- Volume 6 No.12
- Volume 6 No.11
- Volume 6 No.10
- Volume 6 No.9
- Volume 6 No.8
- Volume 6 No.7
- Volume 6 No.6
- Volume 6 No.5
- Volume 6 No.4
- Volume 6 No.3
- Volume 6 No.2
- Volume 6 No.1
- Volume 5 No.12
- Volume 5 No.11
- Volume 5 No.10
- Volume 5 No.9
- Volume 5 No.8
- Volume 5 No.7
- Volume 5 No.6
- Volume 5 No.5
- Volume 5 No.4
- Volume 5 No.3
- Volume 5 No.2
- Volume 5 No.1
- Volume 4 No.12
- Volume 4 No.11
- Volume 4 No.10
- Volume 4 No.9
- Volume 4 No.8
- Volume 4 No.7
- Volume 4 No.6
- Volume 4 No.5
- Volume 4 No.4
- Volume 4 No.3
- Volume 4 No.2
- Volume 4 No.1
- Volume 3 No.12
- Volume 3 No.11
- Volume 3 No.10
- Volume 3 No.9
- Volume 3 No.8
- Volume 3 No.7
- Volume 3 No.6
- Volume 3 No.5
- Volume 3 No.4
- Volume 3 No.3
- Volume 3 No.2
- Volume 3 No.1
- Volume 2 No.8
- Volume 2 No.7
- Volume 2 No.6
- Volume 2 No.5
- Volume 2 No.4
- Volume 2 No.3
- Volume 2 No.2
- Volume 2 No.1
Asian Economic and Financial Review
Publish by: Production and Hosting by Pak Publishing Group on behalf of Asian Economic and Social Socie
Online ISSN: 2222-6737
Print ISSN: 2305-2147
Print ISSN: 2305-2147
Determinants of Earnings: Evidence from Pakistan Engineering Sector
Kashif Imran, Khalid Naeem Akbar
Engineering sector plays a considerable role in Pakistan’s economy. The contribution of engineering industry to GDP is $2 billion and it provides employment to significant personnel. The engineering sector in a number of economies of the world, works as a major and speedy engine of economic growth. This study is an attempt to identify the factors affecting the earnings of engineering sector of Pakistan, by using the panel data of twenty-seven engineering firms listed on Karachi Stock Exchange (KSE) covering the period of 1990 to 2008. It is found that, in the long run Net Working Capital, and GDP growth has a positive impact on Earnings per Share and Operating Ratio, Net Fixed Assets and GDP deflator has a negative impact while Interest rate has not significant effect on earnings per share.
- Baltagi, H.B. (2003). “Econometric Analysis of Panel Data”, 2nd Edition, John Wiley & Sons Ltd, New York.
- Banerjee, Anindya., Marcellino, Massimiliano and Osbat, Chiara (2004). “Some Cautions on the Use of Panel Methods for Integrated Series of Macroeconomic Data”, Econometrics Journal, Vol. 7(2), pp. 322-40.
- Breitung, Jörg (2000). “The Local Power of Some Unit Root Tests for Panel Data”, B. Baltagi (ed.): Nonstationary Panels, Panel Cointegration, and Dynamic Panels, Advances in Econometrics, Vol. 15, Amsterdam: JAI Press, pp. 161-78.
- Chen, Jong, Rong and Lu, Wen, Cheng (2003). “Panel Unit Root Tests of Firm Size and Its Growth”, Applied Economics Letters, Vol. 10(6), pp. 343-45.
- Choi, I. (2001). “Unit Root Tests for Panel Data”, Journal of International Money and Finance, Vol. 20, pp. 249–72.
- Greene, W. H. (2003). “Econometric Analysis”, Prentice Hall New Jersey.
- Gujarati, D. N. (2004). “Basic Econometrics”, 4th Ed. The McGraw?Hill Companies, pp. 642.
- Gutierrez, Luciano (2003). “On the Power of Panel Cointegration Tests: A Monte Carlo Comparison”, Economics Letters, Vol. 80(1), pp. 105-11.
- Haberfeld, Yitchak (1994). “Status Variables in Fixed Effect Models”, Economics Letters, Vol. 45(3), pp. 299-303.
