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1
Standsyah, Rahmawati Erma, Bambang Widjanarko Otok, and Agus Suharsono. "Fixed Effect Meta-Analytic Structural Equation Modeling (MASEM) Estimation Using Generalized Method of Moments (GMM)." Symmetry 13, no. 12 (2021): 2273. http://dx.doi.org/10.3390/sym13122273.
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The fixed effect meta-analytic structural equation modeling (MASEM) model assumes that the population effect is homogeneous across studies. It was first developed analytically using Generalized Least Squares (GLS) and computationally using Weighted Least Square (WLS) methods. The MASEM fixed effect was not estimated analytically using the estimation method based on moment. One of the classic estimation methods based on moment is the Generalized Method of Moments (GMM), whereas GMM can possibly estimate the data whose studies has parameter uncertainty problems, it also has a high accuracy on data heterogeneity. Therefore, this study estimates the fixed effect MASEM model using GMM. The symmetry of this research is based on the proof goodness of the estimator and the performance that it is analytical and numerical. The estimation results were proven to be the goodness of the estimator, unbiased and consistent. To show the performance of the obtained estimator, a comparison was carried out on the same data as the MASEM using GLS. The results show that the estimation of MASEM using GMM yields the SE value in each coefficient is smaller than the estimation of MASEM using GLS. Interactive GMM for the determination of the optimal weight on GMM in this study gave better results and therefore needs to be developed in order to obtain a Random Model MASEM estimator using GMM that is much more reliable and accurate in performance.
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Adafre Bushashe, Million, and Yitbarek Takele Bayiley. "The effect of fiscal decentralization on economic growth in sub-national governments of Ethiopia: A two-step system general methods of moments (GMM) approach." Public and Municipal Finance 12, no. 2 (2023): 32–42. http://dx.doi.org/10.21511/pmf.12(2).2023.03.
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The study examines the impact of fiscal decentralization on Ethiopia’s Subnational (Regional) economic growth. The study followed a quantitative research procedure employing data from 2008 to 2021. The units of analysis in the study are Ethiopia’s sub-national governments (SNGs). The study used the two-step System General Method of Moments (GMM) of dynamic panel estimation because it resolves concerns such as endogeneity and heteroscedasticity. The study’s findings revealed that expenditure, revenue, and composite decentralization have a statistically significant negative effect on regional economic growth. Moreover, among the control variables, inflation and government size have a statistically significant detrimental effect on regional economic growth. However, human capital has no significant effect. Ethiopia’s fiscal decentralization contradicts the goals and theoretical underpinnings of fiscal federalism. This may be because fiscal decentralization and economic activities function within an ethnically based federalism framework. The primary implication is that the federal government needs to reevaluate the transfer of fiscal authority to SNGs. Transforming tax policy into a robust institutional mechanism for economic growth is vital. The revenue and spending sides of intergovernmental relations also need to be closely related. As opposed to prior studies, which utilized one or two fiscal decentralization indicators, this study used multiple indicators, making the study more thorough and closing the knowledge gap.
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M, Amany, Mousa, Ahmed A, El sheikh, Fatma El Zahraa S. Salama, and Ahmed M. Gad. "Reviewing of Different Methods for Handling Longitudinal Count data." Journal of University of Shanghai for Science and Technology 23, no. 08 (2021): 195–206. http://dx.doi.org/10.51201/jusst/21/08349.
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In this paper, we will review the methods that used to handle longitudinal data in the case of marginal models when inferences about the population average are the primary focus [1] or when future applications of the results require the expectation of the response as a function of the current covariates [7]. We will review the generalized estimating equations method (GEE), quadratic inference functions (QIF), generalized quasi likelihood (GQL) and the generalized method of moments (GMM). These methods will be reviewed by discussing its advantages and disadvantages in more details.
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Ozigbu, Johnbosco Chukwuma. "Trade Integration and Economic Well-being: Evidence from Generalised Methods of Moments (GMM) in the D-8 Countries." African Journal of Economics and Sustainable Development 6, no. 2 (2023): 64–75. http://dx.doi.org/10.52589/ajesd-w2wszuze.
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This paper contributes to the trade–development nexus by investigating the link between trade integration and economic well-being in the developing eight (D-8) countries comprising Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan, and Turkiye. Essentially, this paper examined how trade openness, financial openness, and the exchange rate contributed to gross national income (GNI) per capita (a proxy for economic well-being). The panel data obtained from the United Nations Conference on Trade and Development (UNCTAD), the World Bank’s World Development Indicator (WDI), and the Chinn-Ito index between 2005 and 2021 were analysed using the two-step generalized method of moments (GMM), panel unit root, and Rao cointegration, among others. Evidence of a long-run relationship among the variables was established from the Kao cointegration test results at the 5 per cent significance level. This suggests that trade integration has a forecasting ability for economic well-being in the D-8 countries. The results of the two-step GMM revealed that trade openness significantly enhanced the economic well-being of the D-8 countries. This finding explains that cross-border trade among the members of the D-8 countries plays a substantial role in improving the standard of living of the population. Similarly, the results showed that as the degree of financial openness grew, economic well-being improved significantly. However, the results further revealed that exchange rate depreciation had an insignificant negative effect on economic well-being. Given the findings, this paper recommends that policymakers in the D-8 countries should synergise to implement a non-restrictive trade policy, gradually collapse the barriers to financial openness, and promote exchange rate stability to create more opportunities for economic development.
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Kuersteiner, Guido M., and Ingmar R. Prucha. "Dynamic Spatial Panel Models: Networks, Common Shocks, and Sequential Exogeneity." Econometrica 88, no. 5 (2020): 2109–46. http://dx.doi.org/10.3982/ecta13660.
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This paper considers a class of generalized methods of moments (GMM) estimators for general dynamic panel models, allowing for weakly exogenous covariates and cross‐sectional dependence due to spatial lags, unspecified common shocks, and time‐varying interactive effects. We significantly expand the scope of the existing literature by allowing for endogenous time‐varying spatial weight matrices without imposing explicit structural assumptions on how the weights are formed. An important area of application is in social interaction and network models where our specification can accommodate data dependent network formation. We consider an exemplary social interaction model and show how identification of the interaction parameters is achieved through a combination of linear and quadratic moment conditions. For the general setup we develop an orthogonal forward differencing transformation to aid in the estimation of factor components while maintaining orthogonality of moment conditions. This is an important ingredient to a tractable asymptotic distribution of our estimators. In general, the asymptotic distribution of our estimators is found to be mixed normal due to random norming. However, the asymptotic distribution of our test statistics is still chi‐square.
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Breitung, J., N. R. Chaganty, R. M. Daniel, et al. "Discussion of “Generalized Estimating Equations: Notes on the Choice of the Working Correlation Matrix”." Methods of Information in Medicine 49, no. 05 (2010): 426–32. http://dx.doi.org/10.1055/s-0038-1625133.
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Summary Objective: To discuss generalized estimating equations as an extension of generalized linear models by commenting on the paper of Ziegler and Vens “Generalized Estimating Equations: Notes on the Choice of the Working Correlation Matrix”. Methods: Inviting an international group of experts to comment on this paper. Results: Several perspectives have been taken by the discussants. Econometricians have established parallels to the generalized method of moments (GMM). Statisticians discussed model assumptions and the aspect of missing data. Applied statisticians commented on practical aspects in data analysis. Conclusions: In general, careful modeling correlation is encouraged when considering estimation efficiency and other implications, and a comparison of choosing instruments in GMM and generalized estimating equations (GEE) would be worthwhile. Some theoretical drawbacks of GEE need to be further addressed and require careful analysis of data. This particularly applies to the situation when data are missing at random.
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Malini, Helma, and Edwin Suwantono. "Indonesia Stock Exchange Resilience toward Crisis; Study Case of US and China Trade War." IJEBD (International Journal of Entrepreneurship and Business Development) 4, no. 2 (2021): 234–40. http://dx.doi.org/10.29138/ijebd.v4i2.1209.
