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DYNAMICS OF INDUSTRIAL PRODUCTION IN BRICS COUNTRIES

Year 2016, Volume: 8 Issue: 1, 1 - 25, 01.06.2016

Abstract

This paper investigates the long run and short run dynamics between industrial
production and factors affecting production in the Emerging Market Economies of
Brazil, Russia, India, China and South Africa (BRICS). Using the Chudik and
Pesaran (2013) P-ARDL model and monthly data from 1994:01 – 2013:12, the
study finds evidence of a cointegrating relationship between industrial production
and selected variables. It is further observed that capital, labour, per capita income
and exports have a positive long run impact on industrial production in the
BRICS. A currency appreciation (an increase in the exchange rate), however, has
a negative impact on industrial production. In the short run, it is found that
imports, exports, exchange rates, labour, capital and per capita income
significantly affect industrial production.

References

  • Abdullah, Norehan, and Hussin Abdullah. (2013) "Determinants of Fertility in
  • Malaysia and Selected ASEAN Countries: The Panel ARDL approach." http://repo.uum.edu.my/id/eprint/12315.
  • Acemoglu, Daron, and James Robinson. (2012) “Why Nations fail: The Origins of
  • Power, Prosperity, and Poverty.” Crown Business, New York. Akinmulegun, Sunday, Ojo. (2014) "Unemployment and Poverty Paradigm in
  • Nigeria: Challenges and Prospect." International Journal of Management and Administrative Sciences (IJMAS) 2, no. 3, pp 16-23. Al Mamun, Md, Kazi Sohog, and Ayesha Akhter. (2013) "A Dynamic Panel
  • Analysis of the Financial Determinants of CSR in Bangladeshi Banking Industry." Asian Economic and Financial Review 3, no. 5, pp. 560-780. Aldrighi, Dante Mendes, and Renato Perim Colistete. (2015) "Industrial Growth and Structural Change." Structural Change and Industrial Development in the BRICS, 162. Published by Oxford University Press, Oxford-USA.
  • Ali, Shahid, Somia Irum, and Asghar Ali. (2008) "Whether Fiscal Stance or Monetary Policy is Effective for Economic Growth in case of South Asian
  • Countries?"The Pakistan Development Review, pp. 791-799. Aradhna Aggarwal. (2014) “GDP Growth and Manufacturing: Experience of
  • BRICS Countries and Lessons to be learned by Central Asia.” Wadhwani Foundation Policy Research Centre New Delhi Kazakhstan, Astana 1-2. Arias, Maria A., and Yi Wen. (2015) "Trapped: Few Developing Countries Can
  • Climb the Economic Ladder or Stay There." The Regional Economist, Oct 2015.
  • Ayres, Robert, and Vlasios Voudouris. (2014) "The Economic Growth Enigma:
  • Capital, Labour and Useful Energy?" Energy Policy 64, pp. 16-28. Baltagi, Badi. (2008) “Econometric analysis of panel data”. Fourth Edition. West
  • Sussex: John Wely and Sons, Ltd. UK, pp. 13. Banerjee, Anindya, Juan Dolado, and Ricardo Mestre. (2008) "Error‐correction
  • Mechanism Tests for Cointegration in a Single‐equation framework." Journal of Time Series Analysis 19, no. 3, pp. 267-283. Calderón, César, and Eduardo Levy Levy-Yeyati. (2009) "Zooming in: From
  • Aggregate Volatility to Income distribution." World Bank Policy Research Working Paper Series, No. 4895.
  • Chudik, Alexander, and M. Hashem Pesaran. (2013) "Large panel data models with cross-sectional dependence: a survey." CAFE Research Paper 13.15.
  • Chun, Kwang Ho. (2014) “The BRICs superpower challenge: foreign and security policy analysis”. Ashgate Publishing, Ltd.
  • Demetriades, Panicos, and David Fielding. (2012) "Information, institutions, and banking sector development in West Africa." Economic Inquiry 50, no. 3, 739