- Hadri, Kaddour (1999). “Testing The Null Hypothesis Of Stationarity Against The Alternative of A Unit Root In Panel Data With Serially Correlated Errors”, Working Paper No. 5, University of Liverpool Management School.
- Im, K. S., Pesaran, M. H, and Y. Shin (2003). “Testing for Unit Roots in Heterogeneous Panels” Journal of Econometrics, Vol.115, pp. 53-74.
- Kao, Chihwa and Chiang, Min-Hsien (1999). “On the Estimation and Inference of A Cointegrated Regression in Panel Data”, Working Paper No. 2, Maxwell School of Citizenship and Public Affairs Syracuse University.
- Kwiatkowski, D., P. C. B. Phillips., P. Schmidt and Y. Shin (1992). “Testing the Null Hypothesis of Stationary Against the Alternative of a Unit Root”, Journal of Econometrics, Vol. 54, pp. 159–78.
- Levin, A., Lin, C. F. and C, Chu (2002). “Unit Root Tests in Panel Data: Asymptotic and Finite-Sample Properties”, Journal of Econometrics, Vol.108, pp. 1-24.
- McCoskey, S. and Chihwa, Kao. (1998). “A residual–based tests of the null of cointegrationin panel data”, Econometric Review, Vol. 17, pp. 57–84.
- Maddala, G. S. and S, Wu (1999). “A Comparative Study of Unit Root Tests with Panel Data and A New Simple Test”, Oxford Bulletin of Economics and Statistics, Vol.61, pp. 631-52.
- Pedroni, P. (1999). “Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors”, Oxford Bulletin of Economics and Statistics, Vol.61, pp. 653-70.
- Phillips, P.C.B and Perron, P. (1988). “Testing for a unit root in time series regression”, Biometrika. Vol.\ 75, pp. 335-46.
- Samuel, Bowles., Herbert, Gintis and Melissa, Osborne (2001). “The determinants of earnings: A behavioral approach”, Journal-of-Economic- Literature, Vol. 39(4), pp. 1137-76.
- Stephen, Dobson and Bill, Gerrard. (1991). “The Financial Performance of the Leeds Engineering Sector”, Urban Studies, Vol. 28, pp. 53-64.
- Stock, James, H. and Watson, Mark, W. (1993). “A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems”, Econometrica, Vol. 61(4), pp. 783-820.
- Westerlund, Joakim and Basher, Syed A. (2008). “Mixed Signals Among Tests for Panel Cointegration”, Economic Modelling, Vol. 25(1), pp. 128-36.
The Forecasting Performance of Seasonal and Nonlinear Models
Houda Ben Hadj Boubaker
In this paper, we compare the forecasting performance of seasonal and non linear auto regressive models in terms of point, interval, and density forecasts for the growth rates of the Tunisian industrial production, for the period 1976:1- 2006:2. Our results suggest that the point forecasts generated by the linear models perform better than those provided by the nonlinear models at all horizons. By contrast, the analysis of interval and density forecasts at horizons of one and three quarters provide an evident support for the nonlinear models, this result is in line with the literature. Thus, our findings assess the usefulness of nonlinear models to investigate the dynamic behavior of economic systems and to produce accurate forecasts.
- ---Berkowitz J (2001) Testing density forecasts, with applications to risk management. Journal of Business and Economic Statistics 19: 465-474.
- ---Christoffersen PF (1998) Evaluating interval forecasts. International Economic Review 39: 841-862.
- ---Clements MP, Krolzig HM(1998) A comparison of the forecast performance of Markov-Switching and threshold autoregressive models of US GNP. Econometrics Journal 1: C47-C75.
- ---De Gooijer JG, Kumar K (1992) Some recent developments in non-linear time series modelling, testing and forecasting, International Journal of Forecasting 8: 135-156.
- ---Diebold FX., Mariano RS (1995) Comparing predictive accuracy. Journal of Business and Economic Statistics 13: 253-263.
- ---Diebold FX., Gunther TA, Tay AS (1998) Evaluating density forecasts with applications to financial risk management. International Economic Review 39: 863--883.
- ---Franses PH, van Dijk D (2005) Forecasting performance of various models for seasonality and nonlinearity for quarterly industrial production. International journal of forecasting 21: 87-102.
- ---Fuller WA. (1976) Introduction to Statistical TimeSeries. Wiley, New York.