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This paper investigates the resilience’s of Indonesia stock Exchange toward the US and China trade war. Emphasis is put on the influence of US and China trade war since 2016. We analyze data using five major sectoral indexes in IDX (Consumer Goods Industry Sector, Agriculture Sector, Infrastructure, Utility and Transportation Sector, Miscellaneous Industry Sector, and Mining Sector) using volatility modelling of Autoregressive Distributed Lag (ARDL) & Generalized Method of Moments (GMM) methods to find the correlation and co- integration between selected sector US and China trade war. We find inconclusiveness and no co-integration on correlated markets although the trade wars have impact for each sectoral index by using ARDL. GMM method showed a significance short-run relationship and long-run relationship. The market disequilibrium takes nearly about one and half week to clear any disequilibrium toward certain shocks or impacts.
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Latipah, Siti Lailatul, Hady Sutjipto, Rah Adi Fahmi Ginanjar, Sugeng Setyadi, and Saharuddin Didu. "Analysis of factors affecting regional financial independence in primary leading sector districts." Journal of Entrepreneurial Economic 2, no. 1 (2025): 70–93. https://doi.org/10.61511/jane.v2i1.2025.1432.
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Background: Regional autonomy has been implemented for more than two decades, but local governments can still not manage their local finances independently. Problems that occur in the implementation of regional autonomy can occur from within and outside the country. Domestic conditions indicate that people want openness and independence, while foreign conditions indicate that the increasing progress of globalization demands the competitiveness of each country, including the competitiveness of local governments. Methods: This study uses panel data consisting of time series data from 2018 - 2022 and cross-section data on 140 districts in Indonesia that have primary leading sectors. The analysis method is the Generalized Method of Moments (GMM) method with the System Generalized Method of Moments approach to address endogeneity problems and dynamic economic correlations. Findings: The results of this study indicate that the primary output variable and tax ratio have a positive and significant effect on regional financial independence. In contrast, natural resource revenue-sharing funds and general allocation funds have a negative and significant effect. Meanwhile, the special allocation fund variable does not affect regional financial independence. Conclusion: This study concludes that enhancing primary output and optimizing tax ratios are crucial for improving regional financial independence. However, reliance on revenue-sharing funds and general allocation funds can hinder financial autonomy. Policy implications suggest the need for local governments to strengthen their economic base and reduce dependency on central government transfers to achieve greater fiscal independence. Novelty/Originality of this Article: This study provides a novel approach to analyzing regional financial independence by utilizing the System Generalized Method of Moments (GMM) to address dynamic economic correlations and endogeneity issues.
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Chernozhukov, Victor, Whitney K. Newey, and Andres Santos. "Constrained Conditional Moment Restriction Models." Econometrica 91, no. 2 (2023): 709–36. http://dx.doi.org/10.3982/ecta13830.
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Shape restrictions have played a central role in economics as both testable implications of theory and sufficient conditions for obtaining informative counterfactual predictions. In this paper, we provide a general procedure for inference under shape restrictions in identified and partially identified models defined by conditional moment restrictions. Our test statistics and proposed inference methods are based on the minimum of the generalized method of moments (GMM) objective function with and without shape restrictions. Uniformly valid critical values are obtained through a bootstrap procedure that approximates a subset of the true local parameter space. In an empirical analysis of the effect of childbearing on female labor supply, we show that employing shape restrictions in linear instrumental variables (IV) models can lead to shorter confidence regions for both local and average treatment effects. Other applications we discuss include inference for the variability of quantile IV treatment effects and for bounds on average equivalent variation in a demand model with general heterogeneity.
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Halkos, George E. "Environmental Kuznets Curve for sulfur: evidence using GMM estimation and random coefficient panel data models." Environment and Development Economics 8, no. 4 (2003): 581–601. http://dx.doi.org/10.1017/s1355770x0300317.
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The purpose of this study is to test empirically the hypothesis of the inverted U-shaped relationship between environmental damage from sulfur emissions and economic growth as expressed by GDP. Using a large database of panel data consisting of 73 OECD and non-OECD countries for 31 years (1960–1990) we apply for the first time random coefficients and Arellano-Bond Generalized Method of Moments (A–B GMM) econometric methods. Our findings indicate that the EKC hypothesis is not rejected in the case of the A–B GMM. On the other hand there is no support for an EKC in the case of using a random coefficients model. Our turning points range from $2805–$6230/c. These results are completely different compared to the results derived using the same database and fixed and random effects models.
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Ahmad, Nur Aminah, Georgina M. Tinungki, and Nurtiti Sunusi. "Estimation of Dynamic Panel Data Regression Parameters Using Generalized Methods of Moment." Jurnal Matematika, Statistika dan Komputasi 18, no. 3 (2022): 484–91. http://dx.doi.org/10.20956/j.v18i3.20574.
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Panel data is a combination of cross section and time series. There are two panel data models, namely static and dynamic panel data. Because seeing the advantages of the dynamic panel data model which is able to overcome endogeneity problems related to the use of the dependent variable lag where in the static panel data model the use of the dependent variable lag causes the estimation results to be biased and inconsistent, so the author examines the dynamic panel data regression model. In the dynamic data model there is a lag of the dependent variable, this variable is correlated with error. Thus, estimation using OLS will result in a biased and inconsistent estimator. To overcome this, the dynamic panel data model can be estimated using the GMM Blundell-Bond approach. Based on the discussion, the parameter estimation formula for dynamic panel data regression using the Blundell-Bond GMM approach is as follows:
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Nyamita, Micah Odhiambo, and Nirmala Dorasamy . "Factors Influencing Debt Financing within State-owned Corporations in Kenya." Journal of Economics and Behavioral Studies 6, no. 11 (2014): 884–905. http://dx.doi.org/10.22610/jebs.v6i11.548.
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Debt financing is deemed crucial for economic development, as evidenced by the positive relationship between financial deepening and economic growth. Majority of studies on debt financing have been undertaken using data from developed economies, focusing more on private sector nonfinancial corporations. This study, therefore, attempts to fill the gap in the literature by investigating the factors influencing debt financing, using data from corporations within the public sector and from a developing economy. The study applied the fixed effects (FE), random effects (RE) and the general methods of moments (GMM), using the panel data regression analysis. Profitability, asset tangibility and corporation growth, were identified to be the main factors influencing debt financing within state-owned corporations in Kenya.
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Zheng, Changjun, Shumaila Meer, Atif Nadeem, and Samina Parveen. "Determinants of Profitability and Risk-taking in Pakistani Commercial Banks: Dynamic GMM Approach." Pakistan Business Review 25, no. 3 (2023): 214–34. http://dx.doi.org/10.22555/pbr.v25i3.973.
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The study used interest rate, exchange rate and banks size as variables of study. The panel data of 22 Pakistan commercial banks about2009 to 2020, STATA Panel Ordinary Least Square (OLS) and general methods of moments (GMM) estimator is used, and results indicate that in Pakistani banks management efficiency is has high power over shareholder to make profits and involve in risk taking projects. Bank size increase highlights better performance but and a disadvantage to use funds in investments for future growth. Diversification in banks is not a helpful factor to bring change in risk portfolios during financial crises. The liquidity inverse relation causes less availability of resource to boost financial performance and default lending result in credit risk. High proportion of assets utilized for personnel expense raise risk-taking ratio for operation in Pakistan. Banks should avoid the adverse selection of risks with proper performance policy, as to safeguard from hostile economic situations.
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Tan, Omer Faruk, Hakan Cavlak, Yasin Cebeci, and Necati Güneş. "The Impact of Geopolitical Risk on Corporate Investment: Evidence from Turkish Firms." Indonesian Capital Market Review 14, no. 1 (2022): 16–32. http://dx.doi.org/10.21002/icmr.v14i1.1138.
