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No.3

Exports-Led Growth Hypothesis in Pakistan: Further Evidence


Pages: 182-197
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Muhammad Shahbaz, Pervaz Azim, Khalil Ahmad
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Muhammad Shahbaz, Pervaz Azim, Khalil Ahmad (2011). Exports-Led Growth Hypothesis in Pakistan: Further Evidence. Asian Economic and Financial Review, 1(3): 182-197. DOI:
The study considers the exports-led growth hypothesis using quarterly dataover the period 1990-2008 in case of Pakistan. For this purpose, Ng Perronunit root test, ARDL bounds testing approach to cointegration and errorcorrection method (ECM) for short run dynamics have been applied. Ourresults indicate that exports are positively correlated with economic growthconfirming the validity of exports-led growth hypothesis. Exchange ratedepreciation decreases and real capital stock improves economic growth.

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The Effect of Global Liquidity on Macroeconomic Parameters


Pages: 167-181
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The Effect of Global Liquidity on Macroeconomic Parameters

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Goknur Umutlu , Yılmaz Yıldız
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Goknur Umutlu , Yılmaz Yıldız(2011). The Effect of Global Liquidity on Macroeconomic Parameters. Asian Economic and Financial Review, 1(3): 167-181. DOI:

Depending on the international economic integration as a result of the increasing globalization, national economies have become more sensitive to the external economic developments. In such an environment, it is important to understand the concept of international liquidity and its effects. We analyze the effect of global liquidity on Turkish economy in this study. To examine the impact of global liquidation on Turkish economy empirically, Vector Autoregressive (VAR) model and cointegration tests are applied by using the data between 1990Q1-2008Q3 periods. Cointegration results indicate that global liquidation moves together with Turkey’s national income, inflation rate, treasury benchmark interest rate and real exchange rate in the long run. According to the results of Granger causality test, it is seen that there is causality from global liquidation towards Turkey’s key macroeconomic variables. The impact-response analysis of the VAR model figures out the increase in global liquidity leads an appreciation in Turkey’s real exchange rate, decreases national income, inflation and interest rates. The results of the variance decomposition confirms that the longer the period under review, the stronger the effect of global liquidation. Our findings in this study emphasize the importance of global integration and liquidity on Turkish economy which is articulated with the world economy.


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A Study On Individual Competencies-An Empirical Study


Pages: 156-166
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A Study On Individual Competencies-An Empirical Study

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B.Latha Lavanya
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B.Latha Lavanya(2011). A Study On Individual Competencies-An Empirical Study. Asian Economic and Financial Review, 1(3): 156-166. DOI:

Measuring the soft factors in economic terms is being challenged. Individual’s performances were described as competencies in order for them to performed, observed and assessed to obtain accreditation as competent. The study is restricted to IT companies in South India. The objective of this study is to do factor analysis and CFA for individual competencies. The questionnaires distributed to different companies were 300 of which 172 were received and only 151 questionnaires fulfilled the condition of the study. Factor analysis and Confirmatory factor analysis were done to provide a framework for a promising investigation in that field.


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Financial Management Of Imminent Business Prospect In Punjab


Pages: 151-155
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Financial Management Of Imminent Business Prospect In Punjab

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Puja Kaura
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Puja Kaura(2011). Financial Management Of Imminent Business Prospect In Punjab. Asian Economic and Financial Review, 1(3): 151-155. DOI:

A survey study was conducted to study the profitability index of apiculture enterprise in Pathankot, Gurdaspur district, Punjab. Data for period of a year (2009-9010) was collected by interviewing randomly selected 10 beekeepers from a sample survey. Profitability Index of apiculture was computed by including and excluding the revenue obtained from colony selling. 3% of beekeepers sold bee colonies for earning income which was very less. The study revealed that Profitability Indices of apiculture were 2.81 and 1.88 in the case of inclusion and exclusion of the income received from the colony selling, respectively. It showed that apiculture industry was running in profit in both cases. But in former case, the PI is higher than the latter case therefore in order to find that which investment option is better (Beekeeping with colony selling or not colony selling) the Payback Period technique of investment evaluation is used. The research findings showed that in former case the investment would take 0.35 years to pay back and in latter case it would take 0.53 years to payback the returns hence it was concluded that beekeeping with colony selling was better investment option and was a good source of income . Further, it is suggested that Govt. of Punjab should encourage the apiculture by providing timely loan facilities at reasonable interest rates, arranging training programmes which create the awareness of the latest techniques to farmers and how to keep the financial records so that they are able to assess which option will yield them higher and faster returns as this is cheapest and good source of income for rural people in Pathankot.


