The present study empirically investigates the relevance of the various specifications of relative Income hypothesis (RIH) in the case of Pakistan. World Development Indicators’ data is analyzed over the period of 1986 to 2016. This study tests the existence of income, consumption, and habit ratchet effects at the National level. Based on stationarity tests the techniques of Box Jenkin, Two Stage Least Square, Generalized Methods of Moments, and Limited Information Maximum Likelihood Method are utilized to estimate the four versions of relative income hypothesis. Findings of this research validate the significant prevalence of three types of ratchet effects in case of Pakistan. In Duesenberry-Eckstein-Formm (DEF) model, habit ratchet effect is found to be stronger than income ratchet effect. Whereas in modified Davis model Consumption ratchet effect exceeds the habit ratchet effect. It is observed that long run marginal propensities to consume are closer to one which demonstrates smooth consumption behavior over long period in Pakistan. The estimated short run marginal propensities to consume are observed to be less than long run marginal propensities to consume that accords with the existing consumption theory. These findings imply that all ratchet effects put pressure upon consumers to maintain the highest standard of living enjoyed in the past. In this process households do not retain balance between savings and consumption. Based on these findings, it is suggested to consider the impact of societal factor in formulating policies to shape the consumption patterns.
本研究在巴基斯坦的情况下实证调查了相对收入假设(RIH)的各种规格的相关性。《世界发展指标》的数据分析时间为1986年至2016年。本研究在国家层面上检验了收入、消费和习惯棘轮效应的存在。在平稳性检验的基础上，利用Box Jenkin、两阶段最小二乘法、广义矩量法和有限信息极大似然法对四种版本的相对收入假设进行了估计。本研究的结果证实了三种棘轮效应在巴基斯坦的显著流行。在duesenberry - eckstein - form (DEF)模型中，发现习惯棘轮效应强于收入棘轮效应。而在修正的Davis模型中，消费棘轮效应超过习惯棘轮效应。可以观察到，长期边际消费倾向更接近于巴基斯坦长期平稳消费行为。根据现有的消费理论，观察到估计的短期边际消费倾向小于长期边际消费倾向。这些发现表明，所有棘轮效应都给消费者施加了压力，要求他们维持过去享有的最高生活水平。在这个过程中，家庭没有保持储蓄和消费之间的平衡。在此基础上，建议在制定政策以塑造消费模式时考虑社会因素的影响。
{"title":"An Empirical Examination of Relative Income Hypothesis: Evidence from Pakistan","authors":"Mehr u Nisa Ishtiaq, Tahira Tauheed, Isma Ishtiaq","doi":"10.22547/ber/13.1.1","DOIUrl":"https://doi.org/10.22547/ber/13.1.1","url":null,"abstract":"The present study empirically investigates the relevance of the various specifications of relative Income hypothesis (RIH) in the case of Pakistan. World Development Indicators’ data is analyzed over the period of 1986 to 2016. This study tests the existence of income, consumption, and habit ratchet effects at the National level. Based on stationarity tests the techniques of Box Jenkin, Two Stage Least Square, Generalized Methods of Moments, and Limited Information Maximum Likelihood Method are utilized to estimate the four versions of relative income hypothesis. Findings of this research validate the significant prevalence of three types of ratchet effects in case of Pakistan. In Duesenberry-Eckstein-Formm (DEF) model, habit ratchet effect is found to be stronger than income ratchet effect. Whereas in modified Davis model Consumption ratchet effect exceeds the habit ratchet effect. It is observed that long run marginal propensities to consume are closer to one which demonstrates smooth consumption behavior over long period in Pakistan. The estimated short run marginal propensities to consume are observed to be less than long run marginal propensities to consume that accords with the existing consumption theory. These findings imply that all ratchet effects put pressure upon consumers to maintain the highest standard of living enjoyed in the past. In this process households do not retain balance between savings and consumption. Based on these findings, it is suggested to consider the impact of societal factor in formulating policies to shape the consumption patterns.","PeriodicalId":80398,"journal":{"name":"Akron business and economic review","volume":"83 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80066890","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study aims to examine and explore the risk management practices with respect to Rate of Return Risk (RORR) and Equity Investment Risk (EIR) in the Islamic Banking Institutions (IBIs) of Pakistan through a systematic model which is called System Dynamic Model (SDM) by using system thinking methodology. This study has been conducted in three sequential phases to develop the qualitative System Dynamic Model for Rate of Return Risk Management and Equity Investment Risk Management. Firstly, the researchers developed preliminary Causal Loop Diagrams (CLD) based on the initial understanding achieved from the causal interconnections between various RORR and EIR characters through extensive literature review. Secondly, the researchers conducted semi-structured interviews with the experts to ratify, endorse and refine the initial CLD. Lastly, the data collected through interviews was analyzed to develop the final refined qualitative SDM. The study's findings indicate that the identification and measurement of the RORR and EIR in IBIs in Pakistan need to be strengthened by developing appropriate methodology. Moreover, the practices adopted by these financial institutions to mitigate and control the exposures of RORR and EIR are good and effective. This Qualitative SDM provides practical, constructive and productive understanding to the managers, policy-makers, regulators, shareholders and scholars regarding the RORR and EIR management mechanism of IBIs of Pakistan.