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This study analyzes the effects of geopolitical risk on the corporate investment of 164 Turkish manufacturing firms listed in Borsa Istanbul (BIST). The time covers the period from 2005 to 2019, applying the system Generalized Methods of Moments (GMM) estimator. The results indicate that geopolitical risk hurts corporate investment in Turkey. Under uncertainty induced by geographical risk, firms prefer to decline their investment. Additionally, financially constrained (non-dividend, small, young) firms are more negatively affected than financially unconstrained firms. Our findings are robust under alternative measures of geopolitical risk. Overall, this study reveals that geopolitical risk is a significant uncertainty affecting the investment decisions of manufacturing firms in Turkey
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Thrikawala, Sujani, Stuart Locke, and Krishna Reddy. "Dynamic endogeneity and corporate governance-performance relationship." Journal of Economic Studies 44, no. 5 (2017): 727–44. http://dx.doi.org/10.1108/jes-12-2015-0220.
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Purpose The purpose of this paper is to examine the relationship between corporate governance (CG) and microfinance institution (MFI) performance, using a dynamic panel generalised method of moments (GMM) estimator to mitigate the serious issues with endogeneity. Design/methodology/approach Inconsistent findings and a general lack of empirical results for the microfinance industry leave an unclear message regarding the impacts of CG on MFI performance, especially in emerging economies. The authors use GMM estimation techniques to examine whether CG has an influence on MFI performance. Findings This study confirms that the MFIs’ contemporaneous performance and CG characteristics are statistically significantly positively linked with their past performance. This study finds statistically significant governance effects on MFI performance, including the presence of international directors and/or donor representatives on the board, client representatives on the board, percentage of non-executive directors and the quality of the national governance system. Practical implications These findings provide some insights for policy-makers and practitioners to develop suitable policies and guidelines to streamline MFIs’ operations in emerging countries. Moreover, national and international investors and donors may use these finding as a benchmark for their investment and funding decisions. Originality/value This paper is the first to estimate the CG and performance relationship of MFIs in a dynamic framework by applying the GMM estimation method. This approach improves upon traditional estimation methods by controlling the likely sources of endogeneity. Further, this paper examines whether quality of national-level governance characteristics is related to performance measures of profitability and outreach of MFIs.
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Abonazel, Mohamed R., Mohamed Abdallah, and El-Housainy A. Rady. "On New Two-Step GMM Estimation of the Panel Vector Autoregressive Models with Missing observations." WSEAS TRANSACTIONS ON MATHEMATICS 21 (September 20, 2022): 671–83. http://dx.doi.org/10.37394/23206.2022.21.79.
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Few estimation methods were discussed to handle the missing data problem in the panel data models. However, in the panel vector autoregressive (PVAR) model, there is no estimator to handle this problem. The traditional treatment in the case of incomplete data is to use the generalized method of moment (GMM) estimation based on only available data without imputation of the missing data. Therefore, this paper introduces a new GMM estimation for the PVAR model in case of incomplete data based on the mean imputation. Moreover, we make a Monte Carlo simulation study to study the efficiency of the proposed estimator. We compare between two GMM estimators based on the mean squared error (MSE) and relative bias (RB) criteria. The first is the GMM estimation based on the list-wise (LW) and the second is the GMM estimation using the mean imputation (MI) at multi-missing levels. The results showed that the MI estimator provides more efficiency than the LW estimator.
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Damina, Emmanuel Kukah, Taiwo Muritala, and Abbas Umar Ibrahim. "Effect of Speed of Adjustments on Capital Structure Decision: A Conceptual Analysis." International Journal of Economics and Financial Issues 12, no. 6 (2022): 15–21. http://dx.doi.org/10.32479/ijefi.13469.
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This study conceptually examines the effect of speed of adjustments on capital structure decisions. The study provides a conceptual and theoretical underpinning focused on the review of several studies on the effect of speed of adjustments on capital structure decisions. The study discovered firm size, assets, growth, profitability, and other factors that influence the speed of adjustments. The findings from a prior study showed that estimators of the speed of adjustments include the regression analysis, generalized methods of moments (GMM) and stochastic frontier analysis (SFA) models without a predictive model. The study recommends for a generalized predictive model that determines the speed of adjustments to the optimum capital structure of firms.
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Anderl, Christina, and Guglielmo Maria Caporale. "Time-varying parameters in monetary policy rules: a GMM approach." Journal of Economic Studies 51, no. 9 (2024): 148–76. http://dx.doi.org/10.1108/jes-06-2023-0289.
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PurposeThe article aims to establish whether the degree of aversion to inflation and the responsiveness to deviations from potential output have changed over time.Design/methodology/approachThis paper assesses time variation in monetary policy rules by applying a time-varying parameter generalised methods of moments (TVP-GMM) framework.FindingsUsing monthly data until December 2022 for five inflation targeting countries (the UK, Canada, Australia, New Zealand, Sweden) and five countries with alternative monetary regimes (the US, Japan, Denmark, the Euro Area, Switzerland), we find that monetary policy has become more averse to inflation and more responsive to the output gap in both sets of countries over time. In particular, there has been a clear shift in inflation targeting countries towards a more hawkish stance on inflation since the adoption of this regime and a greater response to both inflation and the output gap in most countries after the global financial crisis, which indicates a stronger reliance on monetary rules to stabilise the economy in recent years. It also appears that inflation targeting countries pay greater attention to the exchange rate pass-through channel when setting interest rates. Finally, monetary surprises do not seem to be an important determinant of the evolution over time of the Taylor rule parameters, which suggests a high degree of monetary policy transparency in the countries under examination.Originality/valueIt provides new evidence on changes over time in monetary policy rules.
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Nyathi, Lawrence Dumisani, David Kureya, and Wilfred Petegumbo. "Role of Macroeconomic Factors Predicting Financial Performance of Commercial Banks in Zimbabwe 1990-2023." International Journal of Research and Innovation in Social Science IX, no. V (2025): 2048–62. https://doi.org/10.47772/ijriss.2025.905000161.
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The financial performance of commercial banks is intricately linked to the macroeconomic environment in which they operate. In Zimbabwe, a country characterized by economic volatility, hyperinflation, and fluctuating exchange rates, understanding the role of macroeconomic factors in shaping bank performance is critical. Therefore, this study investigates the extent to which key macroeconomic variables influence the profitability, stability, and overall financial health of commercial banks. Using a General Moments Methods (GMM) approach the study reveal that macroeconomic instability, particularly high inflation and volatile exchange rates, significantly impacts bank profitability and asset quality. Conversely, periods of economic growth and stable monetary policies are associated with improved financial performance. The study also highlights the resilience of Zimbabwean banks in navigating economic challenges, underscoring the importance of adaptive strategies and robust risk management practices.
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Velte, Patrick. "Corporate social responsibility performance, reporting and generalized methods of moments (GMM): A structured review of corporate governance determinants and firms financial consequences." Corporate Ownership and Control 19, no. 2 (2022): 8–27. http://dx.doi.org/10.22495/cocv19i2art1.
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In line with the business case argument for corporate social responsibility (CSR), CSR performance and reporting should lead to positive firms’ financial outputs. As CSR issues may be linked with greenwashing behavior and self-impression management, effective corporate governance as a monitoring tool should increase CSR reporting and performance. While empirical-quantitative research on CSR extremely increased since the last decade, endogeneity concerns impair the validity of research results. This paper focuses on one of the most important techniques to include endogeneity concerns: the generalized method of moments (GMM) as dynamic panel regression. This paper summarizes the results of archival research on corporate governance determinants and firms’ financial consequences of CSR performance and reporting. The increased importance of managing and reporting on CSR issues represents the key motivation to conduct a systematic literature review. By including 131 quantitative peer-reviewed empirical studies in this field, in line with legitimacy and stakeholder theory, there are indications that 1) gender diversity positively influences CSR performance, and 2) CSR performance increases both accounting- and market-based financial performance (ROA and Tobin’s Q). A research agenda with detailed research recommendations are provided for future studies
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Yasin, Mohammad Zeqi. "Mind the Gap: The Efficiency Convergence of ASEAN Plus Three Economies." Journal of Developing Economies 8, no. 2 (2023): 285–96. http://dx.doi.org/10.20473/jde.v8i2.43146.
