Asian Economic and Financial Review

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Online ISSN: 2222-6737
Print ISSN: 2305-2147
Total Citation: 1219

No.1

Energy Consumption and Economic Growth: A Disaggregate Approach


Pages: 255-261
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Energy Consumption and Economic Growth: A Disaggregate Approach

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Mohsin Nawaz, Mahpaar Sadaqat, Naveed Wahid Awan, Maria Qureshi
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Mohsin Nawaz, Mahpaar Sadaqat, Naveed Wahid Awan, Maria Qureshi (2012). Energy Consumption and Economic Growth: A Disaggregate Approach. Asian Economic and Financial Review, 2(1): 255-261. DOI:

This paper attempts to examine the long run as well as short run relationship between Pakistan’s real GDP and energy consumption at sectoral level. The analysis is based on the time series data from 1977 to 2010. We estimate the DOLS cointegration to check the long run relationship. The results indicate the long run relationship between energy consumption and real GDP on aggregate level as well as in industry and services sector but no evidence is found in agriculture sector. This paper also examines the direction of causality by employing Granger causality test and found bidirectional causality between variables under study and unidirectional causality runs from real GDP to energy consumption for industrial and services sectors but result is reverse for agriculture sector. 

 

 


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An Empirical Assessment of the Real Exchange Rate and Poverty in Nigeria


Pages: 244-254
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An Empirical Assessment of the Real Exchange Rate and Poverty in Nigeria

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Ben. U. Omojimite, Victor E. Oriavwote
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Ben. U. Omojimite, Victor E. Oriavwote (2012). An Empirical Assessment of the Real Exchange Rate and Poverty in Nigeria. Asian Economic and Financial Review, 2(1): 244-254. DOI:

This paper investigated the influence of the real exchange rate on poverty within the framework of a dependent economy model. Using data covering 1980 to 2010, the result of a Vector Error Correction model (VECM) showed that the volatility of the real exchange rate has significant influence on the level of poverty in Nigeria. Thus, government policies that targets real exchange rate could play significant role in reducing the level of poverty in Nigeria, particularly if supported by basic institutions, such as those of human capital development.


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Nuclear Energy in Turkey, Do We Need It Indeed?


Pages: 233-243
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Nuclear Energy in Turkey, Do We Need It Indeed?

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Serdar Erdurmaz
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Serdar Erdurmaz (2012). Nuclear Energy in Turkey, Do We Need It Indeed?. Asian Economic and Financial Review, 2(1): 233-243. DOI:

Two main events happened in 2007’s forced Turkey to reconsider of nuclear power plant building which has been postponed in several occasions. On the one hand Turkey aware that energy dependency to another states causing the negative effects to its developing economy, on the other hand she should take into consideration the threat coming by the Iran’s ongoing nuclear program. If Iran succeeds to produce a nuclear weapon, for Turkey the threat is indirect, and more tied to concerns about the balance of power and loss of relative status and influence in the region. With regard to the energy resources dependency to the other states, approximately 70 percent of Turkey’s domestic oil and gas are bought from abroad, and Russia and Iran are its top suppliers. Our country’s electricity demand tends to increase by a rapid average of 7.5%. Having been realized as 191.5 TWh in 2007, our electricity generation is expected by 2020 to reach 406 TWh with an annual increase of 5.96%. In order to meet the increasing demand for electricity, we need to at least double our existing installed power by 2020. To meet the need of Turkey for electricity in the near future, the projections indicate that it will be necessary to employ nuclear power for electricity production Construction of nuclear power plants is in progress. It seems determining the main target of Turkey’s desire to deal with the nuclear technology is very important for USA and the western states. This study aims to point out that which main factor is dominant for Turkey’s decision dealing with the nuclear technology, and foreseen Russian agreement.


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Vietnam Economic Structure Change Based on Input-Output Table (2000-2007)


Pages: 224-232
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Vietnam Economic Structure Change Based on Input-Output Table (2000-2007)

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Bui Trinh, Kiyoshi Kobayashi, Nguyen Viet Phong
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Bui Trinh, Kiyoshi Kobayashi, Nguyen Viet Phong (2012). Vietnam Economic Structure Change Based on Input-Output Table (2000-2007). Asian Economic and Financial Review, 2(1): 224-232. DOI:

This study presents main findings on Vietnam economic structure change based on Leontief system and the Vietnam Input-Output Tables (2000 and 2007).


