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1
Janjua, Pervez Zamurrad, Malik Muhammad, and Muhammad Usman. "Impact of Project and Programme Aid on Economic Growth: A Cross Country Analysis." Pakistan Development Review 57, no. 2 (June 1, 2018): 145–74. http://dx.doi.org/10.30541/v57i2pp.145-174.
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This study examines the impact of foreign aid instruments, namely Project Aid and Programme Aid, on economic growth of 27 aid-receiving countries. The study constructs a system of three equations, i.e. growth, investment and human capital. Using the Generalised Method of Moment estimation technique, the study concludes that while Project Aid has a positive and significant impact on economic growth, Programme Aid has an insignificant impact on economic growth. Additionally, the study finds that economic policies do enhance effectiveness of aid at aggregate level. Therefore, the capacity of aid-recipient countries to effectively use their resources for economic development needs due consideration. Keywords: Project Aid, Programme Aid, Economic Growth, Conditionality, Procurement Reform, System Equation Method, Generalised Method of Moment (GMM), Principal Component Analysis
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Haliti, Bersan, Safet Merovci, Sanjib SHERPA, and Alban Hetemi. "The impact of the Ease Doing Business Indicators on Foreign Direct Investment in the European transition economies." Ekonomika 98, no. 2 (January 6, 2020): 19–32. http://dx.doi.org/10.15388/ekon.2019.2.2.
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The objective (aim) of this paper is to explore the impact of the Ease of Doing Business Indicators on FDI on transition economies in Europe. Authors have used the dynamic panel methodology, by using three methods: Pooled Ordinary Least Square (POLS), Fixed Effect (FE), and Two Step-System Generalised Method of Moments (GMM) estimation techniques. By referring to the GMM technique, it can be seen that variables such as: Starting a Business, Registering property, Getting electricity and Resolving insolvency have a positive and significant impact in attracting FDI in 16 European transition countries, while variables as: Dealing with construction permits, Getting credit, Paying taxes, Protecting minority investors, have shown negative impact, whereas Trading Across Border and Enforcing contracts have not shown any impact on attracting FDIs in European transition countries. This paper contributes to the enrichment of existing literature in this field by using these three methods.
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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 (March 12, 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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Puspitasari, Widyaningsih Ratna. "Dampak Belanja Pemerintah Terhadap Konversi Hutan ke Pertanian di Indonesia." Jurnal Borneo Administrator 14, no. 3 (December 2, 2018): 213–27. http://dx.doi.org/10.24258/jba.v14i3.370.
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This study analyzes the impacts of government spending on land use conversion from forest to agriculture based on national budget allocation in Indonesia. As agriculture expansion and the government spending on agriculture increase especially during this more than ten-year period, it is suspected that the conversion of land from forest to agriculture gradually increases. Therefore, the increase of government spending on agriculture may be one of the contributing factors to deforestation. Balanced panel data from 33 provinces in Indonesia that covers a ten-year period between 2006 and 2015 was used to examines the indirect effects of government spending on agriculture, total government spending over GRDP, and public spending on land use conversion. The generalized method of moment estimation (GMM) technique was applied in this research to investigate relationship between government spending and deforestation. The result showed that there is an indirect impact from increasing government spending: there is an increase in the total amount of land use conversion from forest to agriculture in Indonesia. This study depicts that an increase in government spending on agriculture and total government spending over GRDP have a significant positive impact on deforestation. Meanwhile, public spending has no significant effect on deforestation.
Keywords: Deforestation, GMM, government spending
Abstrak
Penelitian ini bertujuan untuk menganalisa dampak belanja pemerintah terhadap deforestasi, berdasarkan anggaran nasional belanja pemerintah di Indonesia. Meningkatnya perluasan lahan pertanian yang diikuti dengan peningkatan belanja pemerintah untuk sektor pertanian dalam kurun waktu lebih dari 10 tahun terakhir ini memungkinkan terjadinya peningkatan konversi lahan. Peningkatan belanja pemerintah yang ditujukan untuk sektor pertanian dapat menjadi salah satu faktor pemicu deforestasi. Menggunakan panel data dari 33 provinsi di Indonesia selama 10 tahun, dari tahun 2006 s.d 2015, penelitian ini mengkaji dampak tidak langsung dari belanja pemerintah di bidang pertanian, total belanja pemerintah per PDRB, dan belanja pemerintah di public sector terhadap deforestasi. Menggunakan system generalized method of moment estimation (GMM), penelitian ini menganalisa hubungan antara belanja pemerntah dan deforestasi. Hasil empirik menunjukkan bahwa terdapat dampak tidak langsung dari peningkatan belanja pemerintah: adanya peningkatan konversi lahan dari hutan untuk pertanian. Penelitian ini juga menunjukkan bahwa peningkatan belanja pemerintah di bidang pertanian dan total belanja pemerintah per PDRB memiliki dampak siknifikan terhadap deforestasi. Sedangkan belanja pemerintah untuk sector public tidak memiliki dampak untuk meningkatkan deforestasi.
Kata kunci : Deforestasi, GMM, belanja pemerintah
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Zada, Naseeb, Malik Muhammad, and Khan Bahadar. "Determinants of Exports of Pakistan: A Country-wise Disaggregated Analysis." Pakistan Development Review 50, no. 4II (December 1, 2011): 715–32. http://dx.doi.org/10.30541/v50i4iipp.715-732.
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Given the importance of international trade and export performance in economic growth, this study attempts to examine the determinants of exports of Pakistan, using a time series data over the period 1975-2008. A simultaneous equation approach is followed and the demand and supply side equations are specified with appropriate variables. This is a country-wise disaggregated analysis of Pakistan versus its trade partners and the estimation strategy is based on two approaches. First we employ the Generalised Methods of Moments (GMM), which is followed by the Empirical Bayesian technique to get consistent estimates. The GMM technique is believed to be efficient for time series data provided the sample size is sufficiently large. In case of small samples, the estimates might not be precise and might appear with unbelievable sign and insignificant magnitudes. To avoid the sample bias and other problems, we employ the Empirical Bayesian technique which provides much precise estimates. The factual results obtained via the GMM technique are a little bit mixed, although most of the coefficients are found to be statistically significant and carry their expected signs. In order to compare and validate these results, the Empirical Bayesian technique is employed. This offers considerable improvement over the previous results and all the variables are found to be highly significant with correct sign across the countries concerned with the exception of a few cases. The price and income elasticities in both the demand and supply side equations carry their expected signs and significant magnitudes for the trading partners. The findings suggest that exports of Pakistan are much sensitive to changes in the world demand and world prices. This establishes the importance of demand side factors like world GDP, Real exchange rate, and world prices to determine the exports of Pakistan. On the supply side, we find relatively small price and income elasiticities. The results reveal that demand for exports is relatively higher for countries in NAFTA, European Union and Middle East regions. The study recommends particular concentration on the trade partners in these regions to improve the export performance of Pakistan. Keywords: Exports, GMM, Empirical Bayesian Method, Pakistan
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Jamil, Faisal, and Eatzaz Ahmad. "An Empirical Study of Electricity Theft from Electricity Distribution Companies in Pakistan." Pakistan Development Review 53, no. 3 (September 1, 2014): 239–54. http://dx.doi.org/10.30541/v53i3pp.239-254.
