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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
Online ISSN: 2222-6737
Print ISSN: 2305-2147
Print ISSN: 2305-2147
Total Citation: 1219
Financing Capital Investments in Nigeria: The Role of the Banking Industry
Jude A. Aruomoaghe --- Ekundayo Olugbenga
A developing nation like Nigeria needs huge capital outlay to finance the needed infrastructures and capital investments necessary to drive the economy. This study lays much emphasis on whether the banking industry is really financing capital investment thereby contributing immensely to the development of the economy. It also looks at the contribution of financial institutions in promoting the development of the stock market thereby mobilizing fund that will enhance manufacturing of goods. Data were collected from the CBN statistical bulletin spanning a period of 32 years (1981 ? 2012). The data collected were analysed with regression using e-view software. It was discovered that the banks have contributed much in financing capital investments and stock market development in Nigeria. It was recommended that financial institutions should be encouraged to mobilize more deposit for lending that will aid capital investment. While the Central Bank on the other hand should reduce its minimum rediscounting rate.
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Savings, Foreign Direct Investment Inflows and Economic Growth in Emerging Asian Economies
Saving rate is one of the important elements of all the theories of economic growth and foreign direct investment inflows also became an important determinant of economic growth together with the globalization process as of 1990s. Therefore many studies have been conducted on the relationship between economic growth and savings, foreign direct investment inflows. This study examines the effects of domestic savings and foreign direct investment inflows on the economic growth in emerging Asian economies during the period 1982-2012 by using Pedroni, Kao and Johansen-Fisher panel co-integration tests and vector error correction model. We found that gross domestic savings, gross domestic investment and foreign direct investment inflows had positive effect on economic growth in the long run.
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Pairs Trading Strategy in Dhaka Stock Exchange: Implementation and Profitability Analysis
Sharjil Muktafi Haque --- A. K. Enamul Haque
The objective of this study is to develop a financially profitable Pairs trading model for trading in Dhaka Stock Exchange. Pairs Trade is a statistical arbitrage investment strategy. The study used daily stock prices of a sample of 20 stocks listed in Dhaka Stock Exchange. The research first identified a pair of stocks whose prices have a long-run equilibrium using Johansen?s test for cointegration. The cointegrated stock pair is then modeled using a Vector Error Correction Model. The residual obtained from the estimated model serves as the guide to implementing Pairs Trading Strategy. The research finally identified three pairs of stocks which have general long-run equilibriums. Based on the residual series of these pairs, we implemented pairs trading strategy for a period of one to two months using real time data but doing hypothetical trading. It generated significant returns for all trades carried out using both in-sample and out-of-sample data. Given that Bangladesh stock market is frequently subjected to unprecedented volatility, a market-neutral investment strategy like Pairs Trading can be a valuable option to retail and institutional investors. We recommend undertaking policy initiatives required to allow investors to utilize this strategy in Bangladesh.
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Product Market Structure and Earnings Quality: Evidence Tehran Stock Exchange
Mansooreh Mohebbi --- Yahya Kamyabi
The purpose of this paper is to examine the relationship between product market structure and earnings quality in listed companies of Tehran Stock Exchange. To achieve this goal, we used Herfindahl - Hirschman Index, Lerner and Adjusted Lerner Indexes to measure product market structure and discretionary accruals for earnings quality. Our sample consists of 1144 out of 143 observations of firms for the period of 2008-2012. Using Panel Data Method, we found a significant positive relationship Herfindahl -Hirschman Index and earnings quality. Furthermore, the results show a significant positive relationship between the Lerner Index and the Adjusted Lerner Index and earnings quality. This finding means that no matter how the competition is more in the industry; the earnings quality will be higher.
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The Impact of Bird Flu on the Economy: CGE Model Approach (Computable General Equilibrium Model)
The negative impact of the outbreak of bird flu on economic sectors in the partial and macro research will be analyzed using CGE models (Computable General Equilibrium). The result of the simulation studies indicate that the sector directly affected by the outbreak of bird flu poultry sectors are a traditional, medium large poultry meat and eggs. While the sectors that are indirectly affected sectors are rice, corn, soybean ad agricultural, other livestock, paper industry, fertilizer industry, chemical industry, pharmacy, restaurant and services. Next the result of the simulation showed that the decrease in the production of poultry meat sector (traditional and medium-large) and egg sectors impact on the micro and macro aspects of the economy. On the micro level in domestic market there are decreased production and increased prices in the poultry sector, eggs, other farms, restaurants and services. While in the foreign market there are decreased exports as well as imports.Furthermore, there is a decline in consumption by the entire group of household due to a decline in the acceptance by all groups of households and firms. Government revenue also declined due to a decrease in taxes from households and firms. So it can be said there are a decline in the income of households and the government. At the macro level there are a decline in GDP and a decline in the investment. There are no change in the price of capital and labor. Similarly, the interest rate and the inflation rate are fixed.