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This study aims to examine the performance of technical efficiency convergence (Beta and Sigma convergences) of 10 ASEAN economies as well as other three main partners from East Asia, namely China, South Korea, and Japan for the years of 1990-2021, and addresses the determinants of this convergence consisting of foreign direct investment (FDI), export, and import. By using Stochastic Frontier Analysis to estimate technical efficiency as well as panel dynamic of Generalized Methods of Moment (GMM) to test convergence, we found robust findings of convergence moments, both the catching up effect (Beta Convergence) as well as inequality reduction (Sigma Convergence) across the countries. The effect of FDI inflow to the growth of technical efficiency growth is positive. Coupled to this, a higher ratio of export to the GDP affects positively to the efficiency growth by about 14%-26%. In contrast, importing causes diminishing efficiency growth. The effect of FDI is significant in reducing the inequalities of efficiency only in the period of 2006-2021. While export reveals positive significance in affecting efficiency gap, import discourages efficiency gap to enlarge, indicating that import substitution remains unable to be implemented in some countries to obtain efficiency.
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Bekapi, Trustmore. "Effects of Corporate Short-Termism on Organisational Resilience: Evidence from Listed Companies in Zimbabwe." International Journal of Research and Innovation in Social Science VII, no. X (2023): 252–71. http://dx.doi.org/10.47772/ijriss.2023.701023.
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This study examines the effects of corporate short-termism on organisational resilience, using a unique panel data set on a sample of 36 listed companies purposefully drawn from an array of industries in Zimbabwe from 2010 to 2018. By using the Arellano-Bover/Blundell-Bond System Generalised Methods of Moments (Sys-GMM) dynamic estimator, this study effectively addresses autocorrelation, hetero scedasticity and endogeneity in the analysis of panel data. The main results of this study suggest that strategic capital expenditures generate more benefits than tactical capital expenditures. However, additional results reveal that there is no material difference in the benefits generated by TCEs and SCEs when companies invest consistently. More importantly, the results of this study suggest that maintaining a right balance between short-term and long-term goals consistently guarantees organisational resilience.
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Xu, Ran, Richard P. DeShon, and Christopher R. Dishop. "Challenges and Opportunities in the Estimation of Dynamic Models." Organizational Research Methods 23, no. 4 (2019): 595–619. http://dx.doi.org/10.1177/1094428119842638.
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Interest in modeling longitudinal processes is increasing rapidly in organizational science. Organizational scholars often employ multilevel or hierarchical linear models (HLMs) to study such processes given that longitudinal data in organizational science typically consist of observations over a relatively small number of time intervals ( T) nested within a relatively large number of units ( N; e.g., people, teams, organizations). In this paper, we first distinguish change and dynamics as common research foci when modeling longitudinal processes and then demonstrate that a unique set of inferential hazards exists when investigating change or dynamics using multilevel models. Specifically, multilevel models that include one or more time-lagged values of the dependent variable as predictors often result in substantially biased estimates of the model parameters, inflated Type I error rates, and ultimately inaccurate inference. Using Monte Carlo simulations, we investigate the bias and Type I error rates for the standard centered/uncentered hierarchical linear model (HLM) and compare them with two alternative estimation methods: the Bollen and Brand structural equation modeling (SEM) approach and the Arrelano and Bond generalized method of moments using instrumental variables (GMM-IV) approach. We find that the commonly applied hierarchical linear model performs poorly, whereas the SEM and GMM-IV approaches generally perform well, with the SEM approach yielding slightly better performance in small samples with large autoregressive effects. We recommend the Bollen and Brand SEM approach for general use when studying change or dynamics in organizational science.
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Hasan, Rabia, and Dr Muhammad Aqil. "Financial Inclusion Convergence in Low-Income and Lower-Middle-Income Countries." Pakistan Business Review 25, no. 3 (2023): 268–90. http://dx.doi.org/10.22555/pbr.v25i3.943.
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The study used interest rate, exchange rate and banks size as variables of study. The panel data of 22 Pakistan commercial banks about2009 to 2020, STATA Panel Ordinary Least Square (OLS) and general methods of moments (GMM) estimator is used, and results indicate that in Pakistani banks management efficiency is has high power over shareholder to make profits and involve in risk taking projects. Bank size increase highlights better performance but and a disadvantage to use funds in investments for future growth. Diversification in banks is not a helpful factor to bring change in risk portfolios during financial crises. The liquidity inverse relation causes less availability of resource to boost financial performance and default lending result in credit risk. High proportion of assets utilized for personnel expense raise risk-taking ratio for operation in Pakistan. Banks should avoid the adverse selection of risks with proper performance policy, as to safeguard from hostile economic situations.
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Saini, Neha, and Monica Singhania. "Determinants of FDI in developed and developing countries: a quantitative analysis using GMM." Journal of Economic Studies 45, no. 2 (2018): 348–82. http://dx.doi.org/10.1108/jes-07-2016-0138.
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PurposeThe purpose of this paper is to investigate the potential determinants of FDI, in developed and developing countries.Design/methodology/approachThis paper investigates FDI determinants based on panel data analysis using static and dynamic modeling for 20 countries (11 developed and 9 developing), over the period 2004-2013. For static model estimations, Hausman (1978) test indicates the applicability of fixed effect/random effect, while generalized moments of methods (GMM) (dynamic model) is used to capture endogeneity and unobserved heterogeneity.FindingsThe outcome across different countries depicts diverse results. In developed countries, FDI seeks policy-related determinants (GDP growth, trade openness, and freedom index), and in developing country FDI showed positive association for economic determinants (gross fixed capital formulation (GFCF), trade openness, and efficiency variables).Research limitations/implicationsThe destination of FDI is limited to 20 countries in the present paper. The indicator of the institutional environment, namely economic freedom index, used in this paper has received some criticism in calculations.Practical implicationsThe paper enlists recommendations for future FDI policies and may assist government in providing a tactical framework for skill development, thereby increasing manufacturing growth rate. The paper also throws light on vertical and horizontal capital inflows considering resource, strategy, and market-seeking FDI.Social implicationsFDI may bring significant benefits by creating high-quality jobs, introducing modern production and management practices. It highlights how multinational corporations and government contribute to better working conditions in host countries.Originality/valueThe paper uncovers important features like macroeconomic variables, especially country-wise efficiency scores, policy variables, GFCF, and freedom index, for determining FDI inflows in 20 countries using panel data methods and provides a roadmap for developed and developing countries. The study highlights endogeneity and unobserved heteroscedasticity by applying GMM one- and two-step procedure.
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Vengesai, Edson, and Farai Kwenda. "The impact of leverage on discretionary investment: African evidence." African Journal of Economic and Management Studies 9, no. 1 (2018): 108–25. http://dx.doi.org/10.1108/ajems-06-2017-0145.
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Purpose The purpose of this paper is to explore the impact of leverage on firms’ discretionary investment in Africa. Design/methodology/approach The authors employ a dynamic panel data model estimated with generalised method of moments (GMM) estimation techniques on the panel data of listed African non-financial firms. A dynamic model and the generalised methods of moments estimations are handy in controlling for unobserved heterogeneity, endogeneity, autocorrelation, heteroscedasticity, etc. Findings In spite of different settings, markets, leverage levels and methodologies, the authors found evidence that leverage constrains investment in African firms. The negative impact is more pronounced in firms with low-growth opportunities than in firms with high-growth opportunities. The results are inclined to the theory that leverage plays a disciplinary role to avoid overinvestment. Research limitations/implications African firms’ investment policy does not solely depend on the neoclassical fundamentals determinants of profitability, net worth and cash flows. Financing strategy also has a considerable bearing on the investment policy. The results provide evidence that leverage is a negative externality to the firm’s discretional investment policy for both lowly levered and highly leveraged firms. African firms’ should consider maintaining their low debt levels and rely more on internally generated funds so as not to suppress any available cash flows to interest payments and loan covenants from debt holders. Originality/value The study contributes to the literature on investment and financial leverage by the authors providing evidence from Africa, a developing continent, that has not been explored. It shows how conservative leverage levels of African firms, which have been reported to be rising, are impacting on investments. Pertaining to empirical methodology, the authors employ a dynamic panel data model, the GMM estimation technique, which is robust in controlling endogeneity, and a possible bi-directional causality between leverage and investment which have not been used in literature. The study also enables a comparison of the effect of high leverage and low leverage on firm’s discretional investment.