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Electricity theft is a common problem in many countries and energy worth billions of dollars is stolen annually from electricity grids. The problem has socioeconomic, political, environmental and technical roots, but the solution is generally sought solely through technical measures. This paper empirically investigates the effects of various factors including electricity price, per capita income, probability of detection, fines collected from offenders, weighted temperature index and load shedding, that may explain the theft. The study employed annual panel data obtained from nine electricity distribution companies in Pakistan for the period 1988–2010. The study estimates the Fixed Effects models through the least squares dummy variable (LSDV) technique and Generalised Method of Moments (GMM). Our results indicate that per capita income has significant negative and electricity price a positive effect on electricity theft with sufficiently high coefficient values. The probability of detection variable appears with a positive sign in both estimations indicating a poor deterrence. The results of LSDV show a positive impact of fine on conviction on electricity theft. But in GMM estimation, this variable appears with a right sign. The results from both models are robust in the case of load shedding and temperature variables. The findings show that economic variables are most significant in explaining electricity theft. The findings may also be applicable in other developing countries where hefty amounts of revenues are lost due to electricity theft. Keywords: Electricity Theft, Fixed Effects Model, Pakistan
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Haque, Faizul, and Rehnuma Shahid. "Ownership, risk-taking and performance of banks in emerging economies." Journal of Financial Economic Policy 8, no. 3 (August 1, 2016): 282–97. http://dx.doi.org/10.1108/jfep-09-2015-0054.
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Purpose This paper examines the effect of ownership structure on bank risk-taking and performance in emerging economies by using India as a case study. Design/methodology/approach We use generalised method of moments (GMM) estimation technique to analyse an unbalanced panel data set covering 217 bank-year observations from 2008 to 2011. Findings Overall, our study results suggest that government ownership is positively associated with default risk and negatively related to bank profitability. Interestingly, we find foreign ownership having a positive effect on default risk and a negative effect on profitability among the listed commercial banks. The effect of ownership concentration on bank risk-taking and profitability appears to be statistically insignificant. Originality/value This study is among the first to consider the impact of ownership on bank risk-taking and profitability from an emerging economy perspective. It also addresses the problem of endogenous relationships among ownership, risk-taking and performance of a bank. This study is likely to have implications for policymakers in undertaking regulatory reforms relating to ownership, risk management and banking sector stability.
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Shahzad, Sehrish, and Bushra Yasmin. "Does Fiscal Decentralisation Matter for Poverty and Income Inequality in Pakistan?" Pakistan Development Review 55, no. 4I-II (December 1, 2016): 781–802. http://dx.doi.org/10.30541/v55i4i-iipp.781-802.
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This study endeavours to investigate the impact of fiscal decentralisation on the welfare concerns of poverty, and income inequality in Pakistan for the time period 1972 to 2013. In order to capture the multi-dimensional nature of fiscal decentralisation, three indicators are used namely; revenue decentralisation, expenditure decentralisation and composite decentralisation. Further, the role of institutional quality is also incorporated in apprehending the responsiveness of welfare issues towards the process of fiscal decentralisation. The estimation technique of Generalised Method of Moments (GMM) is employed for estimating the impact of fiscal decentralisation on poverty and income inequality. The empirical findings suggest that fiscal decentralisation has discretely resulted in increasing poverty and income inequality in Pakistan, but the presence of better institutional quality along with fiscal decentralisation can promise to mitigate the negative consequences of fiscal decentralisation for poverty and income inequality in Pakistan. Although, the indirect effect of fiscal decentralisation on welfare concerns, through institutional quality exhibits a fluctuating trend over time, but its average marginal effect is lower than the direct effect of fiscal decentralisation on welfare concerns. Hence, it can be perceived that the log-run welfare issues can be tackled effectively in the presence of institutional quality with a rational level of fiscal decentralisation. Also in order to reap the potential benefits of fiscal decentralisation for poverty and income inequality that has remained a catastrophe in case of Pakistan. JEL Classification: I3, 023 H53 Keywords: Fiscal Decentralisation, Welfare
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Hu, Yi, Xiaohua Xia, Ying Deng, and Dongmei Guo. "Higher Order Mean Squared Error of Generalized Method of Moments Estimators for Nonlinear Models." Discrete Dynamics in Nature and Society 2014 (2014): 1–8. http://dx.doi.org/10.1155/2014/324904.
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Generalized method of moments (GMM) has been widely applied for estimation of nonlinear models in economics and finance. Although generalized method of moments has good asymptotic properties under fairly moderate regularity conditions, its finite sample performance is not very well. In order to improve the finite sample performance of generalized method of moments estimators, this paper studies higher-order mean squared error of two-step efficient generalized method of moments estimators for nonlinear models. Specially, we consider a general nonlinear regression model with endogeneity and derive the higher-order asymptotic mean square error for two-step efficient generalized method of moments estimator for this model using iterative techniques and higher-order asymptotic theories. Our theoretical results allow the number of moments to grow with sample size, and are suitable for general moment restriction models, which contains conditional moment restriction models as special cases. The higher-order mean square error can be used to compare different estimators and to construct the selection criteria for improving estimator’s finite sample performance.
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Al-Khouri, Ritab. "Determinants of foreign direct and indirect investment in the MENA region." Multinational Business Review 23, no. 2 (July 20, 2015): 148–66. http://dx.doi.org/10.1108/mbr-07-2014-0034.
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Purpose – This study aims to examine the factors affecting the foreign direct investment (FDI) and foreign portfolio investment (FPI) flows among the 16 economies comprising the Middle East and North African (MENA) region. Design/methodology/approach – Panel data for the period 1984-2012 are used, and the generalized method of moment (GMM) technique is implemented. Findings – The results support the agglomeration effect, which indicates that countries which have already had FDI attract more FDI in the future. Economic risk affects FDI significantly and negatively, whereas trade openness has a significant and positive impact on FDI. Of the political risk factors considered, three of them, namely, law and order, ethnic tension and internal conflict, significantly affect FDI. The results on FPI show that the lag in FPI and the degree of openness play a significant role in attracting FPI into the MENA region. In addition, stock market capitalization, as well as the return on investment affects the FPI flow positively. The study also reveals a negative government structure impact on FPI, whereas, surprisingly, religious tension in the MENA region affects FPI positively. Originality/value – This research examines, simultaneously, the factors that determine not only FDI but also FPI flow. It uses a powerful econometric technique which avoids common estimation problems such as endogeneity, heteroskedasticity and autocorrelation. Policymakers in the MENA region recognized the need for outside capital as a major catalyst of development, economic growth and modernization. Therefore, it is essential to know the factors that would lead to a surge in capital flow to these countries.
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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 (October 9, 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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DE, SUPRIYO. "INTANGIBLE DETERMINANTS OF MARKET VALUE IN THE NEW ECONOMY: A DYNAMIC PANEL DATA ANALYSIS OF THE INDIAN SOFTWARE INDUSTRY." Singapore Economic Review 54, no. 03 (August 2009): 379–98. http://dx.doi.org/10.1142/s0217590809003392.
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Intangible assets like human capital and organization capital have driven the success of India's software industry. This article analyzes the impact of intangible assets on the market value of Indian software firms using a dynamic panel data model. Measures of tangible and intangible assets are constructed using firm-level panel data. The estimation technique uses system generalized method of moments (GMM) and minimum distance estimation (MDE). This methodology accounts for unobserved firm heterogeneity, endogenous explanatory variables and persistent variables. The results conclusively show that intangible assets have a significant impact on market values of Indian software firms.
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Chima, Menyelim M., Abiola Ayopo Babajide, Alex Adegboye, Segun Kehinde, and Oluwatobi Fasheyitan. "The Relevance of Financial Inclusion on Sustainable Economic Growth in Sub-Saharan African Nations." Sustainability 13, no. 10 (May 17, 2021): 5581. http://dx.doi.org/10.3390/su13105581.
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The primary concern of this examination is to systematically survey the importance of inclusive access to finance on the growth in terms of the economy in 48 sub-Saharan African (SSA) sovereign states with periodicity from 1995 to 2017. This study reports the results using both static and dynamic estimation techniques. For consistency, the baseline finding of the study estimation is based on the Generalized Method of Moments (GMM) system GMM. This article finds that there is a complimentary association between the present degree of inclusiveness of finance and economic advancement in SSA. The suggestion deduced in this examination is that programs with the plan of comprehensive financing ought to be custom fitted to the agricultural segment of the economy to encourage more economic opportunities for development in a sustainable manner.
