Browsing by Author "Muhammad, Mansur"

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    Analyzing the market conditions and long-term dynamics in the biodiesel industry
    (Taylor & Francis, 2024-07-02) Muhammad, Mansur; Herbert Wibert Victor Hasudungan
    The Indonesian energy industry is working towards achieving net zero emissions by reducing energy composition between renewables and non-renewables. Based on this background, this study investigates the biodiesel market conditions and its long-term sustainability using monthly data from January 2014 to October 2023. The study applies the 3SLS, Johansen and bound test approach to cointegration for estimations. Findings from the study show that demand for biodiesel in Indonesia is price inelastic, which implies that the response of demand on small price changes is high due to the availability of substitute products. The Walrasian coefficient is negative and statistically significant, suggesting a partial disequilibrium in the biodiesel market. Furthermore, the blending mandatory of biodiesel is found to be sustainable in the long run as shown by the bound f-statistics and Johansens’ trace statistics. The increasing prices of crude palm oil, catalysts, methanol, and glycerin have a devastating effect on biodiesel production. Exchange rate depreciation is also a negative function of biodiesel production. These findings are crucial for industry stakeholders and policymakers to make informed decisions about resource allocation, cost management, and strategies to enhance the sustainability and efficiency of biodiesel production processes.
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    Institutional quality and Islamic financial development
    (Modern Finance Institute in cooperation with Poznan University of Economics and Business, 2024-02-08) Muhammad, Mansur; Baita, Abubakar Jamilu; Hussain, Tufail
    The Islamic financial system has become an important source of financing for many Muslim and non-Muslim countries. Therefore, this paper examines the role of institutions in facilitating the development of Islamic financial institutions. The study covers the period 2013-2021 for a panel of 11 leading economies in Islamic finance and employs fixed effects with the Driscoll and Kraay (1998) estimator. The results show a positive impact of effective governance on the development of Islamic finance. However, regulatory quality has a significant negative impact on the development of Islamic finance. Thus, we argue for the improvement of critical institutions that include political, legal, governmental, and regulatory aspects.
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    Stock market development in Nigeria : do institutional quality and fdi net inflow matters?
    (ZAIN Publications, 2023-11) Muhammad, Mansur; Muhammad, Sani
    This study examines the effect of institutional quality and FDI net inflow on the stock market development in Nigeria for the period spanning 1996 to 2018. Symmetric method through autoregressive distributed lag model is used for the estimation of the relationship and cointegration. Stock market development is proxy by the annual stock market capitalization, while institutional quality is measured by the average of the composite index covering six categories; control of corruption, government effectiveness, political stability, regulatory quality, rule of law and finally, voice and accountability. Bound test confirms the validity of linear of variables under investigation. We found sufficient and significant evidence, affirming the role of institutional quality on stock market development both in the long run and short run. Similarly, FDI net inflow matters for the development of the stock market in the long run but not significant as expected while in the short it exerts negative and significant impact on the stock market development. This implies that foreign investors in form of portfolio investment will retard the development of the stock market in the short run if not properly managed.
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    Symmetric and asymmetric response of the renewable energy market to Indonesian economic trends
    (Universitas Islam Internasional Indonesia Press, 2024-06-29) Junejo, Safiullah; Muhammad, Mansur; Herbert Wibert Victor Hasundungan
    This study digs into the complex interplay between renewable energy market development and Indonesian economic trends. Our rigorous study aims to investigate the impact of crucial economic indicators, including gross domestic product (GDP), exchange rates, inflation, real interest rates, net inflow of foreign direct investment (FDI), and urbanisation, on the renewable energy landscape in Indonesia between 1973 and 2022. This study provides a novel insight by investigating both symmetric and asymmetric impacts in the context of Indonesia. While previous studies have limited scope with linear relationships, this study fills a gap by capturing the dynamic interplay between renewables and economic indicators. By employing a robust econometric model, we reveal interesting patterns highlighting the multidimensional nature of the renewable energy market's responses to economic trends and find that there is a long-term interplay among the variables under linear and non-linear models. We found empirical evidence indicating that the nexus is asymmetric. However, in the long term, GDP exhibits an asymmetric positive impact on renewable energy consumption in the linear model. This shows that economic growth positively correlates with Indonesia's adoption of sustainable renewable energy sources. Similarly, urbanisation shows a positive response, with expanding cities boosting demand for cleaner and greener energy. Surprisingly, exchange rates show an asymmetric response, demonstrating that depreciation of local currency has a disproportionate negative impact on renewable energy investment during economic downturns. Inflation also exhibits a negative asymmetric response due to eroding purchasing power that reduces investment in renewables. Meanwhile, net inflow of FDI emerges as a critical driver in favourable economic conditions, dramatically amplifying renewable energy capacities. Therefore, during economic recessions, FDI’s impact diminishes and emphasises the significant importance of tailored interventions. Based on the findings of this study, which demonstrate the profound interplay of how the Indonesian economy shapes and is affected by the renewable energy market, we encourage the adoption of policies that promote sustainable energy development while increasing economic resilience. We recommend that policymakers support renewable energy diversification to lessen the vulnerability of exchange rate fluctuations. Attracting FDI is also crucial, as policies can help strengthen the investment climate and bolster the renewable energy sector. Inflation-indexed incentives can help maintain confidence and foster economic growth.
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    Understanding the dynamic linkages : inflation, real balances, and their impact on economic growthin ECOWAS
    (Department of Development Economics, Faculty of Economics, Universitas Sriwijaya, 2024-07-01) Muhammad, Mansur; Baita, Abubakar Jamilu; Ansari, Saba
    This study examines the dynamic relationship between growth, inflation, and real money balances in the Economic Community of West African States (ECOWAS). We apply a new approach by extending comprehensive econometric methods so that monetary dynamics can be better understood in the West African sub-region. The study obtained data from the World Bank from 2006 to 2021 and covered 15 countries. For robustness checks, we estimate dynamic ordinary least squares and fully modified ordinary least squares. These findings reveal the existence of a significant cointegration relationship between growth, real balance, and inflation. Furthermore, this study found that real balance has a positive long-run dynamic impact on growth. Likewise, there is a short-run positive impact of money and inflation on growth. We contribute to the literature on the money-growth nexus by focusing on West Africa, which faces macroeconomic vulnerabilities due to structural imbalances. These findings have policy implications for central banks and the Fiscal Agency. Central Banks must collaborate to reduce money in the informal sector, while Fiscal Authorities must control inflation collectively.