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Islamic Financial in the Global Financial System


Pages: 207-223
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Islamic Financial in the Global Financial System

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Ahmad M. Mashal
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Ahmad M. Mashal (2012). Islamic Financial in the Global Financial System. Asian Economic and Financial Review, 2(1): 207-223. DOI:

This paper investigates the question of whether the phenomenon of Islamic finance who based on Shariah, or Islamic law is truly globalizing and spreading as a universal system of finance and banking. The paper also addresses various aspects of the globalization for Islamic finance, among other, the issue of the rise of Islamic banking in the world, Islamic jurisprudence and finance, global standards and integration for Islamic finance, and obstacles facing Islamic finance’s integration and growth into the global financial  system. the paper suggested three key areas of priority warrant greater policy attention to further strengthen and enhance the entire Islamic financial ecosystem, through putting in place building blocks that will strengthen the resilience of the Islamic financial system and by the application of mutually acceptable rules and standards. 


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Market Liquidity Behaviour in Futures Markets: Empirical Evidence


Pages: 192-206
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Fathi ABID, Lotfi TRABELSI
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Fathi ABID, Lotfi TRABELSI (2012). Market Liquidity Behaviour in Futures Markets: Empirical Evidence. Asian Economic and Financial Review, 2(1): 192-206. DOI:

In this study, we examine the relations between the three keys variables of liquidity such as trading volume, bid-ask spread, and intraday price volatility. Hausman’s (1978) tests of specification confirmed that trading volume, bid-ask spread and intraday price volatility are jointly determined. Our study, leaded with a different approach to estimate the three parameters in a three-equation simultaneous structural model, confirm Hausman’s (1978) conclusions. Empirical analysis, based on eight financial futures contracts, the most actively traded futures contracts in the Chicago Board of Trade (CBT) and the Chicago Mercantile Exchange (CME) markets, use the generalized method of moments (GMM) procedure. Empirical results, supporting theoretical developments, indicate the existence of a simultaneous relationship between these three variables of financial markets liquidity.


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An Empirical Analysis of the Determinants of Household Poverty in Turkey


Pages: 181-191
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An Empirical Analysis of the Determinants of Household Poverty in Turkey

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Ebru Cağlayan , Naime İrem Koşan, Melek Astar
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Ebru Cağlayan , Naime İrem Koşan, Melek Astar (2012). An Empirical Analysis of the Determinants of Household Poverty in Turkey. Asian Economic and Financial Review, 2(1): 181-191. DOI:

This paper investigates the determinants of household poverty in Turkey using ordered logit model. It also focuses on parallel regression hypothesis and uses generalized ordered logit model. In this study, the data has been obtained from Household Budget Survey in 2009 and poverty levels have been categorized in order to determine the factors affecting different levels of poverty. The findings show that middle class has approached poor classes and the gap between the rich and the middle class has widened.


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An Investigation of Small and Micro-Enterprise Owners’ Perceptions Towards Financial Credit Offered by Commercial Banks in the Cape Coast Metropolitan Area of Ghana


Pages: 171-180
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An Investigation of Small and Micro-Enterprise Owners’ Perceptions Towards Financial Credit Offered by Commercial Banks in the Cape Coast Metropolitan Area of Ghana

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John K. Mbroh
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John K. Mbroh (2012). An Investigation of Small and Micro-Enterprise Owners’ Perceptions Towards Financial Credit Offered by Commercial Banks in the Cape Coast Metropolitan Area of Ghana. Asian Economic and Financial Review, 2(1): 171-180. DOI:

This paper reports on a study conducted by collecting data from both the demand and supply sides of formal finance to understand the perceptions of each party towards the other, regarding financial credit offered by commercial banks in the Cape Coast Metropolitan Area of Ghana. The study is an empirical investigation of perceptions and attitudes respectively of the two parties and consequently the co-existence expected of them – the commercial banks, as an important source of business funding and the small and micro-enterprise owners (SMEOs), as valued customers. Findings of the study point to the fact that SMEOs, especially the unregistered ones have a very blinkered understanding of the banks’ financial credit procedures. The consequence of which, is the perceived rigid prudential measures by banks, weak locus of loan/overdraft applications and bargaining power in terms of credit quantum, interest rates and their resultant payment defaults. The banks on the other hand, would be required to do much more in terms of education on their products and procedures. In addition, their loan-repayment patterns and interest rates were found to be rigid and indiscriminate respectively and as a result, had made them unattractive to the SMEOs.  The study recommends the importance of building a healthy business partnership between the two parties as a means to improve access to finance by this SME sector.


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Procedure for Creating a Virtual Multibank Agent


Pages: 163-170
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Procedure for Creating a Virtual Multibank Agent

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Lozano Carmen, Fuentes Federico
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Lozano Carmen, Fuentes Federico (2012). Procedure for Creating a Virtual Multibank Agent. Asian Economic and Financial Review, 2(1): 163-170. DOI:

In this paper, we propose a procedure that makes it possible to create a virtual multibank agent that will assist potential banking customers in their decision making, who are demanding with respect to the level and quality of the banking services that they would like to receive, particularly when it comes to deciding to invest their savings or apply for financing for their expenses. The virtual multibank agent would act on two levels: first, it would optimize navigation through an online banking website; and secondly, it would sort through the banking information available online and refine this information in order to offer the best option among those available. Tabu search algorithms and the use of intelligent agents based on fuzzy logic by means of prior categorization are techniques that have proven to be useful in applications for the optimum distribution of information in the shortest amount of time possible, and the search for the best solution among all those available.


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Permanent Income Hypothesis, Myopia and Liquidity Constraints: A Case Study of Pakistan


Pages: 155-162
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Permanent Income Hypothesis, Myopia and Liquidity Constraints: A Case Study of Pakistan

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Khalid Khan, Hazrat Yousaf , Muhammed Ghazanfar Abbas , Manzoor H Memon ChE, Mohammed Nishat
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Khalid Khan, Hazrat Yousaf , Muhammed Ghazanfar Abbas , Manzoor H Memon ChE, Mohammed Nishat(2012). Permanent Income Hypothesis, Myopia and Liquidity Constraints: A Case Study of Pakistan. Asian Economic and Financial Review, 2(1): 155-162. DOI:

This paper is an attempt to test the Permanent Income Hypothesis (PIH), Myopia and Liquidity Constraints as a case study for Pakistan. The paper also attempts to find out valid reasoning incase the PIH is rejected.  Hall’s random walk model (1978) and Campbell and Mankiw model (1990) are used to test for the validity of PIH. The results reject the PIH and indicate the strong validity of Absolute Income Hypothesis (AIH) in Pakistan. Accordingly, Shea (1995) model is also used to validate the rejection of the PIH. The application of Shea (1995) model confirms the rejection; the symmetric relationship between consumption and expected income and provide a little evidence of existence of liquidity constraints


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Economic Growth and Income Inequality: Empirical Evidence from North African Countries


Pages: 142-154
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Economic Growth and Income Inequality: Empirical Evidence from North African Countries

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Zouheir ABIDA , Imen Mohamed SGHAIER
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Zouheir ABIDA , Imen Mohamed SGHAIER (2012). Economic Growth and Income Inequality: Empirical Evidence from North African Countries. Asian Economic and Financial Review, 2(1): 142-154. DOI:

This paper examines the empirical relationship between economic growth and income inequality for 3 countries of North Africa (Tunisia, Morocco and Egypt) over the period 1970-2004. The results of this paper indicate that the long-run growth elasticity of income inequality is negative and significant implying that keeping other factors constant; more income inequality reduces economic growth. Moreover, this paper finds evidence that more physical and human capital investment and higher openness to trade have statistically significant impact on enhancing economic growth and reducing poverty.