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Banajit, Changkakati, and Kumar Jain Pradeep. "Medium Sized Firms in India and Their Dynamic Adjustment Towards Their Target Debt Equity Structure." International Journal of Management and Humanities (IJMH) 4, no. 10 (2020): 153–60. https://doi.org/10.35940/ijmh.J1010.0641020.
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There have been very few studies done over the world to determine the profitability of firms given the firms expected financial leverage or debt equity structure. Studies from all over the world have identified various factors that are vital in influencing the target debt equity structure of firms. However, different factors vary in terms of their influence on determining the optimal debt equity structure of firms for different countries. This paper researches into various firm specific factors for medium sized companies in India and makes an in-depth analysis to establish the relationship of their impact on medium sized firms which move towards the target debt equity structure through a dynamic process. The medium sized companies have been sampled keeping in mind the market capitalization of these firms in India. This research work tries to explain those factors which have an influence on achieving the optimum debt equity structure for medium sized firms and tries to study how these firms could use their resources in consolidating upon these firm specific factors for the overall profitability of the firms. This line of research has been rarely tried in the Indian context and it promises an innovative insight into scientific research on determining a firm’s profitability. This research work is based on a very unique analytical tool namely the General Method of Moments (GMM) which is a Nobel award winning analytical tool first proposed by its founder Lars Peter Hansen in 1982.This research work is purely quantitative and empirical in nature and is academically relevant for academicians and industry equally.
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Ali Ahmed, Huson Joher, and IKM Mokhtarul Wadud. "Market based performance: Do ownership structures, or firm policy choice matter?" Corporate Ownership and Control 8, no. 2 (2011): 89–95. http://dx.doi.org/10.22495/cocv8i2p8.
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This study examines whether the structure of share ownership or firm’s dividend and debt policies provide explanation for firm performances in Malaysia. Firm performance, measured as Tobin’s Q is modelled in a dynamic panel framework to estimate effects of director ownership, family ownership, foreign ownership, and firm’s dividend and debt policy. The generalised methods of moments (GMM) method is used to estimated the models for 80 CI components companies listed on Main Board of Malaysia observed from 1999 to 2002. The findings reveal strong evidence of positive impact of firm’s dividend and debt policy on firm performance. However, ownership structure seems to be less important for market based performance of Malaysian firms. These results are expected to provide guidelines to the investors regarding the significance of firm dividend policy, leverage policy and market to book value ratio as some of the key sources of value creation for Malaysian listed firms.
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Xiaoyang, Xu, Maurice Balibae Kanaado, and Motswedi Epadile. "The Impact of Technological Innovation, Research and Development, and Energy Intensity on Carbon Emissions: An Experience from BRICS and OECD Countries." International Journal of Sustainable Development & World Policy 11, no. 1 (2022): 1–17. http://dx.doi.org/10.18488/26.v11i1.2898.
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The impact of technological innovation, research and development, and energy intensity on carbon dioxide emissions is examined in this study. A panel data econometric analysis of relevant variables extracted from the OECD and World Development Indicators databases for 36 OECD and 5 BRICS countries from 2005 to 2018 reveals that the Kao panel cointegration test revealed all countries, BRICS countries, and OECD countries exhibited cointegrated relationships regarding the selected variables. At this point, the correlation matrix shows that none of the independent variables has a strong correlation coefficient with the dependent variable. We also used two regression methods to evaluate the long-run association between the study's variables; the two-stage least square (2SLS) and panel generalized method of moments (GMM) both provide similar results, indicating that they are robust. According to the findings, technological innovation and R&D have a positive association with CO2 emissions, but energy intensity has a negative relationship with CO2 emissions.
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Buah, Aku-Sika. "A Study on Entrepreneurship and Growth Nexus in High and Low-Income Countries : The Application of Panel Regression Estimation." Theory, Methodology, Practice 20, no. 1 (2024): 3–12. http://dx.doi.org/10.18096/tmp.2024.01.01.
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While common sense would suggest that entrepreneurship and economic growth are positively related, it remains unclear whether entrepreneurship is a primary predictor of economic growth conceptually and empirically. Evidence from the literature has revealed a mixed result. Some authors conclude that entrepreneurship drives economic growth positively and significantly. However, others found an inverse relationship between entrepreneurship and growth. Within the paper's framework, entrepreneurship's actual impact on growth across some selected high- and low-income countries has been brought to light. The discussion starts by measuring the degree of association among the variables across the selected clusters of countries. A panel estimation technique, more specifically the Generalized Methods of Moments (GMM) technique, is adopted to make the comparison. Data on 39 high-income countries as well as 24 low-income countries from the period of 1999 to 2019 were considered. It was observed that entrepreneurship positively impacts growth across high-income countries. However, entrepreneurship does not necessarily aid growth within low-income countries.
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Miloș, Marius Cristian, and Laura Raisa Miloș. "Use of Derivatives and Market Valuation of the Banking Sector: Evidence from the European Union." Journal of Risk and Financial Management 15, no. 11 (2022): 501. http://dx.doi.org/10.3390/jrfm15110501.
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(1) Background: This paper aims to investigate whether the derivatives usage by the banking sector in the European Union has impacted its market valuation in the aftermath of the financial crisis. (2) Methods: Our analysis takes 120 European financial institutions listed on the European Union stock exchange over a period of 14 years into account (2008–2021). We use the generalized method of moments (GMM) to assess whether the use of derivatives allows financial intermediaries to increase their market value. Control variables, such as size, profitability, expectations of the market, bank risk, liquidity performance, and financial condition, are also taken into consideration. (3) Results: Our main findings suggest that market value is affected negatively by derivative asset accumulation. (4) Conclusions: The results are in line with the studies that investigated the impact of financial derivatives on the market value and found a negative connection between the two, justified by the suboptimal hedging or the higher volatility of the earnings.
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Nurseiit, Nurlan. "Analysis of the Receipts of the National Fund of Kazakhstan." Eurasian Journal of Economic and Business Studies 2, no. 67 (2023): 45–56. http://dx.doi.org/10.47703/ejebs.v2i67.240.
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The article discusses the key factors determining the National Fund of Kazakhstan (NFK) accumulation from January 2005 to February 2017. As the main factors in this model, world oil prices, the share of deductions of oil companies' income to the fund, domestic oil production, the tenge exchange rate against the U.S. dollar and interest income on the fund's investments were considered. In order to explain these factors impact on the oil fund receipts, a relevant functional model was developed. The stationarity of the data series was checked using the Augmented Dickey Fuller unit root test. Verification of the model was conducted using different econometric methods, as the primary model used the least squares method (LSM). Using the generalized method of moments (GMM) helped overcome the problem of autocorrelation and heteroscedasticity and validate the model specification. The autoregressive conditional heteroscedasticity (ARCH) method and the Generalized Linear Model (GLM) were also used to test the basic models. The built econometric models confirmed that NFK's receipts positively depend on the tax rate on oil producing firms, world oil prices, and domestic oil production and negatively on the exchange rate of tenge. However, the increase in interest rates on the U.S. Treasury bonds did not increase the fund's income. This can mean either the ineffectiveness of its investments or the periodic withdrawal of the investment income. In general, the study should help understand the factors determining NFK's revenue and increasing its amount in the future.
