensive indicator of environmental degradation instead of CO2 emission, these were mainly focused on consumer responsibility. This study, however, aims to cover both aspects of consumption and production to elicit a more comprehensive understanding. Furthermore, this study addresses another information gap by analyzing the effect of aggregated and disaggregated economic activities on the environment. Panel data were used and sourced from 92 countries classified by income group spanning 1992 to 2015. Comprehensive financial development indicators, energy structure, energy intensity, trade openness, and urbanization were considered in examining their impacts on environmental degradation. The pooled mean group estimation was adopted in examining the long-run and short-run relationship between variables. The main findings suggest that financial development promotes green investment in high-income and upper-middle-income countries but increases degradation in lower-middle and lower-income countries. Renewable energy improves the environment in general, and energy intensity is a crucial factor in environmental modeling across all groups. Most importantly, a U-shape relationship is found on both the consumption and the production side for all income groups except for lower-income countries (inverse U-shape) on the production side. Interestingly, a U-shape relationship was found in high-income and upper-middle-income countries in the industrial sector, but a monotonic relationship in the service sector. A U-shape relationship was found for the industrial and service sectors in lower-middle-income and lower-income countries, but an inverse U-shape for agriculture outputs in lower-middle-income countries. This finding suggests the need to shift from fast-growth strategies to strategic growth planning that considers the nature of the relationship between economic sectors and the environment while diversifying the economic structure to allow for the recovery of natural capital.

Palm oils have been proven to have the highest yield among vegetable oils, which is one of the critical factors in ensuring global food security. However, the world palm oil market has not been entirely utilised due to intervention policies that disrupt the global trade flow. Hence, this study aims to identify the technical efficiency of palm oil exports and then analyse the export potential of two leading producers and exporters of palm oil, Malaysia and Indonesia. A stochastic frontier model (SFM) has been used to estimate the level of technical efficiency across two countries for a sample of 59 major palm oil importing countries during 2009–2019. Palm oil export potential is then calculated using the value of technical export efficiency obtained from the SFM. The main findings revealed the technical inefficiency of world palm oil exports. Comparing the two countries, the Indonesian average technical efficiency value is higher than Malaysian throughout the year. Moreover, the technical efficiency estimates reveal that Malaysia and Indonesia dominate different markets, except in the Netherlands. In terms of export potential, the study found that both major exporting countries of palm oil have great potential to tap more into the same countries, namely China, India, Thailand and the United States. The policy implications of this study suggest that policymakers from both countries should set up a new combined strategy to maximise the palm oil export to their trading partners. Low technical efficiency values in several importing countries show great potential to explore further. Hence, there is a vast potential market for palm oil export to be tapped in those countries.

When the government creates state-owned enterprises (SOEs), one of the primary purposes is to reduce its financial burden in the long run, also called financial sustainability. Nonetheless, previous research has pointed out that SOEs struggle to achieve financial sustainability due to government intervention. In this study, we examine the relationship between the financial sustainability of SOEs and government intervention in Malaysia. We take a novel approach, using share ownership to measure government intervention. Our results show that the threshold effect of government ownership on financial sustainability in Malaysia is around 27%. The findings prove that the SOEs of an emerging country could reach financial sustainability only if the government ownership is below the threshold. Finally, this study discusses the policy implications of our findings for SOEs. The government of Malaysia should propose a road map to gradually reduce its ownership of SOEs below the threshold.

This paper investigates the spillover effects of Chinese real and monetary sector shocks on the Belt Road Initiative (BRI) economies. The study adopted a panel vector autoregression (PVAR) estimation technique to analyse the dynamic propagation of Chinese shocks in the real sector (gross domestic product (GDP) and trade openness (OPEN)) and monetary sector (nominal interest rate (NIR)) for a sample of 50 BRI countries from 2000 to 2017. The main results revealed that Chinese income shocks positively spill over to all macroeconomic variables except BRI countries’ consumer price index (CPI). However, the Chinese trade openness shock only has a temporary positive spillover to BRI international trade and a temporary negative spillover on its monetary policy. In addition, the Chinese monetary policy shock has a negative spillover on GDP and a positive spillover on CPI in BRI economies. Chinese shocks, however, do not constitute a significant source of variation in any interest variable. As explained by the Chinese income shock, the BRI interest rate is the highest percentage of variable variation accumulated over time. Further, the highest variation of Chinese trade shock is BRI trade openness, and lastly, the highest variation of Chinese interest rate shock is CPI in BRI economies. The beggar-thy-neighbour effect may dominate the positive trade effect and is a negative impact of the Chinese shocks. Hence, BRI economies should alleviate the adverse shocks since the upcoming rapid growth from the Chinese has disturbed the BRI economies. Our results reveal the importance of Chinese development on BRI partners’ economies and the significance of Chinese shocks in real and monetary sectors in assisting policymakers in designing international and monetary policy for BRI economies.