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Microfinance and Poverty Reduction in Ghana. The Case of Central Region of Ghana


Pages: 135-141
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Microfinance and Poverty Reduction in Ghana. The Case of Central Region of Ghana

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Alex Addae-Koranky
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Alex Addae-Koranky (2012). Microfinance and Poverty Reduction in Ghana. The Case of Central Region of Ghana. Asian Economic and Financial Review, 2(1): 135-141. DOI:

The study evaluated Microfinance as a tool for poverty reduction in Ghana using central region as a case study. A survey design involving quantitative, qualitative and participatory methods within the framework of impact assessment techniques was used. Simple random and stratified sampling methods were employed to select five Microfinance Institutions (MFIs) and one hundred microcredit beneficiaries. The study made use of both primary and secondary data. It was found out that though there are challenges microfinance has a positive impact on poverty reduction. Among the recommendations were that microfinance clients should be trained before and after disbursement of the loan; and also they should be effectively monitored. In addition to the above recommendations it was concluded that if the challenges facing the Microfinance sector (eg; inappropriate institutional arrangement, poor regulatory environment etc) are addressed microfinance will be a potent tool for poverty reduction not only in Ghana but all developing countries at large.


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Are Real Devaluations Contractionary? an Empirical Analysis for Pakistan


Pages: 119-134
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Are Real Devaluations Contractionary? an Empirical Analysis for Pakistan

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Naeem Ur Rehman Khattak, Muhammad Tariq
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Naeem Ur Rehman Khattak, Muhammad Tariq (2012). Are Real Devaluations Contractionary? an Empirical Analysis for Pakistan. Asian Economic and Financial Review, 2(1): 119-134. DOI:

The failure of Bretton Woods system in 1970s diverted the attention of the researchers and policy makers from the orthodox wisdoms of elasticities, absorptions and Keynesian towards the new structuralist theories of contractionary depreciations. The present study has been carried out to test this contractionary hypothesis of real depreciations for Pakistan in the framework of a three version IS curve approach by using annual data over the period, 1973-2008. The main finding of the study is that real depreciation increases the output gap in Pakistan. The results also show that movement towards a more flexible exchange rate regimes also raises the output gap.


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An Empirical Analysis of the Excessive Volatility-Overconfidence Relationship: Evidence from the Tunisian Stock Market


Pages: 100-118
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An Empirical Analysis of the Excessive Volatility-Overconfidence Relationship: Evidence from the Tunisian Stock Market

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Bayoudh Feker, Houfi Mohamed Ali, Tissaoui Kais, Zamouri Sana
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Bayoudh Feker, Houfi Mohamed Ali, Tissaoui Kais, Zamouri Sana (2012). An Empirical Analysis of the Excessive Volatility-Overconfidence Relationship: Evidence from the Tunisian Stock Market. Asian Economic and Financial Review, 2(1): 100-118. DOI:

The purpose of this paper is to provide that the explanation of excessive volatility can be only done through an attentive description of the psychological aspects of the investors. Our interest is carried in particular to the overconfidence bias. Our objective in this study is to identify whether the excessive volatility of observed stocks on the Tunisian Stock Market (TSE) results from the excessive trading of overconfident investors. The analysis of the obtained results, over the period January 1999 – October 2007, indicates quite clearly the importance of considering this bias in analysis of the specificities of Tunisian Stock Market (TSE). It appears that overconfidence admits a more pronounced effect on the volatility for daily time intervals compared to weekly and monthly intervals.The asymmetric nature of the dynamics of return volatility in response to positive and negative shocks is also checked.


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Modelling Non-Interest Income at Tunisian Banks


Pages: 88-99
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Modelling Non-Interest Income at Tunisian Banks

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Abdelaziz HAKIMI, Helmi HAMDI, Mouldi DJELASSI
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Abdelaziz HAKIMI, Helmi HAMDI, Mouldi DJELASSI(2012). Modelling Non-Interest Income at Tunisian Banks. Asian Economic and Financial Review, 2(1): 88-99. DOI:

The aim of this paper is to analyze the determinants of the non-interest income for the Tunisian context by the use of data of 10 Tunisian deposit banks. Our sample is observed during the period 1998-2009. Using panel data estimation; our findings reveal that the information and communication technologies adoption and the banking characteristics are the main influential factors shaping the tendency of non-interest income in Tunisia.