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Mehmood, Bilal, Syed Husnain Haider Rizvi, and Syed Sajjad Haider Rizvi. "Governance and Information & Communication Technology in Islamic Countries: A Generalized Method of Moments Inference." Journal of Emerging Economies and Islamic Research 2, no. 2 (May 31, 2014): 82. http://dx.doi.org/10.24191/jeeir.v2i2.9626.
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Role of governance is undisputedly pivotal in managing the resources of a nation. Its importance for a better society and economy has been widely discussed in literature (North, 1990; Kaufmann et al., 2000; La Porta et al., 1999). Moreover, the 21st century has brought novel changes such as advent of information and communication technology (ICT). Information revolution has reformed societies and economies around the globe. Accordingly, this paper combines the two above-mentioned phenomena in this paper and puts forward a hypothesis that ICT has a positive influence on governance. In addition to ICT, Human Development Index (HDI) is also expected to have positive influence on governance. To conduct rigorous statistical analysis of the relevant variables, we use a widely used robust estimation technique, known as Generalized Method of Moments (GMM). This statistical technique has the ability to cope with endogeneity and heteroskedasticity in the presence of instrumental variables. In addition, Granger causality has been applied to test the causality between the two governance and ICT. Recommendation on the basis of findings are made after the statistical analysis is conducted.
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Fatima, Sumbal, Bateer Chen, Muhammad Ramzan, and Qamar Abbas. "The Nexus Between Trade Openness and GDP Growth: Analyzing the Role of Human Capital Accumulation." SAGE Open 10, no. 4 (October 2020): 215824402096737. http://dx.doi.org/10.1177/2158244020967377.
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The objective of this study is to explore the empirical impact of trade openness on gross domestic product (GDP) growth. Researchers have not given the externalities of trade openness the deserved scholarly attention. In this work, we propose to account for human capital accumulation (HCA) as an additional dimension of economic trade integration. To address the potential endogeneity issue, we use the system generalized method of moments (GMM) estimator developed for dynamic panel data models. The results outline an intriguing indirect relationship between trade openness and GDP growth. If HCA is taken into account as an intervening variable, trade may have a negative impact on GDP growth when countries exhibit a low level of HCA. Thus, the indirect relationship between trade openness and HCA was studied in depth, and to the best of our knowledge, this research is the first to examine this relationship in both developed and developing countries over a 34-year period (1980–2014). The established GMM-centric thresholds are robust to alternative estimation techniques and measurements of trade openness. Policy implications are discussed.
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Pradeep, V., Mita Bhattacharya, and Jong-Rong Chen. "Spillover Effects of Research and Development, Exports and Foreign Investment on Productivity." Journal of South Asian Development 12, no. 1 (April 2017): 18–41. http://dx.doi.org/10.1177/0973174117700467.
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The economic reforms in India since the early 1990s have aimed to improve the productivity and competitiveness of major industries. This article examines direct and indirect (spillover) effects from research and development (R&D), exporting activities and foreign direct investment (FDI) on the productivity of foreign and domestic manufacturing firms. Our empirical model employs data from over 1,000 Indian manufacturing firms between 1994 and 2008. With a balanced panel, robust estimation techniques including generalized method of moment (GMM) and system-GMM (sys-GMM) are employed for our empirical analysis. In most cases, our findings indicate that foreign presence has a significant positive spillover effect on the productivity of Indian manufacturing firms when compared to alternative spillovers from R&D and export initiatives. The spillover effects may vary due to R&D efforts and exporting activities. We also find that spillovers may vary between FDI and non-FDI firms and with the technological advances of industries.
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Tan, Yong, and John Anchor. "Stability and profitability in the Chinese banking industry: evidence from an auto-regressive-distributed linear specification." Investment Management and Financial Innovations 13, no. 4 (December 15, 2016): 120–29. http://dx.doi.org/10.21511/imfi.13(4).2016.10.
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The important role played by the Chinese commercial banks in the development of China’s economy has made the government and banking regulatory authority concerned about the performance of these banks.Indeedthe stability of the banking sector has attracted greater attention since the financial crisis of 2007-2009. The principal objective of this study is to investigate the inter-relationships between profitability and stability in the Chinese banking industry. Using a sample of Chinese commercial banks over the period 2003-2013, the study examines the inter-relationships under an auto-regressive-distributed linear model. Both Z-score and stability inefficiency were used as measures of stability, while Return on Assets (ROA) was used as the indicator of profitability. Different types of Generalized Method of Moments (GMM) estimators including difference GMM, one-step system GMM, two-step system GMM as well as two-step robust GMM were used. In order to the check the robustness of the results, alternative econometric techniques were used, such as ordinary least square (OLS) estimator, between effect estimator, as well as fixed effect estimator. The results show that higher insolvency risk/lower bank stability leads to higher profitability of Chinese commercial banks and also that higher profitability leads to higher bank fragility. Keywords: bank profitability, bank risk, China. JEL classification: G21, C23
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Michalíkovń, Eva, and Elisa Galeotti. "Determinants of FDI in Czech Manufacturing Industries between 2000-2007." South East European Journal of Economics and Business 5, no. 2 (November 1, 2010): 21–32. http://dx.doi.org/10.2478/v10033-010-0012-5.
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Determinants of FDI in Czech Manufacturing Industries between 2000-2007The Czech Republic (and its manufacturing industry) has been a successful recipient of foreign direct investment over recent years. Therefore, it is important to understand the decisions made by foreign investors where to place their investments and how to decide on their location between alternative industries. The aim of this paper is to find and estimate an econometric model describing the determinants of foreign direct investment (FDI) in the manufacturing industry of the Czech Republic between 2000-2007 and to make a review of recent literature on the topic. The econometric model includes several economic variables (for example labor, physical capital, R&D, profits per labor, Balassa index). Together with simple techniques of estimation (OLS, fixed effects) we used a generalized method of moments (GMM). In an effort to improve the result we used also a least trimmed squares estimator (LTS) from the class of robust estimators as a diagnostic tool for the heterogeneous pattern of data.
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Rahman, Mohammad Mafizur, Rezwanul Hasan Rana, and Suborna Barua. "The drivers of economic growth in South Asia: evidence from a dynamic system GMM approach." Journal of Economic Studies 46, no. 3 (August 2, 2019): 564–77. http://dx.doi.org/10.1108/jes-01-2018-0013.
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Purpose The purpose of this paper is to explore the drivers of economic growth in South Asia region for the period of 1975–2016 using the World Bank data. Design/methodology/approach Panel corrected standard error (static estimation) approach and one-step system generalised method of moments (dynamic estimation) approach are used. Findings Both the static and dynamic estimations indicate that energy use, gross capital formation and remittances are the main drivers of economic growth in South Asian countries. The effects of all these variables are positive and significant. The extent of the effect of energy use is much higher than that of other two variables on the economic growth. A 1 per cent increase in the growth of energy consumption can expedite the gross domestic product growth by approximately 3 per cent in South Asia. However, the key variables, such as trade, government expenditure and foreign direct investment demonstrate no significant effect. Originality/value The current research is original in the sense that it investigated the issue with a new data set using improved econometric techniques. Moreover, in South Asia as a whole, this kind of study is totally absent, particularly with panel data of a large number of years. Furthermore, this study has taken into account the problem of heterogeneity and the biases created by cross-section dependence, which were mostly absent in previous studies. Therefore, the findings of this research are new contributions to the existing literature.
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Bokpin, Godfred A., Lord Mensah, and Michael E. Asamoah. "Legal source, institutional quality and FDI flows in Africa." International Journal of Law and Management 59, no. 5 (September 11, 2017): 687–98. http://dx.doi.org/10.1108/ijlma-03-2016-0028.