  • Di Maio, Michele. (2015) "Industrial Policy in the BRICS." Structural Change and Industrial Development in the BRICS, 429. Published by Oxford University Press, Oxford-USA.
  • Dietzenbacher, Erik, Bart Los, Robert Stehrer, Marcel Timmer, and Gaaitzen De Vries. (2013) "The construction of world input–output tables in the WIOD project." Economic Systems Research 25, no. 1, 71-98.
  • Dritsakis, Nikolaos. (2011) "Demand for Money in Hungary: An ARDL
  • Approach."Review of Economics and Finance 5, 1-28. Egert, Balazs, and Carol S. Leonard. (2008) "Dutch disease scare in Kazakhstan:
  • Is it real?." Open Economies Review 19, no. 2, 147-165. Engle, Robert F., and Clive WJ Granger. (1987) "Co-integration and error correction: representation, estimation, and testing." Econometrica: journal of the Econometric Society: 251-276.
  • Felipe, Jesus. (2001) "Aggregate production functions and the measurement of infrastructure productivity: a reassessment." Eastern Economic Journal 27, no. 3, 344.
  • Frimpong, Joseph Magnus, and Eric Fosu Oteng-Abayie. (2006) "Bounds testing approach: an examination of foreign direct investment, trade, and growth relationships." America Journal of Applied Science, 1-22.
  • Frimpong, Prince Boakye. (2012) "Population Health and Economic Growth:
  • Panel Cointegration Analysis in Sub-Saharan Africa." Master’s thesis at Lund University. Fu, Xiaolan, Carlo Pietrobelli, and Luc Soete. (2011) "The role of foreign technology and indigenous innovation in the emerging economies: Technological change and catching-up." World development 39, no. 7, 1204-1212.
  • Gerni, Cevat, Burhan Kabadayi, Ziya Caglar Yurttancikmaz, and Ömer Selçuk Emsen. (2013) "The Analysis of Competitiveness and Economic Growth: A Case
  • Study of Transition Countries." International Business Research 6, no. 5, 117. Giles David. (2013) “Econometrics Beat: Dave Giles' Blog”: ARDL Models - Part I and 2.
  • Gujarati Damoder. (2004) “Basic Econometrics, Fourth Edition”. The McGraw- Hill Companies.
  • Hsiao, Cheng. (2014) “Analysis of panel data”. No. 54. Cambridge university press.
  • Ishibashi, Shohei. (2012) "The Segmentation of Loan Interest Rates by Regional
  • Financial Institutions: A Panel Cointegration Analysis." International Review of Business Research Papers 8, no. 5, 95-110. Jajri, Idris, and Rahmah Ismail. (2010) "Impact of labour quality on labour productivity and economic growth." African Journal of Business Management4, no. 4, 486-495.
  • Jones, Charles I. (2011) Misallocation, economic growth, and input-output economics. National Bureau of Economic Research Working Paper No. w16742.
  • Katircioglu, Salih T. (2009) "Revisiting the tourism-led-growth hypothesis for
  • Turkey using the bounds test and Johansen approach for cointegration." Tourism Management 30, no. 1, 17-20. Mahembe, Edmore. (2014) "Foreign direct investment inflows and economic growth in SADC countries: a panel data approach." Master’s thesis at the University of South Africa.
  • Mohaddes, Kamiar, and Mehdi Raissi. (2014) "Does Inflation Slow Long-Run
  • Growth in India?." IMF Working Paper No. 14(222). Moon, Hyungsik Roger, and Benoit Perron. (2004) "Testing for a unit root in panels with dynamic factors." Journal of econometrics 122, no. 1, 81-126.
  • Narayan, Paresh Kumar. (2005) "The saving and investment nexus for China: evidence from cointegration tests." Applied economics 37, no. 17, 1979-1990.
  • Naudé, Wim, Adam Szirmai, and Alejandro Lavopa. (2013) "Industrialization lessons from BRICS: A comparative analysis." SSRN Discussion Paper No. 7543.