- ---Hamilton JD (1989) A new approach to the economic analysis of nonstationary time series subject to changes in regime. Econometrica 57: 357-384.
- ---Harding D, Pagan AR (2002) Dissecting the cycle: a methodological investigation. Journal of Monetary Economics 49: 365--381.
- ---Harvey DI, Leybourne SJ, P Newbold P (1997) Testing the equality of prediction mean squared errors. International Journal of Forecasting 13: 281-291.
- ---Harvey DI, Leybourne SJ, P Newbold P (1998) Tests for forecast encompassing. Journal of Business and Economic Statistics 16: 254-259.
- ---Hylleberg S, Engle RF, Granger CW, Yoo BS (1990) Seasonal integration and cointegration. Journal of Econometrics 44: 215-238.
- ---Lundbergh S, Terasvirta T, van Dijk D (2003) Time-varying smooth transition autoregressive models. Journal of Busines and Economic Statistics 21: 104--121.
- ---Marcellino M (2004) Forecasting EMU macroeconomic variables. International Journal of Forecasting 20:359-372.
- ---Medeiros MC, A. Veiga, CE Pedreira (2001) Modeling Exchange Rates: Smooth Transitions, Neural Networks, and Linear Models. IEEE Transactions on Neural Networks 12: 755-764.
- ---Rapach D.E, Wohar ME (2005) The out-of-sample forecasting performance of nonlinear models of real exchange rate behavior. International Journal of Forecasting 22: 341-361.
- ---Siliverstovs BD, V Dijk (2003) Forecasting Industrial Production with Linear, Nonlinear and Structural Change Models. Econometric Institute Report EI 2003-16, No. 16, May, 2003.
- ---Stock JH, Watson MW (1998) A comparison of linear and nonlinear univariate models for forecasting macroeconomic time series, mimeo, Harvard University.
- ---Terasvirta T (1994) Specification, estimation, and evaluation of smooth transition autoregressive models. Journal of the American Statistical Association 89: 208-218.
- ---Terasvirta T, Anderson, HM (1992) Characterizing nonlinearities in business cycles using smooth transition autoregressive models. Journal of Applied Econometrics 7: S119-S136.
- ---Tong H (1990) nonlinear time series: A dynamical systems approach. Oxford: Oxford University Press.
- ---van Dijk D,Strikholm B, Terasvirta T (2003) The effects of institutional and technological change and business cycle fluctuations on seasonal patterns\ in quarterly industrial production series. Econometrics Journal 6: 79-98.
- ---Wallis KF (2003) Chi-squired tests of interval and density forecasts and the Bank of England's fan charts. International Journal of Forecasting 19: 165-175.
Economic Freedom Verses Economic Growth: Cross Countries Analysis in the form of ARDL approch
Khalid Mahmood, Toseef Azid
The generous theoretical and empirical debates are available on institutional freedom and economic growth, but unsuccessful to facilitate stationary conclusion regarding the nature of connection. It is still confusing that either economic freedom cause economic growth or economic growth widens the foundation for economic freedom. The finale will be more puzzled if the analysis based on different kinds of economies. The aim of this study is to probe the nature of relationships between economic freedom and economic growth in different kinds of economies. For statistical evidence autoregressive distributed lag (ARDL) approach is employed by using the data of 96 countries [High Income (29), Upper Middle Income (18), Lower Middle Income (26) and Lower Income (23)]. The empirical results indicate bilateral and robust relationships between economic freedom and economic growth in high income and lower middle income countries, while in upper middle income and low income countries, economic freedom causes economic growth in unilateral connection.
- Heckelman J.C. (2000), “Economic Freedom and Economic Growth: A Short-run Causal Investigation” journal of Applied Economics, Vol.III, No.1 (May) pp.71-91.
- Farr, W.K., R.A. Lord, and J.L.Wolfenbarger (1998), “Economic Freedom, Political Freedom, and Economic Well-being: A Causality Analysis” Cato journal 18: pp. 247-262.
- Cole J.H. (2003), “The Contribution of Economic Freedom to World Economic Growth, 1980-99.” Cato Journal, Vol.23, No.2 (fall), pp.189 -198.
- Nelson M.A. and R.D.Singh,( 1998), “Democracy, Economic Freedom, Fiscal Policy, and Growth in LDCs: A Fresh Look.” Journal of Economic, Development and Cultural Change, Vol.46, N.4 (July), pp.677-696.