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Purpose This paper aims to find out how the legal system interacts with other institutions in attracting Foreign Direct Investment (FDI) into Africa. Design/methodology/approach The authors use annual panel data of 49 African countries over the period 1980 to 2011, and use the system generalized method of moments (GMM) estimation technique and pooled panel data regression. Findings The authors find that the source of a country’s legal system deters FDI inflow as institutions alone cannot bring in the needed quantum of FDI. In terms of trading blocs, it was found that there is negative significant relationship between institutional quality and FDI for South African Development Community (SADC) as well as Economic Community of West Africa States (ECOWAS) countries. Practical implications For policy implications, the results suggest that reliance on institutions alone cannot project the continent to attract the needed FDI. Originality/value Empiricists have devoted considerable effort to estimating the relationship between institutions and FDI on the African continent, but this paper seeks to ascertain the effect of legal systems and institutional quality within African specific trade and regional blocks.
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Al-Daoud, Khaleel Ibrahim, Siti Zabedah Saidin, and Shamharir Abidin. "Board meeting and firm performance: Evidence from the Amman stock exchange." Corporate Board role duties and composition 12, no. 2 (2016): 6–11. http://dx.doi.org/10.22495/cbv12i2art1.
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This study examines the impact of board meeting frequency on the firm performance of the firms listed on the Amman Stock Exchange from industry and service sectors for the 2009-2013 period. The study controls for endogeneity and simultaneously problems using the dynamic panel technique of Generalized Method of Moments (GMM). The findings of the study suggest that a positive association between the frequency of corporate board meetings and firm performance. This suggests that through meetings, board members determine operational issues through discussing and engaging with each other frequency meetings enhancing the decision making process, and consequently the performance of the firms. The findings also show that lagged dependent variable in the estimation model is important in explaining the relationship, which further indicates the appropriateness of the estimation models in our study. This study provides insightful evidence to policy makers on the effectiveness of the of the 2009 Code of Corporate Governance
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Tolulope, Apanisile Olumuyiwa, and Okunlola Charles Olalekan. "Growth Effect of Export Promotion on Non-oil Output in Sub-Saharan Africa (1970–2014)." Emerging Economy Studies 3, no. 2 (November 2017): 139–55. http://dx.doi.org/10.1177/2394901517730728.
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The study examines the growth effect of export promotion strategies on non-oil output in the sub-Saharan African (SSA) countries between 1970 and 2014. The study employed panel data and three estimation techniques (pooled ordinary least square [OLS], fixed effect, and dynamic generalized moment method [GMM]) to analyze the data. In addition, export promotion policies (EPPs) such as commercial bank credit to private sector, foreign direct investment (FDI) to non-oil sector, real effective exchange rate, and government expenditure were used. Results show that all export promotion policy instruments used have a significant effect on non-oil output in SSA. Also, while bank credit to private sector have positive and significant effect, FDI, government expenditure, and exchange rate will crowd out growth effect of export promotion. The study concluded that favorable EPPs will stimulate non-oil output growth.
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Kwenda, Farai, and Merle Holden. "A Dynamic Perspective On Determinants Of Short-Term Debt Financing: Evidence From South African Listed Firms." Journal of Applied Business Research (JABR) 30, no. 1 (December 30, 2013): 183. http://dx.doi.org/10.19030/jabr.v30i1.8293.
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<p>This study analyses the determinants of short-term debt financing using the generalised method of moment (GMM) of estimation to attest whether it follows a partial adjustment process. The study analyses data collected for 92 firms listed on the JSE Securities Exchange (JSE) for the period 2001 to 2010. The evidence obtained from the study suggests that firms have a target level of short-term debt and follow an adjustment process towards the target level. Spontaneous and internal resources, investment opportunities and the state of the economy play an important role in the use of short-term debt as a short-term financing instrument among the listed companies. The study recommends that managers pay particular attention to the key factors that drive the use of short-term debt because of its importance in financing working capital.</p>
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Bany-Ariffin, A. N., Bolaji Tunde Matemilola, Liza Wahid, and Siti Abdullah. "International diversification and firm’s value: evidence from developing nations." Review of International Business and Strategy 26, no. 2 (June 6, 2016): 166–83. http://dx.doi.org/10.1108/ribs-01-2014-0016.
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Purpose This paper aims to evaluate the impact of international diversification, through the investment abroad activities of the Malaysian multinational corporations (MNCs), on their financial performance. Design/methodology/approach The paper applies the panel generalized method of moments (GMM) estimation technique that gives better results. Findings The empirical findings show that the move to invest abroad has brought a positive impact on Malaysian MNCs’ financial performance. However, in terms of a firm’s risk, the results contradict the general internationalization-risk hypothesis. Research limitations/implications The study focuses on the top 100 multinational firms; future researchers may extend the time period and use the entire sample of all the multinational firms. Practical implications Foreign investments offer rewarding returns due to cheaper labour and raw materials, competitive edge in terms of technological advancement and larger market opportunities. Originality/value The paper contributes to the literature using the panel GMM’s estimation that effectively control for reverse causality and serial correlation problem. The paper also contributes to the international diversification and performance relationship, in a fast-growing Malaysia.
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Luu, Hiep Ngoc, Ngoc Minh Nguyen, Hai Hong Ho, and Vu Hoang Nam. "The effect of corruption on FDI and its modes of entry." Journal of Financial Economic Policy 11, no. 2 (May 7, 2019): 232–50. http://dx.doi.org/10.1108/jfep-05-2018-0075.
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Purpose The purpose of this paper is to empirically investigate the impact of corruption on foreign direct investment (FDI) and its two major modes of entry: greenfield investment (greenfield) and cross-border mergers and acquisitions (M&As). Design/methodology/approach Data are collected from 131 countries. Modern econometric techniques, including the generalized method of moments (GMM) estimator, two-stage least square estimator and two-step system GMM estimator, are used to evaluate the impact of corruption on FDI activities. Findings The empirical results illustrate that corruption is a deterioration factor that significantly hinders FDI inflows. However, this finding turns out to be contradictory when the two major components of FDI – greenfield investment and cross-border M&As – are separately examined. Specifically, while corruption consistently discourages cross-border M&As over time, it appears to exert positive effect on greenfield investments. Originality/value This is among the first to empirically examine the impact of corruption on FDI and its modes of entry in a number of countries spanning different time windows. In this sense, this paper also captures the changing nature of societies and economic conditions overtime and, therefore, enable academic researchers, policy-makers and business practitioners to draw broad inferences from the empirical results.
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Hassan, Adewale, and Daniel Meyer. "Exploring the Channels of Transmission between External Debt and Economic Growth: Evidence from Sub-Saharan African Countries." Economies 9, no. 2 (April 6, 2021): 50. http://dx.doi.org/10.3390/economies9020050.
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This study aimed to determine the channels through which external debt transmits its impact on economic growth in sub-Saharan African (SSA) countries. To this end, panel data comprising 30 SSA countries were investigated for the period 1985–2019, using the system generalized method of moments (GMM) estimation technique. The study identified public investment, private investment and total factor productivity as channels transmitting the non-linear effect from external debt to economic growth. Furthermore, the interest rate was also confirmed as a channel but with a direct effect. Contrariwise, the estimates indicated that savings are not a channel of transmission from external debt to economic growth in SSA. These findings call for urgent action from SSA countries to reduce their external debt stocks and implement alternative macroeconomic non-debt strategies to improve the identified channels to counteract the negative effect of high external debt on them.
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Usman, Ojonugwa, and Umoru Adejo Yakubu. "An investigation of the post-privatization firms’ financial performance in Nigeria: the role of corporate governance practices." Corporate Governance: The International Journal of Business in Society 19, no. 3 (June 3, 2019): 404–18. http://dx.doi.org/10.1108/cg-05-2018-0190.