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Ali, Wajid, Ambiya, and Devi Prasad Dash. "Examining the Perspectives of Gender Development and Inequality: A Tale of Selected Asian Economies." Administrative Sciences 13, no. 4 (2023): 115. http://dx.doi.org/10.3390/admsci13040115.
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The rising concern about gender inequality among the economies in South, South-East, and Eastern Asia motivates us to study the context of gender development in terms of bridging gender disparity. To show the impact, the data has been extracted from various authentic sources- Varieties of Democracy (V-Dem), World Bank Development Indicators database, Sustainable Development Index, The Observatory of Economic Complexity and Human Development Reports of the 24 South, South-East, and East Asian economies from period 2000–2020. This research was carried out empirically using various techniques such as the Ordinary Least Squared Method (OLS), Generalized Methods of Moments (GMM), and Generalised Quantile Regression. The findings of the research show a significant impact of FDI and Economic Complexity in the reduction of gender inequality. Along with this, access to justice and electoral democracy will be providing more representation to women by reducing the gender gaps. Several policy implications have been proposed following the results of the study.
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Azretbergenova, G. Zh, A. O. Syzdykova, A. Kenjegalieva, and A. Yessenali. "Determinants of foreign direct investments in Central Asian countries." Bulletin of "Turan" University, no. 4 (December 25, 2022): 76–88. http://dx.doi.org/10.46914/1562-2959-2022-1-4-76-88.
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The main purpose of this study is to examine the factors that determine FDI inflows to five countries in Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan). An empirical analysis covering the period of 1995–2021 was made in the study. Dynamic panel data analysis methods were used in the empirical analysis. The model was created by using five different variables (FDI in the previous period, economic growth, real effective exchange rate, macroeconomic stability and infrastructure) that are thought to affect FDI in Central Asian countries that are close to each other in economic terms. The created model was analyzed with the Generalized Moments Method (GMM) proposed by Arellano and Bond [1]. According to the results of the GMM estimation method, it is seen that the lagged value of FDI, economic growth, real effective exchange rate, macroeconomic stability variables are statistically significant and explain the dependent variable to a large extent. On the other hand, the infrastructure variable does not affect foreign direct investments. This study explores developing Central Asian countries, including Kazakhstan. The results of this study are important in knowing the factors that determine foreign direct investments in Central Asian countries. As a result, it can be thought that the success of the investments in the past period will encourage more foreign investment inflows in the following years. Economic growth of Central Asian countries is an important factor in influencing FDI. Fast-growing economies attract more FDI. Therefore, Central Asian countries need to take steps to create a suitable investment climate by eliminating macroeconomic problems such as inflation, insufficient infrastructure, and exchange rate instability in order to increase the amount of FDI.
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Bekapi, Trustmore. "Impact of Institutional Investors and Board Independence on Corporate Short-Termism: Longitudinal Evidence from Zimbabwe." International Journal of Research and Innovation in Social Science VII, no. IX (2023): 1531–52. http://dx.doi.org/10.47772/ijriss.2023.71027.
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This study examines the effects of institutional investors and board independence on corporate short-termism, using panel data for 36 listed companies in Zimbabwe from 2010 to 2018. By using the Arellano-Bover/Blundell-Bond system Generalised Methods of Moments (Sys-GMM) dynamic estimator, this study effectively addresses autocorrelation, heteroscedasticity and endogeneity in panel data analysis. The empirical results of this study revealed that institutional investors significantly influence managers to make myopic investment decisions, whereas independent non-executive directors reduce managers’ myopic tendencies. Additional analyses of the results confirms that INEDs mitigate managers’ myopic behaviour, whereas institutional investors increase the managers’ myopic behaviour. More so, this study found a significant and positive relation between dedicated institutional ownership and capital expenditures, which suggests that dedicated institutional investors help to reduce short-termism. Given that the results show that past short-termism begets more short-termism, the results of this study can help shareholders, policymakers, regulators and executives to understand the influence of institutional investors and board independence on long-term corporate investment decisions, which is an unexplored issue from the Zimbabwean context.
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Osabuohien-Irabor, Osarumwense, and Igor M. Drapkin. "FDI outflows and international trade nexus: Empirical evidence from country income groups." R-Economy 8, no. 4 (2022): 340–55. http://dx.doi.org/10.15826/recon.2022.8.4.026.
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Relevance. Outward foreign direct investment (OFDI) and international trade are traditionally viewed as key drive of economic integration and globalization. At the same time, the relationship between these phenomena is ambiguous both from theoretical and empirical points of view. This study contributes to the existing literature by analyzing the relationship between outward foreign direct investment and international trade for countries with different levels of income per capita. Research objective. This study examines the dynamic interplay between OFDI and international trade in different income groups such as low-income (LIC), low-middle income (LMIC), upper-middle income (UMIC), and high-income (HIC) groups. Data and methods. Based on World bank country income classifications, data from 161 countries are divided into LIC, LMIC, UMIC, and HIC for the period 1998-2019. The study employs the Difference (DFF-GMM) and two-step System Generalized Method of Moments (SYS-GMM) techniques to explore the OFDI-trade nexus. Results. The results are mixed and significant providing support for both complementarity and substitutive FDI. Findings suggest that OFDI and trade nexus in LIC have negative impact indicating a substitutive effect, but in other economies, the impact is significantly positive and complementary. Conclusions. Trade and OFDI nexus are substitutive in LIC, hence sound economic policy, aimed at increasing country’s international competitiveness, should be adopted. However, trade and OFDI in LMIC, UMIC and HIC economies have mutually complementary relationship that facilitates the improvement of the domestic economy. Thus, government should promote policies that sustain the benefits of OFDI and trade interactions.
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Hapsari, Rahma Dian, and Imam Prakoso. "Penanaman Modal Dan Pertumbuhan Ekonomi Tingkat Provinsi Di Indonesia." Jurnal Ekonomi dan Bisnis 19, no. 2 (2016): 211. http://dx.doi.org/10.24914/jeb.v19i2.554.
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<p><em>This research examines the impact whether foreign direct investment (PMA) can significantly influence the gross domestic regional product ( PDRB ) and how moderation variable of Unemployment Rate (TPT) and Human Development Index (IPM) also influence to Indonesian provinces as the research objects of this study. The data was taken from 2004-2013 (10 years). By using General Methods of Moments (GMM), this research shows PMA does not have any impact on economic growth. On the other hand, domestic direct investment (PMDN) is able to increase economic growth. This implies that PMA only funded the needs to less strategic investment sector. To boost up evenly the provincial economic growth, government should increase the incentive on investment to attract foreign investors to invest on less strategic sectors, and create incentive for domestic investors to maintain the business. Another conclusion is Indonesian workers are not developed due to the presence of PMA, and it indicates that there is no transfer of technology. Government needs to maintain PMDN and attract investors to invest in other sectors that are still not efficiently managed by PMDN.</em></p>
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Yu, Haidong, and Juanjuan Zhao. "The Impact of Environmental Conditions on Urban Eco-Sustainable Total Factor Productivity: A Case Study of 21 Cities in Guangdong Province, China." International Journal of Environmental Research and Public Health 17, no. 4 (2020): 1329. http://dx.doi.org/10.3390/ijerph17041329.
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Environmental protection has attracted much attention. This study first describes the status of the ecological environment and then uses data envelopment analysis and the system the system generalized method of moments (GMM) model to study the relationship between the environmental status and ecological sustainable total factor productivity (ESTFP) in 21 prefecture-level cities of Guangdong Province. The main conclusions of this study are as follows. (1) The ecological index (EI), which reflects the ecological environment, shows a general trend of first decreasing and then rising. The average EI value decreased from 80.95 in 2008 to 68.71 in 2011 and then gradually increased to 74.76 in 2017. (2) The ecological sustainable total factor productivity (ESTFP = 0.960), including the two additional dimensions of the urban resource consumption index (URCI) and urban pollution discharge index (UPDI), is better than the traditional total factor productivity (TFP = 0.954). (3) The EI has a highly significant positive promoting effect on ESTFP at a significance level of 1%. The methods and results from this research provide an important scientific reference for the research on urban production efficiency and sustainable urban development in China.