  • Naudé, Wim, Adam Szirmai, and Nobuya Haraguchi, eds. (2015) “Structural change and industrial development in the BRICS.” OUP Oxford.
  • Nkurayija, Jean de la, Croix. (2011) "The Requirements for the African
  • Continent’s Development:‘‘Linking Peace, Governance, Economic Growth and Global Independence”’. 1-18. Nowak-Lehmann D, Felicitas, Dierk Herzer, Sebastian Vollmer, and Inmaculada Martínez-Zarzoso. (2011) "Modelling the dynamics of market shares in a pooled data setting: econometric and empirical issues." Applied Economics 43, no. 7, 835.
  • Olotu, Adebobola, Rafiu Salami, and Igbayemi Akeremale. (2015) "Poverty and rate of unemployment in Nigeria." Ijm 2, no. 1.
  • Omar, Wan Ahmad Wan, Fauzi Hussin, and Asan Ali GH. (2015) "The Empirical
  • Effects of Islam on Economic Development in Malaysia." Research in World Economy 1, no. 6, 99. Omolade, Adeleke, and Harold Ngalawa. (2014) "Oil Revenue and Manufacturing
  • Sector Growth in Africa’s Oil-Exporting Countries." Journal of Economic and Financial Sciences| JEF| October 7, no. 3, 925-944. Pesaran, M. Hashem, Yongcheol Shin, and Richard J. Smith. (2001) "Bounds testing approaches to the analysis of level relationships." Journal of applied econometrics 16, no. 3, 289-326.
  • Pesaran, M. Hashem. (2007) "A simple panel unit root test in the presence of cross‐section dependence." Journal of Applied Econometrics 22, no. 2, 265-312.
  • Pesaran, Mohammad Hashem, and Bahram Pesaran. (1997) Working with Microfit 0: interactive econometric analysis;[Windows version]. Oxford University Press.
  • Rafindadi, Abdulkadir Abdulrashid, and Zarinah Yosuf. (2013) "An Application of Panel ARDL in Analysing the Dynamics of Financial Development and Economic Growth in 38 Sub-Saharan African Continents." In Proceeding-Kuala
  • Lumpur International Business, Economics and Law Conference. Raza, Syed Ali, Muhammad Shahbaz, and Duc Khuong Nguyen. (2015) "Energy conservation policies, growth and trade performance: Evidence of feedback hypothesis in Pakistan." Energy Policy 80, 1-10.
  • Rebelo, Sergio T. (1990) “Long run policy analysis and long run growth.”
  • National Bureau of Economic Research Working Paper No. 3325.
  • Sari, Ramazan, Bradley T. Ewing, and Ugur Soytas. (2008) "The relationship between disaggregate energy consumption and industrial production in the United
  • States: an ARDL approach." Energy Economics 30, no. 5, 2302-2313.
  • Sari, Ramazan, Bradley T. Ewing, and Ugur Soytas. (2008) "The relationship between disaggregate energy consumption and industrial production in the United
  • States: an ARDL approach." Energy Economics 30, no. 5, 2302-2313.
  • Sebri, Maamar, and Ousama Ben-Salha. (2014) "On the causal dynamics between economic growth, renewable energy consumption, CO 2 emissions and trade openness: fresh evidence from BRICS countries." Renewable and Sustainable Energy Reviews 39, 14-23.
  • Sebri, Maamar, and Ousama Ben-Salha. (2014) "On the causal dynamics between economic growth, renewable energy consumption, CO 2 emissions and trade openness: fresh evidence from BRICS countries." Renewable and Sustainable Energy Reviews 39, 14-23.
  • Shin, Yongcheol, Byungchul Yu, and Matthew Greenwood-Nimmo. (2014)
  • "Modelling asymmetric cointegration and dynamic multipliers in a nonlinear ARDL framework." In Festschrift in Honor of Peter Schmidt, pp. 281-314. Springer New York. Waliullah, Waliullah, and Fazli Rabbi. (2011) "Effectiveness Of Monetary Policy
  • In Pakistan: Empirical Evidences Based On Boundtest Approach." International Journal of Business and Social Science 2, no. 1.
Year 2016, Volume: 8 Issue: 1, 1 - 25, 01.06.2016