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Purpose The purpose of this study is to investigate the role of corporate governance practices on the post-privatization financial performance of the firms listed on the Nigerian Stock Exchange (NSE) over the period 2005-2014. Design/methodology/approach The study uses a two-step dynamic system Generalized Method of Moments (GMM) estimation technique for 27 privatized firms by considering a wide range of controlled variables such as managerial shareholdings, board composition, debt financing and stock market development. Findings The empirical result suggests that the improvement in the firms’ financial performance is attributed to good corporate governance practices through effective board composition, debt financing (leverage) and stock market development. The result further shows no substantial evidence to support that managerial shareholding improves firms’ financial performance. Research limitations/implications Therefore, based on the empirical findings of this study, the authors recommend that the firms need to maintain the optimum board composition and the ratio of debt to share capital as well as developing the stock market to function effectively. Originality/value This study contributes to the existing literature in several ways: (1) the first time that the role of corporate governance is considered in explaining the post-privatization financial performance of firms listed on the Nigerian Stock Exchange; (2) the paper applies a two-step dynamic system GMM estimation technique, proposed by Arellano and Bover (1995) and Blundell and Bond (1998) to control for the serial correlation and heterogeneity, which remain the major weaknesses of the panel data modeling in the literature.
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Nketiah-Amponsah, Edward, and Bernard Sarpong. "Effect of Infrastructure and Foreign Direct Investment on Economic Growth in Sub-Saharan Africa." Global Journal of Emerging Market Economies 11, no. 3 (September 2019): 183–201. http://dx.doi.org/10.1177/0974910119887242.
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This article investigates the effect of infrastructure and foreign direct investment (FDI) on economic growth in Sub-Saharan Africa (SSA) using panel data on 46 countries covering the period 2003–2017. The data were analyzed using fixed effects, random effects, and system generalized method of moments (GMM) estimation techniques. Based on the system GMM estimates, the results indicate that a 1 percent improvement in electricity and transport infrastructure induces growth by 0.09 percent and 0.06 percent, respectively. Additionally, FDI proved to be growth enhancing only when interacted with infrastructure. The interactive effect of FDI and infrastructure improves economic growth by 0.016 percent. The results suggest that public provision of economic infrastructure reduces the cost of production for multinational enterprises, thus providing an incentive to increase investment in the domestic economy to sustain economic growth. The results also suggest that the impact of FDI on economic growth is maximized when some level of economic infrastructure is available. Our findings thus provide ample justification on the need for a significant government investment in infrastructure to provide a less costly business environment for both local and multinational enterprises to improve economic growth.
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Nadeem, Muhammad, Tracy-Anne De Silva, Christopher Gan, and Rashid Zaman. "Boardroom gender diversity and intellectual capital efficiency: evidence from China." Pacific Accounting Review 29, no. 4 (November 6, 2017): 590–615. http://dx.doi.org/10.1108/par-08-2016-0080.
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Purpose This paper aims to investigate the relationship between boardroom gender diversity and intellectual capital (IC) efficiency in China – while the previous literature focuses only on traditional accounting-based performance measures such as return on assets or Tobin’s Q. Design/methodology/approach A well-developed Arrelano–Bond generalised method of moment (GMM) is applied to account for endogeneity – mainly because of simultaneity and unobserved heterogeneity. Moreover, this study uses an adjusted-value added intellectual coefficient (VAIC) model to measure the IC efficiency of 906 Chinese listed firms for 2010-2014. Findings The empirical analysis shows a significant relationship between gender diversity and IC efficiency, in static ordinary least square estimation, but this disappears when endogeneity is accounted for using dynamic GMM. This insignificant relationship remains consistent, even when two alternative proxies of gender diversity, i.e. the Blau index and the women dummy, are used. Practical implications This study provides some useful insights into the traditional Chinese corporate structure where females cannot use their powers to bring corporate changes in firms. The findings show that gender-related stereotypical attitudes continue to exist in China. The regulators, therefore, should look into strengthening gender related regulations – which are currently non-existent in China. Originality/value This is the first study of its kind to investigate the relationship between gender diversity and IC efficiency in China using the A-VAIC model and GMM to mitigate endogeneity.
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Nwibari, Deekor Leelee, and Gbanador Clever A. "Output Growth Volatility and Remittances: The Case of ECOWAS." International Journal of Social Science Research 6, no. 2 (August 26, 2018): 23. http://dx.doi.org/10.5296/ijssr.v6i2.12647.
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The study on output growth volatility and remittances: the case of ECOWAS is to determine the impact of remittances on output growth volatility. To achieve this, the study adopts the theory of altruism which posits that the migrant derives a positive utility from the well-being of the family left behind. A panel annual data set covering 15 remittances recipient ECOWAS member nations for the period ranging from 1995 to 2015 were utilized. The study utilizes a panel system Generalized Method of Moments (GMM) technique and both the static and dynamic panel estimation approaches to examine the impact of remittances on growth volatility. Results show that remittances appear to be inducing output volatility in ECOWAS member countries. As a result, the study suggests among others, the encouragement of policies that will foster increasing influx of remittances to the region by the concern authorities in order to stabilize volatility of any form in the region.
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Folarin, Oludele, and Oluwatosin Adeniyi. "Does Tourism Reduce Poverty in Sub-Saharan African Countries?" Journal of Travel Research 59, no. 1 (January 17, 2019): 140–55. http://dx.doi.org/10.1177/0047287518821736.
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To achieve the Sustainable Development Goals (SDGs), precisely the one of eradicating extreme poverty at the end of 2030, it is important to understand factors that can reduce poverty. This article examines the effects of tourism development on poverty in Sub-Saharan African countries. Because of the possibility of an endogeneity problem arising from a reverse causation that might exist between poverty and the explanatory variables, the system Generalized Method of Moments (system GMM) estimation technique was deployed. The findings showed that tourism development contributes to poverty reduction in Sub-Saharan African (SSA) countries. In other words, the results obtained provided ample support for the workability of a pro-poor tourism policy agenda. As a result, policies that are targeted at increasing the attractiveness and awareness of the existing SSA tourism sites in order to increase international tourism receipts and arrivals should be promoted since such interventions have considerable poverty reduction potential.
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Nyoka, Charles. "Bank Capital and Profitability: An Empirical Study of South African Commercial Banks." Comparative Economic Research. Central and Eastern Europe 22, no. 3 (August 19, 2019): 99–116. http://dx.doi.org/10.2478/cer-2019-0025.
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Bank capital is a principal aspect of regulation and will determine how long a bank remains in business from a regulatory point of view. Prior research on the relationship between capital and profitability has largely focused on developed economies, especially the USA, and Europe and the results have been inconclusive. There is no evidence of such research done to date that focuses on an emerging economy such as South Africa. Using South Africa as a unit of analysis and using the Generalised Methods of Moments (GMM), and Panel Two Stage Least Squares (2SLS) or Pooled IV method as the estimation techniques, this study tested the hypothesis that there is a positive and statistically significant relationship between bank capital and profitability. The results provided evidence of a positive relationship between capital ratio (CAR), return on equity (ROE) and return on assets (ROA). From a bank specific strategic decision‑making perspective, this would assist financial institutions and investors in tailoring investment decisions in response to policy decisions that relate to bank capital. From the public policy perspective, this would assist both governments and regulators in formulating better‑ informed policy decisions regarding the importance of bank capital.
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Waheed, Abdul, and Qaisar Ali Malik. "Institutional Ownership Board Characteristics and Firm Performance." International Journal of Asian Business and Information Management 12, no. 2 (April 2021): 1–15. http://dx.doi.org/10.4018/ijabim.20210401.oa1.
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This research study attempts to investigate the moderating role of financial institutions with corporate governance and firm performance variables in the light of a purposely developed contingent theoretical framework. The current study analyzed an unbalanced panel of 287 non-financial sector firms listed on Pakistan Stock Exchange (PSX) from 2005 to 2015 by using the technique Arellano-Bond dynamic panel-data estimation under assumptions of generalized methods of moments (GMM). The contingency framework proposed in this study confirmed the moderating role of financial institutions in corporate governance and performance variables. Empirical evidence revealed that higher level of institutional ownership in firm's ownership structure although discourages the large size board but encourages higher ratio of independent directors in the governing body. To the best of the authors' knowledge, the current study provides a deeper understanding regarding the role of financial institutions in corporate governance and performance mechanism particularly in the context of Pakistani emerging economy.
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Sarwar, Bushra, Ming Xiao, Muhammad Husnain, and Rehana Naheed. "Board financial expertise and dividend-paying behavior of firms." Management Decision 56, no. 9 (September 10, 2018): 1839–68. http://dx.doi.org/10.1108/md-11-2017-1111.