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Joshi, Prathibha, and Kris Aaron Beck. "Biological Oxygen Demand and Economic Growth: An Empirical Investigation." Water Economics and Policy 01, no. 02 (2015): 1550001. http://dx.doi.org/10.1142/s2382624x15500010.
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Economic development frequently contributes to a decline in water quality; industrial effluents entering the water cause an increase of bacteria that strip the water of its oxygen, often then leading to mass die-offs of other aquatic life. However, the environmental Kuznets curve (EKC) suggests that rising water pollution due to continuing economic growth ultimately stabilizes and then decreases, thus eventually resulting in more oxygenated water that can meet the biological oxygen demand (BOD) required by aquatic life. Yet previous studies have found mixed results for a BOD EKC, with some researchers confirming the inverted U scale of the EKC but others finding different patterns. We therefore re-evaluate the interaction between economic growth and water quality by using a balanced dataset from 1979–1995 and the more dynamic econometric technique of Arellano–Bover/Blundell–Bond generalized methods of moments (GMM) estimator. We compare different samples of OECD and non-OECD countries to determine the likelihood of an EKC. The results show that the OECD countries have an N-shaped curve and that the EKC only emerges with a general sample of non-OECD countries.
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Guan, Thew Kim. "Impact of foreign direct investment on economic growth: The role of financial development in the context of developing economies." Asian Journal of Economics and Empirical Research 11, no. 2 (2024): 141–48. https://doi.org/10.20448/ajeer.v11i2.6388.
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According to economic theory, foreign direct investment inflows (hereafter “FDI”) are a crucial catalyst for stimulating economic growth, as FDI has the capacity to attract technology, leading to a subsequent rise in economic growth (hereafter “EGT”). Scholars continue to debate the convincing clarification of the direct impact of FDI on economic growth (thereafter “EGT”), despite the frequent emphasis on the absorptive capacity of host nations. This uncertainty may arise from neglecting the influence of specific conditioning factors. This study aims to examine the empirical relationship between FDI and EGT in the case of seventy developing nations during 1990-2023. Additionally, the study seeks to evaluate whether the impact of FDI on EGT varies according to the level of financial development. This paper specifically addresses the endogeneity problem by employing the General Methods of Moments (GMM) to estimate the instrumental variable approach. The empirical investigation reveals that there exists a specific level of financial development (hereafter “FND”), known as a threshold, at which FDI begins to positively affect EGT. Conversely, below this threshold, FDI has a detrimental effect on EGT. Policymakers in emerging nations should consider the level of domestic financial development to benefit from increasing foreign investment.
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Mdandalaza, Zuko, and Leward Jeke. "Basel III capital regulation and bank profitability in the emerging market." Risk Governance and Control: Financial Markets & Institutions 15, no. 1, special issue (2025): 150–62. https://doi.org/10.22495/rgcv15i1sip1.
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The Basel Committee on Banking Supervision (BCBS) introduced Basel III in 2010 in response to the 2007/2008 global financial crisis, to strengthen the banking sector by imposing higher capital and liquidity requirements (BCBS, 2010). The intention is to bolster resilience and avert the domino effect on the real economy. However, there are concerns regarding its potential influence on bank profitability (Al-Sharkas & Al-Sharkas, 2022). This study examines the impact of Basel III capital regulation on the profitability of South African banks and adds to the ongoing discourse on the nexus between banking regulations and bank performance. Utilizing the general methods of moments (GMM) estimation on a dataset of 10 banks spanning 2010 to 2022, the results show an insignificant negative effect of Basel III capital requirements on South African banks, possibly due to stringent oversight by the South African Reserve Bank (SARB). Additionally, the evidence implies that South African banks have successfully adapted to the new regulatory environment, complying with Basel III requirements without sacrificing their profitability. This resilience indicates a robust banking sector that is capable of withstanding regulatory changes without a detrimental impact on profitability.
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Saddiq, Sani Abubakar, and Abu Sufian Abu Bakar. "Persistence of bribery in West African countries." Journal of Financial Crime 27, no. 2 (2020): 651–62. http://dx.doi.org/10.1108/jfc-10-2019-0129.
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Purpose The purpose of this paper is to empirically test persistence of bribery transactions in West African countries in spite of combative policy measures put in place by various governments in the sub-continent. Design/methodology/approach Data for this paper is obtained from the data set of Trace International’s Bribery Risk Matrix covering 2016 to 2018. The matrix is used to allow firms to determine risks associated with contact with government officials in a particular country. The data set is used to test this paper’s hypotheses. The generalize methods of moments (GMM) was used to estimate panel data of 16 West African Countries in STATA 14.0. Findings The result of the estimations reveals that in spite of combative policy measures put in place and millions of dollars spent, bribery is on the increase in West African countries. Originality/value Prior studies tend to focus on prevalence and pervasiveness of bribery transactions across the globe. This paper is one of the few that focuses on persistence of bribery particularly in West African countries.
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Bada, Oladejo Tokunbo, Kehinde Adekunle Adetiloye, Felicia Omowunmi Olokoyo, and Grace Ukporhe. "Determinants of International Reserves Among Organisation of Petroleum Exporting Countries (OPEC)." Comparative Economic Research. Central and Eastern Europe 25, no. 3 (2022): 111–33. http://dx.doi.org/10.18778/1508-2008.25.24.
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Member countries of the Organisation of Petroleum Exporting Countries (OPEC) are always in the news regarding the prices and supply of crude oil to the international market. One of the economic reasons for this is liquidity and the desire to accumulate international reserves by the respective countries. This paper examined the determinants of international reserves among the cartel against the backdrop of the motives for keeping reserves. With data from 2005 to 2018, the adopted variables that were tested with the system of generalised methods of moments (Sy‑GMM) are inflation, exchange rates, oil prices, crude oil dependence, economic crises and others. The results and outputs show that inflation was negatively impactful externally and internally, while FDI inflows recorded negative significance. Economic crises and economic openness were positively significant, while oil prices and exchange rates were not significant determinants of international reserves accumulation. The paper recommends the maximisation of opportunities available by members during economic crises to accumulate reserves that will enable them to diversify from dependence on crude oil exports to include other products and a higher level of openness to open the economy up for competition to make the economies stronger.
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Tsaurai, Kunofiwa. "Human Capital Development, Remittances, and Poverty in Central and Eastern European Countries: What Do the Data Tell Us?" Comparative Economic Research. Central and Eastern Europe 25, no. 1 (2022): 23–38. http://dx.doi.org/10.18778/1508-2008.25.02.
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The study investigates the impact of human capital development on poverty in Central and Eastern European Countries (CEECs) using dynamic generalized methods of moments (GMM), fixed effects, random effects, and pooled ordinary least squares (OLS) with panel data ranging from 2008 to 2019. Using the same panel data analysis methods and data set, the study also explored the influence of the complementarity between human capital development and personal remittances on poverty in CEECs. What triggered the investigation into this topic is that the available literature on the subject matter is mixed, divergent, and very much conflicting. The lag of poverty, remittances, the interaction between human capital development and remittances, trade openness, unemployment, and partly financial development significantly increased infant mortality rates in CEECs. On the other hand, human capital development, infrastructural development, and partly financial development were found to have reduced infant mortality rates. These results mean that human capital development, financial development, and infrastructural development reduced poverty in CEECs during the period under study. Central and Eastern European Countries are therefore urged to craft and implement financial development, infrastructural development, and human capital development enhancement policies to combat poverty. Future empirical research could also investigate at what threshold the level of human capital development, financial and infrastructural development would poverty be significantly reduced in CEECs.
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Maarouf, Ayoub Abderrazak, Fella Hachouf, and Soumia Kharfouchi. "Exemplar-Based Texture Synthesis Using Two Random Coefficients Autoregressive Models." Image Analysis & Stereology 42, no. 1 (2023): 37–49. http://dx.doi.org/10.5566/ias.2872.