- Erdal, F. (2006) “Economic Freedom and Economic Growth: A Time Series Evidence from the Italian Economy” working paper Department of Economics, Adnan Menderes University, Aydin, Turkey and International Centre for Economics Research, Torino Italy.
- De Haan, J. and J.E. Sturm, (2000), “On the relationship between economic freedom and economic growth” European journal of Political Economy, 16, pp.215-241.
- De Vanssay, X. and Z.A. Spindler (1994), “Freedom and Growth: Do Constitutions Matter?” Public Choice 78, pp.359-372.
- Dawson, J. (1998), “Investment and Growth: New Cross Country and Panel Data Evidence” Economic Inquiry36, pp.603-619.
- Gwartney, James G., Robert A. Lawson, and Randall G. Holcombe, (1999), “Economic Freedom and the Environment for Economic Growth” Journal of institutional and Theoretical Economics 155, no.4, pp.01-21.
- Ng, S. and Perron, P. (2001), “Lag Length Selection and the Construction of Unit Root Test with Good Size and Power” Econometrica, 69, pp. 1519-1554.
- Narayan .P.K. (2005), “The saving and investment nexus for China: evidence from co- integration tests” Applied Economics, 37, pp.1979-1990.
- Pesaran M.H. and Pesaran B. (1997), “Micro fit 4.0” Oxford University Press, Oxford.
- Pesaran M.H. and Shin Y. (1999), “An autoregressive distributed lag modeling approach to co-integration analysis, in econometrics and economic theory in the 20th century ” the Ragner Frisch centennial symposium,(Ed.) S. Storm, Cambridge University Press ,Cambridge, pp.1-33.
- Pesaran M.H., Shin Y., and Smith R.J. (2001), “Bounds testing approaches to the analysis of level relationships” Journal of Applied Econometrics.16, pp.289-326.
- Phillips, P.C.B. and Perron, P. (1988), “Testing for a unit root in Time series regression” Biometrica, 75, 335-446.
- Spindler, Z.A. and J.F. Miyake, (1992), “Prospecting for the ‘Homework’ Measures of Economic Freedom: A Summary” in S.T. Easton and M.A. Walker (eds.) Rating Global Economic Freedom, Vancouver, the Fraser Institute, 230-254.
- World Development Indicators (WDI) 2008 CD Statistics.
- Wu, Wenbo, and Otto A. Davis, (1999), “The Two Freedoms, Economic Growth and Development: An Empirical study.” Public Choice 100, nos.1-2, pp.39-64.
- Gwartney, J. and R. Lawson, Economic Freedom of the World: Annual Report 2007. Vancouver: The Fraser Institute 2007.
Dimension of Globalization And Their Effects On Economic Growth
Utpal Kumar De, Manoranjan Pal
The globalisation is supposed to reduce regional inequality, poverty and promote sustainability and improve overall human quality. Several studies have provided contradictory results in regard to the effect of globalisation, either in case of growth of GDP, or reduction in inequality and poverty or maintaining environmental sustainability and finally the human development. This paper attempts to examine the pattern of globalisation across the countries along with its effect on the growth of GDP as well as human development index. The term globalization is becoming more and more meaningful as can be seen from the interrelations of these variables. Also globalization has been seen to have effect on the contemporary and very recent future values only.
- Ayorinde, F.O., O. Adenikinju and A. Adenikinju (1998), “The Impact of Trade Liberalization on Technological Acquisition in Nigerian Manufacturing Sector” Journal of Economic Management, 5 (2): 89-122.
- Beer, Linda; Terry Boswell (2001), “The Effects of Globalization on Inequality: A Cross-National Analysis”, Halle Institute Occasional Paper.
- Bergh, A. and T. Nilsson (2008), “Do economc Liberalization and Globalization Increase Income Inequality?”, mimeo, Lund University.
- Blomstrom, M.; R. E. Lipsey and M. Zejan (1992), “What Explains Developing Country Growth?”, NBER Working Paper 4132.
- Borensztein, E.; J. de Gregorio; J.-W. Lee. (1998), “How Does Foreign Direct Investment Affect Economic Growth?“, Journal of International Economics 45: 115-135.