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Purpose Numerous researchers have developed theories and studies to uncover the issues pertinent to dividend policy dynamics, but it is still one of the unresolved problems of finance. The purpose of this paper is to focus on a new dimension, i.e., financial expertise on the corporate board for explaining the dividend policy dynamics in the emerging equity markets of China and Pakistan. Design/methodology/approach The study employs static (fixed effect (FE) and random effect (RE)) and dynamic models – two-step generalized method of moments (GMM) estimation techniques by Arellano and Bond (1991) and Arellano and Bover (1995) – during the timespan from 2009 to 2014. Further, this study re-estimated FE, RE and GMM two-step estimation techniques by excluding the non-dividend-paying companies, and also employed instrumental variable regressing by using two instrumental variables – industry average financial expertise of the board and board size – as proxies for board financial expertise to control the possible endogeneity. Findings The study reveals that Chinese firms having more financial expertise on the board do not take dividends as a control mechanism (substitution hypothesis), while Pakistani firms support the compliment hypothesis and use dividends as a control mechanism to mitigate agency conflict to protect shareholders’ interests and keep additional funds from the manager’s opportunism. Further robustness models also confirm the presence of a significant association between dividend policy and board financial expertise in both equity markets. Originality/value This study introduces the financial expertise on a board as a determinant of dividend policy. To the best of the authors’ knowledge, no previous studies have focused on board-level financial expertise as a contributing factor toward dividend policy.
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Joshua, Udi, Mathew Ekundayo Rotimi, and Samuel Asumadu Sarkodie. "Global FDI Inflow and Its Implication across Economic Income Groups." Journal of Risk and Financial Management 13, no. 11 (November 22, 2020): 291. http://dx.doi.org/10.3390/jrfm13110291.
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Foreign direct investment (FDI) as a driver of growth is important in today’s globalized economy. It is extremely difficult for economies to grow sustainably without economic interactions outside their borders. However, there has been a debate on the impact of FDI inflow on economic expansion. Hence, this study investigated the influence of FDI on economic growth for a selection of 200 economies around the world for the period 1990–2018. We subdivided the sample into World Bank income group clusters to aid comparison across income blocs. The study employed panel estimation techniques including pooled ordinary least squares (POLS), dynamic panel estimation with fixed-effects and random-effects and generalized method of moments (GMM). The study found that FDI, debt stock and official development assistance are promoters of growth in the selected countries—although debt stock weakly impacts economic growth. In contrast, trade openness and exchange rates had a mixed (negative and positive) influence on economic growth. The study suggests that the creation of a conducive business environment and economic policies will attract FDI inflows. Additionally, borrowing from external sources could be minimized despite its perceived positive influence on growth to achieve financial independence.
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Ahmad, Bashir, Maria Ciupac-Ulici, and Daniela-Georgeta Beju. "Economic and Non-Economic Variables Affecting Fraud in European Countries." Risks 9, no. 6 (June 17, 2021): 119. http://dx.doi.org/10.3390/risks9060119.
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Fraud is one of the most harmful phenomena, because it leads to collapse of organizations, causes economic downfall of countries, and destroys faith in a country’s capital markets. The impact of fraud is complex and has varying degrees depending on political and financial institutional structures of a country. In this paper, we investigate the combined effect of economic and non-economic variables on fraud using a sample of 41 developed, in transition, and developing European countries. The data cover the period July 2014–December 2020. Panel data techniques of pooled estimation and the dynamic panel data/generalized method of moments (DPD/GMM) is used, keeping in view the endogeneity perspective. Nevertheless, two-way impacts of fixed effect model estimation—cross-sectional and time-based (panel) effects (alternatively)—are used for analyzing the relationship among the given variables, based on Hausman specification test results. Empirical results of panel data extended REM and FEM approaches with country-specific cross-sectional effects showing that political stability, economic freedom, poverty, and GDP significantly affect fraud proliferation. Political stability is appraised to be the most scoring determinant of fraud incidence in a country.
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Peter Angyie, Dr Etoh-Anzah, and Mr Badjo Ngongue Martial Annicet. "The Impact of Investment Climate on Industrial growth in the Central African sub-region (CEMAC)." International Journal of Scientific Research and Management 8, no. 01 (January 20, 2020): 1500–1516. http://dx.doi.org/10.18535/ijsrm/v8i01.em03.
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The study on the Impact of Investment Climate on Industrial growth in the Central African sub-region (CEMAC) is centered on investigating into how macroeconomic stability, rule of law, political stability, legal and tax framework, infrastructure, and access to financial services will impact on industrial growth in the CEMAC region. It used data from World Development Indicators and World Governance Indicators database of the World Bank for 2002 to 2017 for all 6 countries of the sub region. Using the system-generalized method of moments (System-GMM) model and the fixed effects generalized least squares estimation techniques, our results on the average revealed that investment climate positively though not significantly, impact on the industrial growth in the sub region during the study period. However, up to about 45.5 per cent of the variables used for investment climate showed a negative impact on the industrial growth of the sub region. We therefore recommend that bureaucracy, government effectiveness, the type of government expenditure under taken, trade openness and value accountability be revisited and appropriate measures taken to permit for important improvements in industrial growth in the sub region.
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Dan Dang, Van. "Should Vietnamese Banks Need More Equity? Evidence on Risk-Return Trade-Off in Dynamic Models of Banking." Journal of Risk and Financial Management 12, no. 2 (May 13, 2019): 84. http://dx.doi.org/10.3390/jrfm12020084.
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This study employs generalized method of moments (GMM) for dynamic panel data models to deal with the nature of banking behaviour, aiming at investigating the impact of bank equity on the risk and return of Vietnamese commercial banks during the period of 2006–2017. The study finds that increasing bank equity is not always the best strategy to be accompanied by absolute benefits, increasing returns and reducing risks for banks but is a trade-off instead. More precisely, banks with larger capital buffers tend to take less risk but are less profitable. In addition, the study also finds a non-linear relationship revealing that bank risk mitigates the effect of bank equity on profitability. Most estimations show strong robustness checked by some alternative techniques. Based on the findings, the study provides some important policy implications to improve the performance of the banking system in Vietnam as well as in other emerging countries.
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Faiz ur Rahim, Posha Gul, and Madiha Asma. "Impact of Public Education Expenditures on Economic Wellbeing in Developing Economies." International Journal of Innovation in Teaching and Learning (IJITL) 6, no. 1 (July 1, 2020): 122–39. http://dx.doi.org/10.35993/ijitl.v6i1.874.
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Education can affect economic growth and wellbeing through different channels like by increasing the efficiency of the workforce, reducing inequality, and increasing the knowledge and the innovative capacity of an economy. The key objective of the present research is to explore the impact of public education expenditures on economic wellbeing in developing economies. The present study explored the impact of public education expenditures on economic wellbeing by using panel dataset of 21 developing economies over the period of 1980-2014. Household Final Consumption Expenditure Per Capita was used as a proxy to measure economic wellbeing. The panel estimation technique of Generalized Method of Moments (GMM) was used for the analysis. Research findings revealed that there was a positive and significant relationship between education expenditure and economic wellbeing. Economic wellbeing of the society was directly linked with more priority to educational expenditures in public budget. Hence, developing economies should enhance their public spending on education.
Keywords: Economics of Education, Public Education Expenditure, Economic Wellbeing, Household Final Consumption Expenditure per Capita, Developing Economies
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Hussain, Arif, Muhammad Khan, Alam Rehman, Shehnaz Sahib Zada, Shumaila Malik, Asiya Khattak, and Hassan Khan. "Determinants of Islamic social reporting in Islamic banks of Pakistan." International Journal of Law and Management 63, no. 1 (August 3, 2020): 1–15. http://dx.doi.org/10.1108/ijlma-02-2020-0060.
