panel smooth transition regression model

Climate change is becoming a global crisis that can affect all aspects of human life on Earth, including the economy. So, protecting the environment and achieving sustainable development goals are now on the agenda of many governments. This article uses the Panel Smooth Transition Regression Model to test the role of information communication technology as a transition variable. In this research, it is investigated whether ICT can decouple the economic growth from the increase in pollution by changing the effect of productivity on CO2 emission. The goal is to show whether policymakers can use the development of the digital economy around the world to achieve better environmental and economic outcomes. This study was conducted on a global scale and data from 108 countries was used from 2003 to 2019. The results show that the co2 emission follows a PSTR model with ICT as a transition variable that changes the effect of total factor productivity on co2 emission in favor of the environment. ICT development will improve carbon efficiency and reduce climate change.

The relationship between financial decentralization and economic growth has been one of the crucial issues in economics in recent decades. Financial decentralization could affect economic growth and consequently development programs and the expansion of regional balance policies. This study investigates the nonlinear behavior of economic growth and financial decentralization in the Iranian provinces during the period 2004-2016 using a panel smooth transition regression model as one of the prominent models of regime change. A hybrid financial decentralization index is extracted using the principal component analysis technique and it is used as a transfer variable to study the changes in economic growth in the nonlinear model. Results of estimation confirm a nonlinear relationship between the variables under study and propose a dual-regime model with a threshold of 3.1941 and a slope parameter of 4.2869. So, the effect of combined financial decentralization on growth of the provinces is asymmetric. Thus, with increasing decentralization in the first regime, economic growth becomes positive and after crossing the threshold and entering the second regime, it becomes negative due to the costs associated with increasing financial decentralization. Therefore, the relationship between hybrid financial decentralization and the economic growth of the provinces can be shown as an inverse parabola.

The main purpose of this article was testing the relation between competition and innovation in Iran’s manufacturing industry. To meet this ends the data of 130 Iran’s 4-digit industries over the period of 1996-2013 were used. Also, this article sought to analyze this relationship by using a panel smooth transition approach. The results indicated that, clearly there was the nonlinear relationship among variables and by increasing concentration until threshold value 0.267 the research and development intensity increased but after this threshold value, its effect decreased. Moreover in the second model by increasing research and development intensity till the threshold value of 0.38 percentage the concentration increased and after that, this impact has been decreased. In addition, only in 6% of Iran's industries competition and innovation was high but, in most industries by increasing competition, innovation were declining. Overall, there was an asymmetric relationship between competition and innovation and in most industries the intensity of research and development expenditures were low. So, in Iran’s industries, the inverse U relation between innovation and competition confirmed.

In an economy system, government activities play a fundamental role in economic growth and development of countries, but increase these activities have a positive effect on economic growth until a certain threshold and from this threshold excessive increase in government activities not only have no positive effect on economic growth, but these activities are main barrier to growth.
Including of these activities, can mention the government''s capital expenditures and public debt. In this study, is tried to study the threshold effects and non-linear government investment and public debt on GDP in two separate models during of 2000-2016 using of provincial data and Panel Smooth Transition Regression Model (PSTR).
The results of linearity test show that there is a nonlinear relationship between variables. Also, the inclusion of a transfer function with a threshold parameter which is representing a two-regime model, is sufficient to determine the nonlinear relationship between variables. The results show that public debt and investment in first regime have a positive effect on GDP, but by crossing of threshold and entering to second regime, severity of this effect will be increased and negative. It seems, this result is due to the crowed-out effect on private sector and increase in public debt due to rising government spending and confirms Laffer curve hypothesis.

The main challenge of developing countries is to achieve growth and development. The extant economic growth literature illustrates that the quality of institutions and social infrastructure are important factors that influence the economic growth and development. Accordingly, many analysts believe that regarding such institutional factors, the rule of law is one of the most prominent aspects necessary for a system to achieve investment and economic growth. This study aims to investigate the impact of institutional variables on economic growth in developed and developing countries for the period 1995-2015. To this end, Panel Smooth Transition Regression (PSTR) model has been used. The estimation results of model reject the linearity hypothesis, and estimate a model with two regimes that proposes a threshold at institutional quality indicators of 0.1627 and 0.625 for the countries under study. It is demonstrated that the factor of rule of law has a positive impact on economic growth; however, this impact is higher in the second regime. The results also show that in both regimes, the variables of institutional quality indices, economic freedom, human capital and other control variables have a positive effect on economic growth. Moreover, the intensity of the variables influencing the changes in both groups intensifies when institutional quality improves.