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Example-based texture synthesis is a fundamental topic of many image analysis and computer vision applications. Consequently, its representation is one of the most critical and challenging topics in computer vision and pattern recognition, attracting much academic interest throughout the years. In this paper, a new statistical method to synthesize textures is proposed. It consists in using two indexed random coefficients autoregressive (2D-RCA) models to deal with this problem. These models have a good ability to well detect neighborhood information. Simulations have demonstrated that the 2D-RCA models are very suitable to represent textures. So, in this work, to generate textures from an example, each original image is splitted into blocks which are modeled by the 2D-RCA. The proposed algorithm produces approximations of the obtained blocks images from the original image using the generalized method of moments (GMM). Different sizes of windows have been used. This study offers some important insights into the newly generated image. Satisfying obtained results have been compared to those given by well-established methods. The proposed algorithm outperforms the state-of-the-art approaches.
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Osinubi, Tolulope, Folorunsho Ajide, and Fisayo Fagbemi. "The Moderating Role of Governance in the Globalisation-Life Expectancy Nexus: Implications for Socioeconomic Development." Economics and Culture 20, no. 2 (2023): 46–63. http://dx.doi.org/10.2478/jec-2023-0015.
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Abstract Research Purpose: One of the most recent global aims is to increase life expectancy since healthy people are seen as human capital that may boost the economy. The study investigates the role of governance in the globalisation-life expectancy nexus using 39 African countries between 1996 and 2019. Design/Methodology/Approach: The study uses a Panel-Spatial Correlation Consistent augmented with the Least Square Dummy Variables (PSCC-LSDV) approach. The study uses a dynamic two-step system, the Generalised Method of Moments (GMM), as a robust model to solve the endogeneity problem. Findings The results from the PSCC-LSDV approach reveal that globalisation increases life expectancy in the selected African countries.The approach is more efficient since it can be used with cross-sectional dependent variables when other techniques like fixed and random effects methods may be ineffective. Likewise, the result from the GMM estimator is consistent with the PSCC-LSDV approach. The effect of globalisation on the life expectancy nexus without the inclusion of governance is positive. Meanwhile, the moderating (interactive) effect of governance on the relationship between globalisation and life expectancy is negative, indicating that globalisation and governance are substitutes for each other. This means that globalisation positively influences life expectancy, but the governance conditions in Africa weaken this positive effect. Originality/ Value/ Practical Implications Previous studies have shown that globalisation can have a negative, a positive or an insignificant effect on life expectancy in different countries. This discrepancy may arise from the use of different methods, different variables being measured, or different countries. None of these studies, to our knowledge, look at the moderating effect of governance on the globalisation-life expectancy nexus. Furthermore, unlike this study, most studies that look into the role of governance in the relationship between globalisation and life expectancy do not employ an aggregate index. The moderating role of governance from the two approaches confirms that governance interacts with globalisation to weaken the positive impact of globalisation on life expectancy. Put differently, the existence of poor governance in the African region drains the positive effect of globalisation on life expectancy in Africa. However, we expect life expectancy in African countries to improve in the face of good governance.
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Mupondo, Ndava Constantine. "Liquidity, Trading Activity, and Stock Price Volatility." Finance & Economics Review 4, no. 2 (2022): 12–25. http://dx.doi.org/10.38157/fer.v4i2.482.
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Purpose: While the bulk of previous research focused on security-level volatility and the relationship of its determinants, the current study considers the relationship between the number of trades, lagged absolute returns, trading volume, bid-ask spread, and price volatility on the Zimbabwe stock market. Methods: The study applied Hausman's (1982) tests of the specification. The parameters and elasticity of explanatory variables have been estimated by utilizing the Generalized Method of Moments (GMM) procedure in a five-equation structural model. The data were obtained from a web-based financial market platform, Investing.com for the period between 2009 and 2021. Results: Results show that inflation had a positive relationship with stock price volatility, which provided a hedge against inflation. There exists an indistinguishable difference between the random effects (RE) and fixed effects (FE) results and those obtained using the Pooled Ordinary Least Squares (POLS) on the total sample reflecting a cohesion of these findings. Implications: Understanding the relationship between inflation and market risk (volatility) can be beneficial to the investor in selecting the appropriate and most convenient investment strategy. From a policy-making perspective, strategic policy measures employed towards reducing inflation would certainly reduce stock market volatility and boost investor confidence.
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Djokoto, Justice Gameli. "Level of development, foreign direct investment and domestic investment in food manufacturing." F1000Research 10 (February 4, 2021): 72. http://dx.doi.org/10.12688/f1000research.28681.1.
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Background: Whilst the literature on the complementarity and substitutability of foreign direct investment (FDI) on domestic investment (DI) is not uncommon, the facet of food manufacturing is non-existent. This paper fills this void by investigating the effect of FDI on DI in the food manufacturing sector for developing, economies in transition and developed countries. Methods: Using an unbalanced panel data of 49 countries from 1993 to 2016, from FAOSTAT, estimated by the system generalised method of moments (GMM), the Wald statistics for the short and long-run effects of FDI on DI were computed for the development groups. Results: Developed economies experienced a crowd-out effect of FDI on DI in the short run, whilst the others experienced no significant effect. In the case of the long run, food manufacturing sectors of all three development groups exhibited a crowd-out effect. The effect in the long run for all development groups together is a crowd-in. Analysing all country groups together could mask the results of the various country groups. Conclusions: A review of investment policies to priorities FDI entry mode that favour domestic investment is needed. Improvement of the investment regulatory and administrative efficiency among others are recommended.
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Djokoto, Justice Gameli. "Level of development, foreign direct investment and domestic investment in food manufacturing." F1000Research 10 (March 11, 2021): 72. http://dx.doi.org/10.12688/f1000research.28681.2.
Full textAbstract:
Background: Whilst the literature on the complementarity and substitutability of foreign direct investment (FDI) on domestic investment (DI) is not uncommon, the facet of food manufacturing is non-existent. This paper fills this void by investigating the effect of FDI on DI in the food manufacturing sector for developing, economies in transition and developed countries. Methods: Using an unbalanced panel data of 49 countries from 1993 to 2016, from FAOSTAT, estimated by the system generalised method of moments (GMM), the Wald statistics for the short and long-run effects of FDI on DI were computed for the development groups. Results: Developed economies experienced a crowd-out effect of FDI on DI in the short run, whilst the others experienced no significant effect. In the case of the long run, food manufacturing sectors of all three development groups exhibited a crowd-out effect. The effect in the long run for all development groups together is a crowd-in. Analysing all country groups together could mask the results of the various country groups. Conclusions: A review of investment policies to priorities FDI entry mode that favour domestic investment is needed. Improvement of the investment regulatory and administrative efficiency among others are recommended.
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Djokoto, Justice Gameli. "Level of development, foreign direct investment and domestic investment in food manufacturing." F1000Research 10 (July 1, 2022): 72. http://dx.doi.org/10.12688/f1000research.28681.3.
Full textAbstract:
Background: Whilst the literature on the complementarity and substitutability of foreign direct investment (FDI) on domestic investment (DI) is not uncommon, the facet of food manufacturing is non-existent. This paper fills this void by investigating the effect of FDI on DI in the food manufacturing sector for developing, economies in transition and developed countries. Methods: Using an unbalanced panel data of 49 countries from 1993 to 2016, from FAOSTAT, estimated by the system generalised method of moments (GMM), the Wald statistics for the short and long-run effects of FDI on DI were computed for the development groups. Results: Developed economies experienced a crowd-out effect of FDI on DI in the short run, whilst the others experienced no significant effect. In the case of the long run, the food manufacturing sectors of all three development groups exhibited a crowd-out effect. The effect in the long run for all development groups together is a crowd-in. Analysing all country groups together could mask the results of the various country groups. Conclusions: A review of investment policies to prioritise FDI entry mode that favour domestic investment is needed. Improvement of the investment regulatory and administrative efficiency among others are recommended.