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Purpose This study aims to spotlight and explore various determinants of Islamic social reporting (ISR) in Islamic banks of Pakistan. Design/methodology/approach The authors have used firm size, firm profitability, firm age, board size and board independence as determinants of ISR. The authors collected data from Islamic banks listed on Pakistan Stock Exchange for the period 2012–2019. Multiple estimation techniques, i.e. fixed effect model, random effect model and one-step difference generalized method of moment (GMM), have been applied. Findings Random effect model was found to be more robust as compared to fixed effect model and one-step difference GMM. The results reported by the random effect model, preferred among the three, show that firm size, firm profitability, firm age and board size are important determinants of ISR in Islamic banks of Pakistan, while board independence does not determine social reporting for Islamic banks in Pakistan. Although social reporting in annual reports of Islamic banks in Pakistan is increasing, further improvement and compliance is required to ensure accountability and transparency in financial reporting as recommended by Islamic teachings. The study has certain managerial implications, especially for top management of Islamic banks. Originality/value To the best of the authors’ knowledge, this study is the first to discuss determinants of ISR in Islamic banks of Pakistan. The developed framework herein provides a precise guideline for Islamic banking to enhance their performance, which has never been discussed before.
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Jin, Kyuho, Joowon Lee, and Sung Min Hong. "The Dark Side of Managing for the Long Run: Examining When Family Firms Create Value." Sustainability 13, no. 7 (March 29, 2021): 3776. http://dx.doi.org/10.3390/su13073776.
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Family firms take a substantial fraction of economic activities and significantly influence a nation’s economic sustainability. Despite the considerable amount of research efforts to determine their performance implications, there is still a lack of consensus. This study aims to address this dissensus in two ways. Theory-wise, we introduce two interdependent contingencies that interactively determine the relative strength of positive and negative effects of family involvement: inside chief executive officers (CEOs) and business fluctuations. Method-wise, we employ an advanced econometric technique, the system generalized method of moments (GMM) estimator, to control for endogeneity. Using panel data of Korean family firms listed on the Korea Composite Stock Price Index (KOSPI) stock market during the periods between 2013 and 2016, we find (1) that family firms underperform non-family firms, (2) that the negative effect of family involvement decreases under the management of inside CEOs, and (3) that this positive moderation effect of inside CEOs decreases in the face of business fluctuations. This study furthers our understanding of how the family influences firm performance and, eventually, economic sustainability.
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Adak, Debabrata. "A new approach of estimating the galactic thermal dust and synchrotron polarized emission template in the microwave bands." Monthly Notices of the Royal Astronomical Society 507, no. 3 (August 20, 2021): 4618–37. http://dx.doi.org/10.1093/mnras/stab2392.
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ABSTRACT The Internal Linear Combination (ILC) method has been extensively used to extract the cosmic microwave background (CMB) anisotropy map from foreground contaminated multifrequency maps. However, the performance of simple ILC is limited and can be significantly improved by heavily constraint equations, dubbed constrained ILC (cILC). The standard ILC and cILC work on spin-0 fields. Recently, a generalised version of ILC has been developed, named polarization ILC (PILC), in which Q ± iU at multiple frequencies are combined using complex coefficients to estimate Stokes Q and U maps. A statistical moment expansion method has recently been developed for high-precision modelling of the galactic foregrounds. This paper develops a semiblind component separation method combining the moment approach of foreground modelling with a generalised version of the PILC method for heavily constraint equations. The algorithm is developed in pixel space over a spin-2 field. We demonstrate the performance of the method on three sets of absolutely calibrated simulated maps at WMAP and Planck frequencies with varying foreground models. We apply this component separation technique in simultaneous estimation of Stokes Q and U maps of the thermal dust at 353 GHz and synchrotron at 30 GHz. We also recover both dust and synchrotron maps at 100 and 143 GHz, where separating two components is challenging.
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Rasoulinezhad, Ehsan, Farhad Taghizadeh-Hesary, and Farzad Taghizadeh-Hesary. "How Is Mortality Affected by Fossil Fuel Consumption, CO2 Emissions and Economic Factors in CIS Region?" Energies 13, no. 9 (May 4, 2020): 2255. http://dx.doi.org/10.3390/en13092255.
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It is widely discussed that GDP growth has a vague impact on environmental pollution due to carbon dioxide emissions from fossil fuels consumed in production, transportation, and power generation. The main purpose of this study is to investigate the relationships between economic growth, fossil fuel consumption, mortality (from cardiovascular disease (CVD), diabetes mellitus (DM), cancer, and chronic respiratory disease (CRD), and environmental pollution since environmental pollution can be a reason for societal mortality rate increases. This study uses the generalized method of moments (GMM) estimation technique for the Commonwealth of Independent States (CIS) members for the period from 1993–2018. The major results revealed that the highest variability of mortality could be explained by CO2 variability. Regarding fossil fuel consumption, the estimation proved that this variable positively affects mortality from CVD, DM, cancer, and CRD. Additionally, any improvements in the human development index (HDI) have a negative effect on mortality increases from CVD, DM, cancer, and CRD in the CIS region. It is recommended that the CIS members implement different policies to improve energy transitions, indicating movement from fossil fuel energy sources to renewable sources. Moreover, we recommend the CIS members enhance various policies for easy access to electricity from green sources and increase the renewable supply through improved technologies, sustainable economic growth, and increase the use of green sources in daily social life.
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Idrees, Alvina Sabah, and Saima Sarwar. "Entrepreneurial Behavior, Institutional Trust and National Innovation: A Macro-Level Empirical Study." Journl of Applied Economics and Business Studies 4, no. 1 (March 30, 2020): 97–122. http://dx.doi.org/10.34260/jaebs.415.
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Schumpeterian fundamentalism supports the argument that innovation is a dynamic process and novelties are initiated through economic agents namely the entrepreneurs; vis-à-vis a strong institutional environment is required to facilitate the innovation process. Therefore, the present study undertakes the macro-level empirical analysis on determining the impact of entrepreneurial behavior, property rights and state effectiveness on country’s innovation. The data is of panel nature consisting of 55 countries and a time period from 2010 to 2016. The empirical analysis is done using system GMM (Generalized Method of Moments) estimation technique. The study shows that the fear of failure rate and total early stage entrepreneurs reduces innovation in a country whereas there is a significant positive relationship between established business entrepreneurs and innovation. However, perceived opportunities have an insignificant impact. This means that it is not inevitable that opportunities necessary trigger innovation. In addition, the study shows that property rights play an integral role in developing institutional trust which boosts entrepreneurialism to undertake innovative venture. On the other hand, state effectiveness is negatively related to innovation i.e. institutional trust is brought down in fragile countries which retard country’s innovation.
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Khan, Murad, and Abdul Jalil. "Determinants of Interest Margin in Pakistan: A Panel Data Analysis." Economies 8, no. 2 (March 30, 2020): 25. http://dx.doi.org/10.3390/economies8020025.
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This paper explores the determinants of the net interest margin (NIM) using unbalanced panel data from 2003 to 2017. This paper’s objective is achieved by using a two-step system generalised method of moment (GMM) for estimation. Three different models are to account for two alternative measures of market competition. The empirical results of these models indicate that operating cost, profit tax, interest rate risk, Lerner index, national savings, money supply and the T-bill rate have significant positive associations with the NIM. Meanwhile, operational size, credit risk and the inflation rate negatively affect NIM. Furthermore, operating cost, taxation and the money supply are the main factors that influence the NIM. The present analysis provides a comprehensive view of the Lerner index, which is a better measure for capturing the degree of market power than the concentration measure (HHI). Managerial efficiency and risk aversion are bank-level factors that do not significantly determine NIM. Operating costs could be decreased by adopting new banking technologies. Therefore, higher competition, lower operating costs and restricted uncertain conditions in a macro environment, particularly in the money market, could reduce the NIM.
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Eshetu, Fassil, and Degye Goshu. "Determinants of Ethiopian Coffee Exports to Its Major Trade Partners: A Dynamic Gravity Model Approach." Foreign Trade Review 56, no. 2 (January 11, 2021): 185–96. http://dx.doi.org/10.1177/0015732520976301.
