Tag: GMM

DO EXPORTS OF OIL AND GAS STILL MATTER FOR REGIONAL ECONOMIC GROWTH OF SUMATRA, INDONESIA?

Saiful HURRI

Ph.D. Scholar in Economics, Faculty of Economics and Business, Universitas Syiah Kuala and Senior Lecturer, Universitas AlMuslim, Bireuen, Indonesia

saifulhurri3@gmail.com

Said MUHAMMAD

Professor, Faculty of Economics and Business, Universitas Syiah Kuala, Indonesia

said@unsyiah.ac.id

Abd. JAMAL

Senior Lecturer, Faculty of Economics and Business, Universitas Syiah Kuala, Indonesia

abdjamal@unsyiah.ac.id

M. Shabri Abd. MAJID*

Senior Lecturer, Faculty of Economics and Business, Universitas Syiah Kuala, Indonesia

mshabri@unsyiah.ac.id

*Corresponding author

Abstract

Although Indonesia ranks as the world’s 17th oil and 6th gas producing country, but its production level has been slowly declining since the last few decades. Amidst the decline of oil and gas production, thus it is important to explore how this impacts the regional economic growth. Specifically, this study attempts to empirically examine the impact of oil and gas and non-oil and gas exports on the regional economic growth of Sumatra, Indonesia over the period 2008-2017 using the generalized method of moments (GMM) approach. The study found that oil and gas exports were no longer contributed positively to regional economic growth. On the other hand, non-oil and gas exports have positively contributed to regional economic growth. This implies that to further promote the growth of the regional economy the focus should be given on the expansion, value-added creation and diversification of non-oil and gas commodities.

Keywords: Regional economic growth, Oil and gas sector, Non-oil and gas sector, GMM, Sumatra.

JEL classification: C32, F43, O11
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PAYMENT TECHNOLOGIES AND MONEY DEMAND: EVIDENCE FROM DYNAMIC PANEL

Payam Mohammad ALIHA

Ph.D candidate, National University of Malaysia (UKM), Malaysia

payammaliha@gmail.com

Tamat SARMIDI

Professor Dr. Faculty of Economics and Management, National University of Malaysia (UKM), Malaysia

tamat@ukm.my

Abu Hassan SHAARI

Professor Dr. Faculty of Economics and Management, National University of Malaysia (UKM), Malaysia

ahassan@ukm.my

Fathin Faizah SAID

Professor Dr. Faculty of Economics and Management, National University of Malaysia (UKM), Malaysia

fatin@ukm.my

Abstract

The banking system has experienced rapid and significant technological changes in recent years, including automated teller machines (ATMs), automated clearing houses, point of sale systems, telephone transfers, automatic bill payer accounts, and credit cards. The total effect of these innovations on money demand has been the subject of some empirical research; however, the individual effect of most of these innovations has not been estimated. This article attempts to partially bridge the gap in the empirical literature by providing empirical evidence relating to the effect of ATMs on money demand in world scale. The demand for money is a very important for the conduct of monetary policy and measurement of the effectiveness of monetary policy. This study attempts to analyse if financial innovations has impacted the demand for money using a system (the original equation and the transformed one) GMM method. In this study, money demand dynamics are examined empirically by using the Blundell–Bond estimator which reinforces Arellano–Bond by making an additional assumption that first differences of instrument variables are uncorrelated with the fixed effects. It makes it possible to introduce more instruments that improve the efficiency considerably. We estimate the demand for money (M2) for a panel of 215 countries and territories from 2004 to 2013. The elasticity of the demand for real money to ATM is about 0.01 percent meaning that the sensitivity of money demand to ATM is low. In other words, money demand is not elastic with regard to ATM.

Keywords: Money demand, ATM, Financial innovation, Dynamic panel data model, GMM

JEL classification: C13, C40, C51, E40, E44

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