This paper estimates the comovement between two leading cryptocurrencies and the G7 stock markets. It then attempts to explain the comovement with the rational investment theory by examining whether it is driven by market uncertainty measures, public attention to COVID-19, and the government’s containment and health responses to COVID-19. Wavelet Coherence heatmaps show that the stock-cryptocurrency comovements increase significantly and positively during the pandemic, indicating that cryptocurrencies lose their safe haven properties against stocks during the heightened market uncertainties. Over the longer investment horizons, Bitcoin reemerges as a safe haven or strong hedger while Ethereum’s properties weaken. Seemingly Unrelated Regression results reveal that the stock-cryptocurrency comovements are rationally explained by market uncertainties, government responses to COVID-19, and market fundamentals. However, the comovements are also driven by the fear of COVID-19 to a certain extent. Our findings offer valuable insights for investors considering cryptocurrencies to rebalance their equity portfolios during market distress. For policymakers, the Economic Policy Uncertainty (EPU) results suggest that government policies and regulatory frameworks can be used to regulate speculation and investment activities in the cryptocurrency market.

Movements in palm oil price give important signals to various stakeholders of the palm oil industry in Malaysia. Thus, understanding external and internal factors that may affect the palm oil price is vital to the industry players for sustainability of their activities. This study investigates relative importance of external and internal shocks on the movement of palm oil price in Malaysia. Employing a structural vector autoregressive (SVAR) model on quarterly data from 1990 to 2019, the findings reveal that external shocks are more dominant in affecting the palm oil price. Shocks to the crude oil price, the prices of substitution goods (soybeans oil, rapeseed oil, and sunflower oil), the world palm oil price, and foreign income significantly affect the palm oil price in the short and medium run. The results also indicate that a shock to soybean oil price has a more profound effect on the palm oil price than a shock to rapeseed oil or sunflower oil prices, respectively. Likewise, shocks to incomes from India as well as from Netherlands create greater impacts on the palm oil price than a shock to income from the other trading partners, respectively. The study has shown the importance of external factors in affecting the palm oil industry.

This study examines whether a debt-to-GDP threshold exists in the public debt and economic growth relationship for 20 Middle East and North Africa (MENA) countries from 1990 to 2016 using the threshold estimation technique. The empirical results reveal that there is a threshold effect in the public debt and economic growth relationship. The MENA region’s debt-to-GDP threshold value as a developing region is lower than the debt threshold computed by earlier studies for developing countries. We found that the effect of public debt on economic growth is significant and positive only below the threshold value of debt-to-GDP. More precisely, debt has a promoting influence on economic growth when the debt is less than 58% of the GDP. This finding indicates that the relationship between public debt and economic growth is contingent on the debt-to-GDP ratio. Importantly, policymakers need to be more prudent when establishing a policy regarding debt issues.

This paper examines the effect of financial inclusion on the firm growth of the manufacturing sector (513 firms) in selected ASEAN countries (Malaysia, Philippines, and Vietnam) using a cross-section threshold estimation technique. The levels of financial inclusion across firms were measured based on the distribution of financial services (access to credit). The main findings revealed that there is a non-monotonic effect of financial inclusion on the firm’s growth. These findings show that the impact of financial inclusion on firm growth in the manufacturing sector is significantly positive below a threshold point, and turns to significantly negative after a certain threshold point has been reached. These new findings suggest that manufacturing firm owners and banking institutions should deepen their financial inclusion efforts, and limit the distribution of credit access within the optimum value or threshold level in promoting the growth of the firm.