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The aim of this article is to examine export determinants of Ethiopian coffee to 31 trade partner countries using a dynamic gravity model and system generalised moment method of estimation (GMM) for the period 1998–2016. Descriptive results showed that Ethiopia was exporting only 39% of its total coffee production, and 53.5% and 34.13% of Ethiopian coffee exports were directed to European and Asian countries, respectively, over the period 1998–2016. Regression results revealed that trade openness, population size of Ethiopia, foreign direct investment and institutional quality index of Ethiopia are positively and significantly affecting volume of Ethiopian coffee export. But population of partner countries, weighted distance, lagged export volume and real exchange rate are negatively and significantly influencing export volume of Ethiopian coffee. Hence, Ethiopia needs to diversify its export destinations and export items a way from primary agricultural exports to secondary industrial exports in order to secure dependable source of foreign currency. Also, controlling corruption, increasing government effectiveness, ensuring political stability promotion of foreign direct investment and encouraging trade liberalisation would help to boost the volume of Ethiopian coffee export. JEL Codes: F12, F13, F14
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Ozekhome, Hassan O. "DOES DEMOCRATIC INSTITUTIONS AND FOREIGN DIRECT INVESTMENT AFFECT ECONOMIC GROWTH? EVIDENCE FROM NIGERIA." Oradea Journal of Business and Economics 2, no. 2 (September 2017): 27–36. http://dx.doi.org/10.47535/1991ojbe024.
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A reciprocally re-enforcing relationship exists between institutions, foreign direct investment and economic growth. Sound institutional framework which supports foreign direct investment is significant for driving rapid Economic growth. An important factor that has undermined rapid and sustained economic growth is the weak institutional structure, decrepit state capacity and low level of foreign direct investment in Nigeria. Democratic structures reflected in the rule of law, effectiveness and predictability of the judiciary and enforceability of contracts proceedings is imperative for accelerating economic growth. Employing the Generalized Method of Moments (GMM) estimation techniques on annual time series data covering the period from 1981 to 2015, the relationship between these variables was empirically investigated. The empirical findings reveal that democratic institutions and foreign direct investment are significant variables influencing economic growth in Nigeria. In particular, the results, using Nigerian data, show that weak institutions have a destabilizing impact on growth. The impact of FDI on the other hand is found to be positive and significant. Therefore, sound institutional framework, as well as appropriate and consistent macroeconomic policies that encourage foreign direct investment to propel rapid economic growth in Nigeria needs to be put in place.
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Saif-Alyousfi, Abdulazeez Y. H. "Political instability and services of GCC banks: how important is the Yemen War?" Journal of Economic and Administrative Sciences 36, no. 4 (June 18, 2020): 339–65. http://dx.doi.org/10.1108/jeas-02-2020-0015.
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PurposeThe purpose of this paper is to examine the impact of the Yemen War on banking services (deposits and loans) at the aggregate and at the level of conventional and Islamic banks in GCC countries. The author also tests hypotheses of direct and indirect impacts of the Yemen War on bank services.Design/methodology/approachThe sample comprises a total of 70 banks (45 conventional and 25 Islamic banks) over the period 2000–2018. The static and dynamic panel generalized methods of moments (GMM) estimation techniques are applied.FindingsEmpirical results indicate that the Yemen War has a significant negative direct impact on deposits and loans of GCC banks. The results lend support for the direct channel hypothesis, but not for the indirect channel hypothesis. The negative direct impact is most prominent on banks in GCC countries that are directly involved in the Yemen War, although the war has an asymmetric effect on conventional and Islamic banks, the former being more vulnerable. The overall conclusion is that the Yemen War exerts an asymmetric impact on the GCC region, across both banks and countries.Practical implicationsThese results are a warning to policymakers to be cautious when formulating a strategy for macroeconomic stability.Originality/valueIt is widely recognized that the Yemen War has a significant impact on the economies of the GCC countries. However, the possible impact of the war on GCC bank services has not so far been subjected to robust empirical analysis. This paper therefore seeks to fill this gap by providing an in-depth quantitative analysis of this impact. It distinguishes between direct and indirect channels through which the Yemen War may affect bank services. It is also the first to examine the asymmetric impact of the Yemen War on the GCC region, across both banks (Islamic and conventional banks) and countries (whether or not involved in the war). The study uses both static panel and dynamic panel GMM estimation techniques to analyze the data.
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Singh, Awadhesh Pratap, and Chandan Sharma. "Does India do IT? The nexus of IT, skills, organizational factors and productivity." Journal of Economic Studies 47, no. 3 (March 5, 2020): 597–626. http://dx.doi.org/10.1108/jes-03-2019-0100.
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PurposeThe goal of this study is to investigate the nexus among TFP (total factor productivity), IT (information technology) capital accumulation, skills and key plant variables of 34 Indian industries for the period of 2009–2015.Design/methodology/approachAnnual Survey of Industries (ASI) data series are extracted and formulated using Microsoft SQL server. The authors employ Wooldridge (2009) technique to estimate productivity. To investigate the linkages among productivity, IT, skills and key plant variables, the authors estimate specifications using system generalized method of moments (sys-GMM). Advanced estimation techniques such as Heckman two-step process, probit equations, inverse Mills ratio and panel cointegration are applied to overcome problems of nonstationarity, omitted variables, endogeneity and reverse causality.FindingsThe results indicate that the level of IT capital influences the TFP of Indian industries, so does the level of skilled workers. The outcome suggests that intermediate capital goods, location and ownership type enable the strength of IT capital and that in turn boosts productivity. The authors fail to find any impact of regional factors and contractual labor on IT capital and productivity. While medium-level gender diversity is statistically significant to influence productivity, however, no complementarities exist between gender diversity and IT capital accumulation. The results also indicate that IT demand of Indian industries is sensitive to availability of skilled workforce, fuel and electricity and access to short-term funding.Originality/valueTo the authors' knowledge, this is the first study to investigate the nexus among TFP, IT capital accumulation, skills and organizational factors using ASI unit level data. Besides this, the paper offers two more novelties. First, it uses Wooldridge (2009) technique to estimate productivity, which is used by a handful of studies in the context of India. Second, the study identifies factors that impact productivity growth, IT demand and its adoption in Indian industries and thus contributes to growth and development literature.
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Awolusi, Olawumi Dele. "Policy and Non-Policy Factors: What Determines Foreign Direct Investments in Africa?" Journal of Social and Development Sciences 9, no. 4 (January 27, 2019): 49–61. http://dx.doi.org/10.22610/jsds.v9i4(s).2691.
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Studies have been conducted on the determinants of foreign direct investment (FDI) destinations. However, there seem to be few studies on determinants in African countries. This paper evaluates the determinants of FDI inflows, by examining specific relationships between the determinants (policy and non-policy factors) and FDI inflows to Africa, using a panel dataset from 1980 to 2016. Ordinary Least Squares (OLS) and Generalized Method of Moments (GMM) were used as the estimation techniques. The dependent variable, FDI inflows, was represented by the ratio of FDI flows to GDP, while the independent variables were agglomeration effects, trade openness, fiscal balance-macroeconomic condition, market size, economic instability, exchange rate, foreign aid, human capital development, corporate tax, and natural resource endowment. First-year lag of FDI (agglomeration effects), trade openness, market size, economic instability, foreign aid, human capital development, and natural resources (oil and metals) endowment have positive and significant effects on FDI inflows to Africa, while there is a negative relationship between FDI inflows to the continent and fiscal balance (public debt), exchange rate, and corporate tax. Consequently, government policies and non-policy factors played significant roles in facilitating FDI inflow into Africa during the study period. The p-value of the estimation (0.0001) further attests to the statistical significance of the results. Consequently, African countries must improve their regulatory framework to be able to attract more inflow of FDI. Efforts should also be made to reform and improve macroeconomic policies, institutional quality, and natural comparative advantages.