Abstract

References

  • Abdullah, Norehan, and Hussin Abdullah. (2013) "Determinants of Fertility in
  • Malaysia and Selected ASEAN Countries: The Panel ARDL approach." http://repo.uum.edu.my/id/eprint/12315.
  • Acemoglu, Daron, and James Robinson. (2012) “Why Nations fail: The Origins of
  • Power, Prosperity, and Poverty.” Crown Business, New York. Akinmulegun, Sunday, Ojo. (2014) "Unemployment and Poverty Paradigm in
  • Nigeria: Challenges and Prospect." International Journal of Management and Administrative Sciences (IJMAS) 2, no. 3, pp 16-23. Al Mamun, Md, Kazi Sohog, and Ayesha Akhter. (2013) "A Dynamic Panel
  • Analysis of the Financial Determinants of CSR in Bangladeshi Banking Industry." Asian Economic and Financial Review 3, no. 5, pp. 560-780. Aldrighi, Dante Mendes, and Renato Perim Colistete. (2015) "Industrial Growth and Structural Change." Structural Change and Industrial Development in the BRICS, 162. Published by Oxford University Press, Oxford-USA.
  • Ali, Shahid, Somia Irum, and Asghar Ali. (2008) "Whether Fiscal Stance or Monetary Policy is Effective for Economic Growth in case of South Asian
  • Countries?"The Pakistan Development Review, pp. 791-799. Aradhna Aggarwal. (2014) “GDP Growth and Manufacturing: Experience of
  • BRICS Countries and Lessons to be learned by Central Asia.” Wadhwani Foundation Policy Research Centre New Delhi Kazakhstan, Astana 1-2. Arias, Maria A., and Yi Wen. (2015) "Trapped: Few Developing Countries Can
  • Climb the Economic Ladder or Stay There." The Regional Economist, Oct 2015.
  • Ayres, Robert, and Vlasios Voudouris. (2014) "The Economic Growth Enigma:
  • Capital, Labour and Useful Energy?" Energy Policy 64, pp. 16-28. Baltagi, Badi. (2008) “Econometric analysis of panel data”. Fourth Edition. West
  • Sussex: John Wely and Sons, Ltd. UK, pp. 13. Banerjee, Anindya, Juan Dolado, and Ricardo Mestre. (2008) "Error‐correction
  • Mechanism Tests for Cointegration in a Single‐equation framework." Journal of Time Series Analysis 19, no. 3, pp. 267-283. Calderón, César, and Eduardo Levy Levy-Yeyati. (2009) "Zooming in: From
  • Aggregate Volatility to Income distribution." World Bank Policy Research Working Paper Series, No. 4895.
  • Chudik, Alexander, and M. Hashem Pesaran. (2013) "Large panel data models with cross-sectional dependence: a survey." CAFE Research Paper 13.15.
  • Chun, Kwang Ho. (2014) “The BRICs superpower challenge: foreign and security policy analysis”. Ashgate Publishing, Ltd.
  • Demetriades, Panicos, and David Fielding. (2012) "Information, institutions, and banking sector development in West Africa." Economic Inquiry 50, no. 3, 739
  • Di Maio, Michele. (2015) "Industrial Policy in the BRICS." Structural Change and Industrial Development in the BRICS, 429. Published by Oxford University Press, Oxford-USA.
  • Dietzenbacher, Erik, Bart Los, Robert Stehrer, Marcel Timmer, and Gaaitzen De Vries. (2013) "The construction of world input–output tables in the WIOD project." Economic Systems Research 25, no. 1, 71-98.
  • Dritsakis, Nikolaos. (2011) "Demand for Money in Hungary: An ARDL
  • Approach."Review of Economics and Finance 5, 1-28. Egert, Balazs, and Carol S. Leonard. (2008) "Dutch disease scare in Kazakhstan:
  • Is it real?." Open Economies Review 19, no. 2, 147-165. Engle, Robert F., and Clive WJ Granger. (1987) "Co-integration and error correction: representation, estimation, and testing." Econometrica: journal of the Econometric Society: 251-276.
  • Felipe, Jesus. (2001) "Aggregate production functions and the measurement of infrastructure productivity: a reassessment." Eastern Economic Journal 27, no. 3, 344.
  • Frimpong, Joseph Magnus, and Eric Fosu Oteng-Abayie. (2006) "Bounds testing approach: an examination of foreign direct investment, trade, and growth relationships." America Journal of Applied Science, 1-22.
  • Frimpong, Prince Boakye. (2012) "Population Health and Economic Growth:
  • Panel Cointegration Analysis in Sub-Saharan Africa." Master’s thesis at Lund University. Fu, Xiaolan, Carlo Pietrobelli, and Luc Soete. (2011) "The role of foreign technology and indigenous innovation in the emerging economies: Technological change and catching-up." World development 39, no. 7, 1204-1212.
  • Gerni, Cevat, Burhan Kabadayi, Ziya Caglar Yurttancikmaz, and Ömer Selçuk Emsen. (2013) "The Analysis of Competitiveness and Economic Growth: A Case
  • Study of Transition Countries." International Business Research 6, no. 5, 117. Giles David. (2013) “Econometrics Beat: Dave Giles' Blog”: ARDL Models - Part I and 2.
  • Gujarati Damoder. (2004) “Basic Econometrics, Fourth Edition”. The McGraw- Hill Companies.
  • Hsiao, Cheng. (2014) “Analysis of panel data”. No. 54. Cambridge university press.
  • Ishibashi, Shohei. (2012) "The Segmentation of Loan Interest Rates by Regional