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Variations in Prices due to Anticipated and Unanticipated Money


Pages: 76-87
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Variations in Prices due to Anticipated and Unanticipated Money

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Biswajit Maitra, C. K. Mukhopadhyay
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Biswajit Maitra, C. K. Mukhopadhyay (2012). Variations in Prices due to Anticipated and Unanticipated Money. Asian Economic and Financial Review, 2(1): 76-87. DOI:

The relation between money and price has unique relevance in price stability. Rational expectations theorists hold that both anticipated and unanticipated money supply affect price level. This paper addresses this issue and enquires if anticipated and unanticipated money supplies have any role in the variations in whole sale and consumer prices (WPI & CPI) in India over the period 1992:Q1 to 2010:Q3. It is found that both anticipated and unanticipated money supply shocks cause rise in WPI and CPI inflation and justifying the rational expectations proposition. Price level, therefore, can be stabilized through appropriate monetary management.


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Government Deficits and Corporate Liquidity


Pages: 59-75
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Government Deficits and Corporate Liquidity

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Naiwei Chen, Siting Yo
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Naiwei Chen, Siting Yo (2012). Government Deficits and Corporate Liquidity. Asian Economic and Financial Review, 2(1): 59-75. DOI:

This study examines the relationship between government deficit and corporate liquidity (cash holdings). Using data of nonfinancial firms in Taiwan from 1981 to 2009, this study finds that corporate liquidity is lower when government deficit is higher. In addition, corporate liquidity is related with other macroeconomic conditions, such as inflation, short-term interest rate, and economic growth. More precisely, results indicate that inflation and interest rates have a negative impact on corporate liquidity that is aggravated when government deficit is higher. Economic growth has a positive impact on corporate liquidity, and such positive impact is weakened when government deficit is higher.


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Cash Management Practices of Small Business Owners in the Cape Coast Metropolitan Area of Ghana


Pages: 40-58
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Cash Management Practices of Small Business Owners in the Cape Coast Metropolitan Area of Ghana

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John K. Mbroh
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John K. Mbroh (2012). Cash Management Practices of Small Business Owners in the Cape Coast Metropolitan Area of Ghana. Asian Economic and Financial Review, 2(1): 40-58. DOI:

The burden of cash management has become a topical issue in small businesses. To gain information on current practice, this paper examines survey evidence on cash management practices of two hundred and two small business owners (SBOs) in the Cape Coast Metropolitan Area of Ghana. It is evident in the study that majority of the SBOs studied either do not understand the attributes or the importance of cash management and as a result did not practice any formal system of the concept. The informal systems of cash management mainly practiced were found to be susceptible to cash fraud and other business growth difficulties. Some associated cash management problems have been highlighted and solutions proffered for ameliorating the situation. The paper further suggests that future research and policy directions consider gender differences and attributes as well as some industry peculiarities to the present rear growth in this important business unit.


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Examining CSR Reporting and Economic Crisis a Study of GRI Reporting Companies


Pages: 30-39
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Examining CSR Reporting and Economic Crisis a Study of GRI Reporting Companies

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Calderon Huerta Mario Rodolfo
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Calderon Huerta Mario Rodolfo (2012). Examining CSR Reporting and Economic Crisis a Study of GRI Reporting Companies. Asian Economic and Financial Review, 2(1): 30-39. DOI:

This paper explores the relationship between CSR Reporting and the last global economic crisis that started in the late half of the year 2007. The sample of the study is composed of companies included in the "GRI Report list 1999-2011", more specifically 2790 companies that published CSR reports during the period 2007-2011. One-way repeated measures ANOVA testing on three factors (Report Type, Application Level and Report Status) revealed that transparency and quality of the reports decreased during the years 2007, 2008 and 2011, years that have been linked with the economic crisis or economic uncertainty. Therefore, this paper supports the need to maintain Ethical and Sustainability standards during economic crisis and concludes that more than a threat, Corporations and Society in general, should approach this as an opportunity period to improve CSR-Reporting, a period in which the need for Ethic behavior and Corporate Social Responsibility is greater.