- Arndt, C. and F. Tarp, 2000. Agricultural technology , risk , and gender : A CGE analysis of Mozambique . World Development, 28(7): 1307-1326.
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- Oktaviani, R., 2001. The impact of APEC trade liberalization on Indonesian economy and its agricultural sector. [ Thesis ]. Sydney : The Sydney University.
- Oktaviani, R., 2008. The impact of the bird flu outbreak macroeconomic Indonesia : A CGE approach . Bogor : Department of Economics , University.
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Financial Sector Development and Poverty Reduction in Nigeria: A Vector Autoregression Analysis (1980-2010)
Risikat Oladoyin S. Dauda --- Kayode O. Makinde
This study examines the nexus between financial sector development and poverty reduction in Nigeria using Vector autoregressive (VAR) model. The choice of the study has been motivated by the alleged failure of the financial sector development in bringing about a reduction in the worsening trend in poverty incidence in Nigeria. The evidences from both the VAR and impulse response show that the indirect effect of economic growth exerts the strongest influence on poverty reduction in the short run but could be detrimental to the poor in the long run due to the adverse effect of income inequality. Furthermore, the relationship between poverty and the financial deepening proxied by broad money supply (M2) is negative and significant. Hence, the McKinnon conduit effect is the likely main transmission channel through which the poor benefit from the financial sector development in the long run. The study, however, concludes that credits to private sector, contrary to the general belief, have failed to cause a reduction in the incidence of poverty in Nigeria.
- Adebiyi, M.A., 2005. A study of financial sector deregulation and monetary policy in Nigeria (1970- 1998), Unpublished Ph.D Dissertation, University of Lagos.
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The objective of the study is to investigate the relationship between economic growth and economic freedom for different income groups. Therefore, the data were collected from 94 different countries belonging to five different income groups in order to cover the period from 2000 to 2010. In the study, relationship between the economic growth of the country and the level of freedom index which Fraser Institute measured and its sub-components constituting was questioned through the panel data analysis method. As a result of the analyses, it was found that there is a statistically significant positive relationship between the level of economic freedom for all income groups and economic growth. With the inclusion of sub-components of freedom index into the model, the effects of such sub-components vary depending on the income groups.
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Yu Hsing --- Wen-jen Hsieh
Based on a simultaneous-equation model of loan demand and loan supply and applying the three-stage least squares method, this paper finds that loan demand is negatively affected by the lending rate and positively associated with manufacturing production and the inflation rate and that loan supply is positively influenced by the lending rate, bank deposits, and the nominal effective exchange rate and negatively affected by the government bond yield and the policy rate. The bank lending channel is confirmed for South Africa as expansionary monetary policy such as a lower policy rate or open market purchases of government bonds would reduce the cost of borrowing by banks and increase bank deposits/reserves.
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The Effect of NHIA Debt on Accounts Payables Management in Public Hospitals
NHIS has become a key means of ensuring accessibility to improved health care delivery in many countries. Indebtedness on the scheme to the public hospitals are high on the accounts receivable structure and its payments are delayed sometimes over six months. Accounts payables of same hospitals continue to increase to points of threatening service delivery from such facilities. The study analysis the relationship between debts of NHIS to hospitals by way of proportion of the debt, accounts receivable balances and accounts receivable periods of NHIS debts; on the accounts payable balances and accounts payable periods and realises that, the NHIS debt settlements by way of amounts, its period of days of payment and its structure affects hospitals ability settling its payables in amounts and on time, thus affecting the delivery of quality health service.
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Natural Resources, Conflict and Growth: Uncovering the Transmission Mechanism
Using panel data and GMM estimators for the developed countries (DCs) and the less developed countries (LDCs) we find a positive and significant impact of conflict on DC GDP and a negative and significant impact on LDC GDP during the period 1980-2009. Our result on conflict is robust irrespective of model specification and country categorization. Both fuel and ores and minerals have a positive and significant impact on GDP in the LDCs in some specifications contradicting the predominant ?resource curse? view. While openness has a negative and significant impact on GDP in the LDCs. Government expenditure has a negative and significant impact in DCs in one specification, which is an interesting finding in view of the social expenditure reductions in the DCs post 9/11. The use of panel data ensures that non-stationarity of the variables is not a problem and the use of GMM estimators yields estimates that are not biased on account of endogeneity.
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