  • Financial Institutions: A Panel Cointegration Analysis." International Review of Business Research Papers 8, no. 5, 95-110. Jajri, Idris, and Rahmah Ismail. (2010) "Impact of labour quality on labour productivity and economic growth." African Journal of Business Management4, no. 4, 486-495.
  • Jones, Charles I. (2011) Misallocation, economic growth, and input-output economics. National Bureau of Economic Research Working Paper No. w16742.
  • Katircioglu, Salih T. (2009) "Revisiting the tourism-led-growth hypothesis for
  • Turkey using the bounds test and Johansen approach for cointegration." Tourism Management 30, no. 1, 17-20. Mahembe, Edmore. (2014) "Foreign direct investment inflows and economic growth in SADC countries: a panel data approach." Master’s thesis at the University of South Africa.
  • Mohaddes, Kamiar, and Mehdi Raissi. (2014) "Does Inflation Slow Long-Run
  • Growth in India?." IMF Working Paper No. 14(222). Moon, Hyungsik Roger, and Benoit Perron. (2004) "Testing for a unit root in panels with dynamic factors." Journal of econometrics 122, no. 1, 81-126.
  • Narayan, Paresh Kumar. (2005) "The saving and investment nexus for China: evidence from cointegration tests." Applied economics 37, no. 17, 1979-1990.
  • Naudé, Wim, Adam Szirmai, and Alejandro Lavopa. (2013) "Industrialization lessons from BRICS: A comparative analysis." SSRN Discussion Paper No. 7543.
  • Naudé, Wim, Adam Szirmai, and Nobuya Haraguchi, eds. (2015) “Structural change and industrial development in the BRICS.” OUP Oxford.
  • Nkurayija, Jean de la, Croix. (2011) "The Requirements for the African
  • Continent’s Development:‘‘Linking Peace, Governance, Economic Growth and Global Independence”’. 1-18. Nowak-Lehmann D, Felicitas, Dierk Herzer, Sebastian Vollmer, and Inmaculada Martínez-Zarzoso. (2011) "Modelling the dynamics of market shares in a pooled data setting: econometric and empirical issues." Applied Economics 43, no. 7, 835.
  • Olotu, Adebobola, Rafiu Salami, and Igbayemi Akeremale. (2015) "Poverty and rate of unemployment in Nigeria." Ijm 2, no. 1.
  • Omar, Wan Ahmad Wan, Fauzi Hussin, and Asan Ali GH. (2015) "The Empirical
  • Effects of Islam on Economic Development in Malaysia." Research in World Economy 1, no. 6, 99. Omolade, Adeleke, and Harold Ngalawa. (2014) "Oil Revenue and Manufacturing
  • Sector Growth in Africa’s Oil-Exporting Countries." Journal of Economic and Financial Sciences| JEF| October 7, no. 3, 925-944. Pesaran, M. Hashem, Yongcheol Shin, and Richard J. Smith. (2001) "Bounds testing approaches to the analysis of level relationships." Journal of applied econometrics 16, no. 3, 289-326.
  • Pesaran, M. Hashem. (2007) "A simple panel unit root test in the presence of cross‐section dependence." Journal of Applied Econometrics 22, no. 2, 265-312.
  • Pesaran, Mohammad Hashem, and Bahram Pesaran. (1997) Working with Microfit 0: interactive econometric analysis;[Windows version]. Oxford University Press.
  • Rafindadi, Abdulkadir Abdulrashid, and Zarinah Yosuf. (2013) "An Application of Panel ARDL in Analysing the Dynamics of Financial Development and Economic Growth in 38 Sub-Saharan African Continents." In Proceeding-Kuala
  • Lumpur International Business, Economics and Law Conference. Raza, Syed Ali, Muhammad Shahbaz, and Duc Khuong Nguyen. (2015) "Energy conservation policies, growth and trade performance: Evidence of feedback hypothesis in Pakistan." Energy Policy 80, 1-10.
  • Rebelo, Sergio T. (1990) “Long run policy analysis and long run growth.”
  • National Bureau of Economic Research Working Paper No. 3325.
  • Sari, Ramazan, Bradley T. Ewing, and Ugur Soytas. (2008) "The relationship between disaggregate energy consumption and industrial production in the United
  • States: an ARDL approach." Energy Economics 30, no. 5, 2302-2313.
  • Sari, Ramazan, Bradley T. Ewing, and Ugur Soytas. (2008) "The relationship between disaggregate energy consumption and industrial production in the United
  • States: an ARDL approach." Energy Economics 30, no. 5, 2302-2313.
  • Sebri, Maamar, and Ousama Ben-Salha. (2014) "On the causal dynamics between economic growth, renewable energy consumption, CO 2 emissions and trade openness: fresh evidence from BRICS countries." Renewable and Sustainable Energy Reviews 39, 14-23.
  • Sebri, Maamar, and Ousama Ben-Salha. (2014) "On the causal dynamics between economic growth, renewable energy consumption, CO 2 emissions and trade openness: fresh evidence from BRICS countries." Renewable and Sustainable Energy Reviews 39, 14-23.
  • Shin, Yongcheol, Byungchul Yu, and Matthew Greenwood-Nimmo. (2014)
  • "Modelling asymmetric cointegration and dynamic multipliers in a nonlinear ARDL framework." In Festschrift in Honor of Peter Schmidt, pp. 281-314. Springer New York. Waliullah, Waliullah, and Fazli Rabbi. (2011) "Effectiveness Of Monetary Policy
  • In Pakistan: Empirical Evidences Based On Boundtest Approach." International Journal of Business and Social Science 2, no. 1.
There are 62 citations in total.