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Relationship between Working Capital, Operating Cash Flows and Operating Income: Empirical Evidences from Listed Firms in Tehran Stock Exchange


Pages: 20-29
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Hashem Valipour, Zakieh Shooshtarian, Esmail Ostovari
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Hashem Valipour, Zakieh Shooshtarian, Esmail Ostovari(2012). Relationship between Working Capital, Operating Cash Flows and Operating Income: Empirical Evidences from Listed Firms in Tehran Stock Exchange. Asian Economic and Financial Review, 2(1): 20-29. DOI:

The main purpose of this research is to investigate the relationship between working capital, operating cash flow and operating income, in the companies that listed in Tehran Stock Exchange. Panel analysis is applied to sample of 52 companies during the period 2000-2009. The results show that there is a positive relationship between working capital and operating profit. But there is not meaningful relationship between operating cash flows and working capital.


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Favorable and Unfavorable Conditions for Innovation: Some Cross Country Evidence


Pages: 14-19
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Favorable and Unfavorable Conditions for Innovation: Some Cross Country Evidence

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William R. DiPietro
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William R. DiPietro (2012). Favorable and Unfavorable Conditions for Innovation: Some Cross Country Evidence. Asian Economic and Financial Review, 2(1): 14-19. DOI:

The paper employs cross country regression analysis to estimate the effect of democracy and income inequality, adjusting for the level of income and other variables, on country innovation. It finds that both of these variables are of consequence for innovation. Different countries innovate at different rates. Some countries are very creative while other countries are not. Innovation is of vital importance to economic activity. The long term health of the economy depends on innovation, as creativity and innovation are the key drivers of economic growth. Understanding the determinants of creativity and innovation is, therefore, a serious endeavor. While it is common to study the reasons for differences in creativity and innovation across firms and countries by knowledge production function inputs such as dollar expenditure on research and development, looking for more fundamental underlying socio-political variables at the country level that may lead to a more favorable or less favorable environmental conditions for innovation is less common. National socio-political country conditions are not the direct determinants of innovation such as those at the firm level, but, rather, they are the behind the scenes forces influencing the development of these direct components. For instance, greater freedom and democracy may create individuals who are more autonomous, independent, and entrepreneurial. If, at the firm level, certain corporate cultural characteristics are the key to innovation, then some country characteristics will provide a more favorable milieu for their evolution and appearance, while others will not. The purpose of this paper is to focus on two socio-political variables, democracy and income inequality, as potential determinants of innovation. In pursuit of this undertaking, the paper is divided into five parts. The first part looks at potential theoretical reasons why democracy and income inequality and a few other country variables may have relevance for innovation. The second section discusses the measures that are employed in the empirical analysis and identifies data sources. The third part shows the outcomes of regression runs on innovation and democracy and on innovation and income inequality adjusting for the level of economic development and for other variables. The final section concludes.


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A Dynamic Causality Study between Electricity Consumption and Economic Growth for Global Panel: Evidence from 76 Countries


Pages: 1-13
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A Dynamic Causality Study between Electricity Consumption and Economic Growth for Global Panel: Evidence from 76 Countries

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Md. Sharif Hossain, Chikayoshi Saeki
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Md. Sharif Hossain, Chikayoshi Saeki (2012). A Dynamic Causality Study between Electricity Consumption and Economic Growth for Global Panel: Evidence from 76 Countries. Asian Economic and Financial Review, 2(1): 1-13. DOI:

This paper empirically examines the dynamic causal relationships between electricity consumption and economic growth for five different panels (namely high income, upper middle income, lower middle income, low income based on World Bank income classification and global) using time series data from 1960 to 2008. Three panel unit root tests results support that both the variables are integrated of order 1 for all panels except low income panel. Only the variable economic growth is integrated of order 1 for low income panel. The Kao and Johansen Fisher panel conintegration tests results support that both the variables are cointegrated for high income, upper middle income and global panels but for lower middle income and low income panels are not cointegrated. Bidirectional causality between economic growth and electricity consumption both in the short-run and long-run is found for high income, upper middle income and global panels from the Granger causality test results. Unidirectional short-run causality is found from economic growth to electricity consumption for lower middle income panel and no causal relationship is found for low income panel. It is found that the long-run elasticity of economic growth with respect to electricity consumption is higher for high income, upper middle income and for global panels indicates that over times higher electricity consumption gives rise to more economic growth in these panels.


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