Journal of Security and Sustainability Issues

This paper examines the impact of public spending on ASEAN-5 countries economic development. The purpose of this study is to provide evidence, reference and contribute to the knowledge about government spending and economic growth. This study involves ASEAN-5 countries. The countries are Thailand, Singapore, Indonesia, Philippines and Malaysia. The countries are chosen because there is a lack of study of government expenditure for ASEAN-5 countries using panel data. The data covers from year 1990 to 2014. The data is retrieved from the World Development Indicators (World Bank). The dependent variable is gross domestic product (GDP). GDP is used to measure economic growth. The main independent variable is government expenditure. The other independent variables are gross capital formation, portfolio investment, labor, trade, total reserve and gross savings. A clear understanding about inter-linkages between government spending and economic growth will help the government in making better decision for the country. As ASEAN countries have responsibility for ASEAN Economic Community (AEC) Blueprint 2025 to meet its objectives, ASEAN governments are expected to effectively monitor the public spending as fiscal instrument in stimulating economic growth. Government expenditure may become unproductive if misallocating and using it in excess. From this study, there is evidence that government expenditure has impact on economic growth. Future research is expected to expand the investigation to other composition of government spending such as education, defense and infrastructure expenditures instead of using general government final consumption expenditures.

The prime aim of the study was to investigate the impact of the financial inflows on the economic growth of ASEAN economies. Meanwhile, the study has examined the moderating role of currency crisis in the relationship between financial inflows and the economic growth of ASEAN countries. The study has employed the panel data methodology to achieve the research objectives. Theoretically and empirically it seems that foreign capital inflows have different possible effects on growth and development performance of an economy. If foreign capital inflows are used in an efficient and productive manner then, they will promote country ‘s growth performance. If foreign capital inflows are used in unproductive manner then they will not contribute in a long run, their impact on economic development will only for a short run. Furthermore, the financial crisis (currency crisis) also have a significant influence in the attraction of foreign capital inflows. These financial crises effect the flow of foreign capital inflows among the countries. The results suggest that the flow of workers ‘remittances in the country has significant positive impact on economic growth. Moreover, the banking and systemic crisis hurt the relationship between REM and EG. Worker remittances are considered as a boon to the countries. It has a positive association with the economic growth and acts a stabilizer during the financial crisis. To ensure the effective inflows of the remittance the government should encourage that remittance should be transferred through formal channels, this can be done by giving cost effective financial services to the remitter, linking the remittance transfer with mobile networks and banks that charge low prices.

The general objective of this study is to estimate the relationship between electricity consumption, economic performance and the price of electricity in four sectors namely the industrial, commercial, mining and agricultural by using the panel data approach on leading ASEAN countries. The present study intends to contribute significantly to the existing literature by presenting a comprehensive approach of the issue of electricity consumption in Thailand. The information of electricity consumption in the industrial, commercial, agricultural and mining sectors is essential to understand the magnitude of the sectors’ sensitivity to change with respect to GDP and electricity price. Moreover, real electricity price is incorporated in this study to provide a more consistent result. The findings are important for researchers and academicians by providing a better knowledge of sectoral electricity demand to permit better regulatory decisions in order to facilitate economic efficiency. Apparently for the policy makers, it will be possible that the approach of this study could be useful as a guideline to facilitate the adoption of a more appropriate model for electricity demand management as well as restructuring the electricity sectors. Furthermore, the findings of this study will be helpful in the formulation of effective energy and pricing policies in order to encourage consumers towards the efficient use of energy for the future of sustainable energy and development.

This research study has given important implications for regulators through elaborating the association between economic growth, financial openness among the five member countries of ASEAN including Philippines, Indonesia, Thailand, Malaysia, and Singapore. An insight has been provided about the relation of economic growth and trade openness from the practical aspect in ASEAN economies. Therefore, the policy makers are supported through this information to develop, overview, and revise the existing regulations and policies of financial openness. This research study has made significant contributions through analyzing the association between economic growth and financial openness from the theoretical aspect. The study has argued that the current literature is extended by this study through focusing on the developing economies of ASEAN. Banking sector is a crucial institution for any economy and economic growth is negatively influenced through collapse of the banking activities. Further, financial system comes at risk through financial openness, but it has a considerable role in the development of economies. The financial system liberalization is the main factor, which drives economic growth among the ASEAN countries. There is need for the policy makers to review and alter the existing regulations of financial openness.

The main objective of the currents study is to investigate and explore the antecedents of the convergence in ASEAN countries. Foreign direct investment, trade, government size, population are examined as the antecedents of the economic convergence in ASEAN countries. Examining the phenomena of absolute convergence among ASEAN countries is another set goal of this research. Achieving this goal obviously requires different approach, methodology wise. Cross section regression-based studies have utilized what is called ‘regression to mean’ to examine absolute convergence across countries traditional unit root testing procedure developed by Dickey and Fuller (1979) is employed to test for convergence hypothesis. Employing ADF test also serves two purposes: 1) the methods has to be used to provide input for performing simulations to apply SURADF procedure. Developed by Blundell and Bond (1998), system GMM uses additional moment conditions to serve as an improvement in terms of performance of estimators in the models developed in Arellano and Bond (1991). The implication of this finding is that economies that are more open in terms of trade and with high level of government participation are more likely to show high level of convergence to the group average real GDP per capita than economies that less open to trade with little government participation as measured by government final consumption expenditure as a percentage of GDP.