- Carkovic, M. and R. Levine (2002), Does Foreign Direct Investment Accelerate Growth?, mimeo, University of Minnesota.
- Crafts, N. (2000) “Globalization and Growth in the Twentieth Century” IMF Working Paper No. 44, Washington: International Monetary Fund.
- Crafts, N. (2003), “Globalisation and Economic Growth: A Historical Perspective” Tore Browaldh Lecture at the University of Gothenburg on 14 January, 2003.
- Dollar, D., A. Kraay (2001), Trade, Growth, and Poverty, World Bank Discussion Paper, Washington, D.C.
- Dreher, A. (2003), “Does Globalization Affect Growth?”, University of Mannheim discussion paper, Mannheim: Germany.
- Dreher, Axel (2007): “Does Globalization Affect Growth? Evidence from a new Index of Globalization”, Applied Economics 38, 10: 1091-1110.
- Dreher, Axel, Noel Gaston and Pim Martens (2008), Measuring Globalisation – Gauging its Consequences (New York: Springer).
- Edison, H. J.; R. Levine; L. Ricci and T. Slok (2002), “International Financial Integration and Economic Growth”, IMF Working Paper 02/145, Washington, D.C.
- Gereffi, G. and T. J. Sturgeon (2004), “Globalization, Employment, and Economic Development: A Briefing Paper”, MIT-IPC Working Paper 04-007, MIT.
- Greenaway, D.; W. Morgan and P. Wright (1999), “Exports, Export Composition and Growth”, Journal of International Trade & Economic Development 8, 1: 41-51.
- Guerrero, B. J. E. (2010), “Politics, Globalization and Food Crisis Discourse”, Economics: The open- Access, Open-Assessment E-Journal Discussion Paper No: 2010-22.
- Heilbuth, B. (2010), “A Growing Hunger”, Development Asia, 8-14.
- Heinemann, Friedrich (2000), Does Globalization Restrict Budgetary Autonomy? A Multidimensional Approach, Intereconomics 35(6): 288-298.
- IMF (2002), Globalization: Threat or Opportunity? Issues, Briefs, Washington: International Monetary Fund.
- Kaplinsky, Raphael (2004), “How Does It All Add Up? Caught Between a Rock and a Hard Place” Paper submitted for the Globalization, Employment, and Economic Development Workshop, Sloan Workshop Series in Industry Studies, Rockport, Massachusetts, June, 14-16.
- Li, Q. and R. Reuveny (2003), “Economic Globalization and Democracy: An Empirical Analysis”, British Journal of Political Science.
- Masson, P. (2001), “Globalisation: Facts and Figures.” IMF Policy Discussion Paper No. 4, Washington: International Monetary Fund.
- Ocampo, J. O. (2003), Globalization and Development, Washington: The World Bank.
- Onwuka, E. C. and A. Eguavoen (2007), “Globalization and Economic Development: The Nigerian Experience”, Journal of Social Science, 14 (1): 45-51
- Rodrik, D. (1999), “The New Global Economy and Developing Countries: Making Openness Work.” Policy Essay No. 24, Washington: Overseas Development Council.
- Sachs, J. (2000), “A New Global Consensus of Helping the Poorest of the Poor”, (pp. 39-47) in B. Pleskovic and N. Stern, (eds.), Annual World Bank Conference on Development Economics 2000: Washington: The World Bank.
- Schneider, F. and D. Enste (2002), Hiding in Shadows The Growth of the Underground Economy, Washington: International Monetary Fund.
- UNCTAD (United Nations Conference on Trade and Development, 2001), Post–Uruguay Round Market Access Barriers for Industrial Products, Policy Issues in International Trade and Commodities Study Series No. 12, Geneva: United Nations.
- UNCTAD (2002), Trade and Development Report, 2002, Geneva: UNCTAD. United Nations (2001), World Economic and Social Survey 2001: Trends and Policies in the World Economy, New York: Department of Economic and Social Affairs, United Nations.
- Vaubel, Roland (1999), “Internationaler Politischer Wettbewerb: Eine europaische Wettbewerbsaufsicht fur Regierungen und die empirische Evidenz“, in: Karl-Ernst Schenk, Dieter Schmidtchen, Manfred E. Streit, Viktor Vanberg (eds.), Jahrbuch fur Neue Politische Okonomie: 280-309.