Details

Other ID JA32CM27BF
Journal Section Articles
Authors

Adebayo Augustine Kutu This is me

Harold Ngalawa This is me

Publication Date June 1, 2016
Published in Issue Year 2016 Volume: 8 Issue: 1

Cite

APA Kutu, A. . A., & Ngalawa, H. (2016). DYNAMICS OF INDUSTRIAL PRODUCTION IN BRICS COUNTRIES. International Journal of Economics and Finance Studies, 8(1), 1-25.
AMA Kutu AA, Ngalawa H. DYNAMICS OF INDUSTRIAL PRODUCTION IN BRICS COUNTRIES. IJEFS. June 2016;8(1):1-25.
Chicago Kutu, Adebayo Augustine, and Harold Ngalawa. “DYNAMICS OF INDUSTRIAL PRODUCTION IN BRICS COUNTRIES”. International Journal of Economics and Finance Studies 8, no. 1 (June 2016): 1-25.
EndNote Kutu AA, Ngalawa H (June 1, 2016) DYNAMICS OF INDUSTRIAL PRODUCTION IN BRICS COUNTRIES. International Journal of Economics and Finance Studies 8 1 1–25.
IEEE A. . A. Kutu and H. Ngalawa, “DYNAMICS OF INDUSTRIAL PRODUCTION IN BRICS COUNTRIES”, IJEFS, vol. 8, no. 1, pp. 1–25, 2016.
ISNAD Kutu, Adebayo Augustine - Ngalawa, Harold. “DYNAMICS OF INDUSTRIAL PRODUCTION IN BRICS COUNTRIES”. International Journal of Economics and Finance Studies 8/1 (June 2016), 1-25.
JAMA Kutu AA, Ngalawa H. DYNAMICS OF INDUSTRIAL PRODUCTION IN BRICS COUNTRIES. IJEFS. 2016;8:1–25.
MLA Kutu, Adebayo Augustine and Harold Ngalawa. “DYNAMICS OF INDUSTRIAL PRODUCTION IN BRICS COUNTRIES”. International Journal of Economics and Finance Studies, vol. 8, no. 1, 2016, pp. 1-25.
Vancouver Kutu AA, Ngalawa H. DYNAMICS OF INDUSTRIAL PRODUCTION IN BRICS COUNTRIES. IJEFS. 2016;8(1):1-25.