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Impact of Ownership Concentration on the operating Performance of Pakistani Firms


Pages: 147-150
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Impact of Ownership Concentration on the operating Performance of Pakistani Firms

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Waseem Anwar, Naila Tabassum
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Waseem Anwar, Naila Tabassum(2011). Impact of Ownership Concentration on the operating Performance of Pakistani Firms. Asian Economic and Financial Review, 1(3): 147-150. DOI:

This study investigates the Impact of Ownership Concentration on the operating performance of Pakistani firms. Sample of 50 non-financial firms is selected from KSE-100 index of Karachi Stock Exchange of Pakistan. Descriptive analysis shows that there is an immense level of ownership concentration in Pakistani firms. Regression analysis suggested that there is a significant positive correlation among ownership concentration and firm’s operating performance.


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Wage rate, regional trade bloc and Location of Foreign Direct Investment Decisions


Pages: 134-146
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Wage rate, regional trade bloc and Location of Foreign Direct Investment Decisions

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Onwuka, Kevin Odulukwe
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Onwuka, Kevin Odulukwe(2011). Wage rate, regional trade bloc and Location of Foreign Direct Investment Decisions. Asian Economic and Financial Review, 1(3): 134-146. DOI:

The objective of this paper is to examine the impact of wage rate on FDI location in South East Asia in the presence of trading systems (regional and multilateral trading systems) drawing example from panel data of five ASEAN countries (Malaysia, the Philippines, Indonesia, Singapore and Thailand). The analysis is built on the extended endogenous growth model due to work of Borensztein et al. (1998) and utilizes the fixed effects estimation technique to estimate the parameters of the model. Three measures were constructed for each trading system and used as regressors. The results show that the decisions to locate FDI in ASEAN countries are motivated by low wage rate or labour costs in the presence of both regional and multilateral trading systems. This implies that as the MNEs (Multinational Enterprises) aim at cost minimisation whether the host country is following multilateral or regional trading system makes no difference. Too for the host country to remain competitive in the global market and attract more MNEs, it has to compromise its labour standard. Or alternatively seek high-tech FDI that requires high skilled labour force.


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Unemployment and Property Crimes in Pakistan


Pages: 124-133
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Unemployment and Property Crimes in Pakistan

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Syed Yasir Mahmood Gillani, Rana Ejaz Ali Khan, Abid Rashid Gill
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Syed Yasir Mahmood Gillani, Rana Ejaz Ali Khan, Abid Rashid Gill(2011). Unemployment and Property Crimes in Pakistan. Asian Economic and Financial Review, 1(3): 124-133. DOI:

The study examines the relationship between unemployment and property crimes for Pakistan covering the period of 1975 to 2008. The Johansen cointegratiom methodology along with Granger causality through VEC is applied to the annual time series data. The results of the cointegration analysis provide evidence of a valid long-run relationship between unemployment and different kinds of property crimes. The results provide evidence of unidirectional causality running from unemployed to different kinds of property crimes. The causality results explain that unemployment Granger cause theft, dacoity, robbery and cattle theft while it does not cause burglary.


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The Corruption and the Quality of Auditing Standards


Pages: 120-123
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The Corruption and the Quality of Auditing Standards

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William R. DiPietro
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William R. DiPietro(2011). The Corruption and the Quality of Auditing Standards. Asian Economic and Financial Review, 1(3): 120-123. DOI:

The paper uses cross country regression analysis on a data set consisting of one hundred thirty countries for the year 2008 to test whether better auditing standards lead to lower levels of corruption. The results are consistent with the hypothesis that improved auditing standards reduce corruption.


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Trade Liberalization, Poverty and Inequality Nexus: A Case Study of India


Pages: 114-119
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Trade Liberalization, Poverty and Inequality Nexus: A Case Study of India

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Rana Ejaz Ali Khan, Nadia Bashir
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Rana Ejaz Ali Khan, Nadia Bashir(2011). Trade Liberalization, Poverty and Inequality Nexus: A Case Study of India. Asian Economic and Financial Review, 1(3): 114-119. DOI:

The paper attempted to see the relationship between trade liberalization and poverty and inequality in India. For trade liberalization, volume of trade as ratio of GDP, head count ratio for poverty and Gini-coefficient has been used for income inequality. The granger causality technique is applied to time series data for the years 1970-2009. The results indicate that trade has no significant effect on poverty and poverty has no effect on trade. However, trade has increased inequality in the short-run and inequality affected the trade in the long-run negatively. It partially contradicts the prediction of the Stolper- Samuelson theorem.


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Public Expenditure And Economic Growth In Nigeria


Pages: 104-113
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Public Expenditure And Economic Growth In Nigeria

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Usman A, Mobolaji. H. I, Kilishi A. A, Yaru M. A, Yakubu, T. A.
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Usman A, Mobolaji. H. I, Kilishi A. A, Yaru M. A, Yakubu, T. A.(2011). Public Expenditure And Economic Growth In Nigeria. Asian Economic and Financial Review, 1(3): 104-113. DOI:

The debate on the use of fiscal policy for economic stabilization and inducement of economic growth is an old one. Key issue in this debate relates to the efficacy of public expenditure on stimulating economic growth. The neo-classical school held on extreme position by refuting the usage of fiscal policy to regulate the economy even in the time of economic crisis. At the other extreme are those who emphasize the efficiency of fiscal policy in stabilizing economic fluctuations and stimulating growth. There is nearly a consensus on the short-run effects of fiscal policy on the economy. Fiscal policy can temporarily raise or lower national income or counteract macroeconomic disturbances that would otherwise influence national output. This paper contributes to this debate by investigating the effect of federal government expenditure on economic growth in Nigeria. An augmented Solow model is specified in Cobb-Douglas form with public capital as one of the factors. Public expenditure is used as proxy for public capital which is further decomposed by sectors. This helps us to investigate the impact of each sector on economic growth. The decomposition is in three expenditure streams: (i) expenditure on building human capital- public expenditure on education and health; (ii) expenditure on building infrastructure- public expenditure on transport and communication, and other social services; and (iii) expenditure on administration which is necessary for the functioning of government; A multivariate time series framework is used. Augmented Dickey- Fuller test indicated that two of the variables are stationary at first difference while other variables are stationary at levels. While Phillips Peron tests show that three are stationary at levels and others at first difference. Results of the regressions show that in the short run public spending has no impact on growth. However, Cointegration and VEC results show that there is long run relationship between public expenditure and growth.


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Effect of Workers’ Remittances on Private Savings Behavior in Pakistan


Pages: 95-103
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Effect of Workers’ Remittances on Private Savings Behavior in Pakistan

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Rahila Munir, Maqbool H. Sial, Ghulam Sarwar, Samina Shaheen
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Rahila Munir, Maqbool H. Sial, Ghulam Sarwar, Samina Shaheen(2011). Effect of Workers’ Remittances on Private Savings Behavior in Pakistan. Asian Economic and Financial Review, 1(3): 95-103. DOI:

The study empirically examined the macroeconomic impact of remittances on private savings in Pakistan by applying the ARDL Bounds Testing Approach of co integration by using annual time series data for 1973-2007.It also analyzes the effectiveness of remittances and foreign direct investment in promoting savings. The results reveal that worker remittances positively affect the private savings in Pakistan in the long run and in the short run. So remittances are not only spent on basic consumption needs, but are also either saved or invested. But the effect of foreign direct investment on private savings is negative because it is not directly reached the poor households.


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