{"title":"Managing Equity Investment Risk and Rate of Return Risk in Islamic Banking: A System Thinking Approach","authors":"M. Farhan, Hassan Mobeen Alam, S. Jabeen","doi":"10.22547/ber/13.1.3","DOIUrl":"https://doi.org/10.22547/ber/13.1.3","url":null,"abstract":"This study aims to examine and explore the risk management practices with respect to Rate of Return Risk (RORR) and Equity Investment Risk (EIR) in the Islamic Banking Institutions (IBIs) of Pakistan through a systematic model which is called System Dynamic Model (SDM) by using system thinking methodology. This study has been conducted in three sequential phases to develop the qualitative System Dynamic Model for Rate of Return Risk Management and Equity Investment Risk Management. Firstly, the researchers developed preliminary Causal Loop Diagrams (CLD) based on the initial understanding achieved from the causal interconnections between various RORR and EIR characters through extensive literature review. Secondly, the researchers conducted semi-structured interviews with the experts to ratify, endorse and refine the initial CLD. Lastly, the data collected through interviews was analyzed to develop the final refined qualitative SDM. The study's findings indicate that the identification and measurement of the RORR and EIR in IBIs in Pakistan need to be strengthened by developing appropriate methodology. Moreover, the practices adopted by these financial institutions to mitigate and control the exposures of RORR and EIR are good and effective. This Qualitative SDM provides practical, constructive and productive understanding to the managers, policy-makers, regulators, shareholders and scholars regarding the RORR and EIR management mechanism of IBIs of Pakistan.","PeriodicalId":80398,"journal":{"name":"Akron business and economic review","volume":"125 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72455609","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Muhammad Danish Habib, Hassan Jalil Shah, A. Qayyum
Energy conservation is an economic, social, and environmental issue that offers various academic, practical, and policy implications. The growing magnitude, complexity, and relevance of energy wastage have attracted the attention of scholars and practitioners. There is a lack of consumer awareness towards electricity conservation practices of household consumers in the context of developing countries. This research utilized the theory of planned behavior to explain sustainable behavioral intentions in the context of electricity conservation. This research aims to measure the effect of beliefs, values, and attitudes on sustainable behavioral intentions in the energy conservation context. This research hypothesized awareness, compatibility, perceived value, resistance to change, and actual gain as predictors of attitude towards energy conservation and sustainable behavioral intentions. Using survey methodology, purposive sampling techniques were used to collect the data from young household consumers. Data of 246 electricity consumers of Pakistan were analyzed using confirmatory factor analysis (CFA) and structural equation modeling (SEM). Results of the study validate a significant relationship between attitude towards energy conservation and sustainable behavioral intentions. Based on results, it has been established that the amount of actual gain intentions and awareness are the main contributors to attitude towards energy conservation and sustainable behavioral intention. Compatibility and resistance to change were also significant precipitators of attitude towards energy conservation and sustainable behavioral intention. Perceived value was found a significant predictor of attitude towards energy conservation while insignificant towards sustainable behavioral intention. The study findings have a significant impact on government, policymakers, marketers, and academics interested in developing strategies to mitigate the effects of energy wastage. Prevention of resource wastage depends upon the awareness and consumption practices of the customers.
{"title":"Analyzing the role of values, beliefs and attitude in developing sustainable behavioral intentions: empirical evidence from electric power industry","authors":"Muhammad Danish Habib, Hassan Jalil Shah, A. Qayyum","doi":"10.22547/ber/13.1.2","DOIUrl":"https://doi.org/10.22547/ber/13.1.2","url":null,"abstract":"Energy conservation is an economic, social, and environmental issue that offers various academic, practical, and policy implications. The growing magnitude, complexity, and relevance of energy wastage have attracted the attention of scholars and practitioners. There is a lack of consumer awareness towards electricity conservation practices of household consumers in the context of developing countries. This research utilized the theory of planned behavior to explain sustainable behavioral intentions in the context of electricity conservation. This research aims to measure the effect of beliefs, values, and attitudes on sustainable behavioral intentions in the energy conservation context. This research hypothesized awareness, compatibility, perceived value, resistance to change, and actual gain as predictors of attitude towards energy conservation and sustainable behavioral intentions. Using survey methodology, purposive sampling techniques were used to collect the data from young household consumers. Data of 246 electricity consumers of Pakistan were analyzed using confirmatory factor analysis (CFA) and structural equation modeling (SEM). Results of the study validate a significant relationship between attitude towards energy conservation and sustainable behavioral intentions. Based on results, it has been established that the amount of actual gain intentions and awareness are the main contributors to attitude towards energy conservation and sustainable behavioral intention. Compatibility and resistance to change were also significant precipitators of attitude towards energy conservation and sustainable behavioral intention. Perceived value was found a significant predictor of attitude towards energy conservation while insignificant towards sustainable behavioral intention. The study findings have a significant impact on government, policymakers, marketers, and academics interested in developing strategies to mitigate the effects of energy wastage. Prevention of resource wastage depends upon the awareness and consumption practices of the customers.","PeriodicalId":80398,"journal":{"name":"Akron business and economic review","volume":"40 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77752512","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
There is a paucity of scholarship about what to anticipate in the course of a Ph.D. program, the emotional toll, and embodied experience of a Ph.D. candidate — research that unveils the innards of Ph.D. experiences, predominantly female academics and is more upfront about it is much lacking. A “reflexive narrative approach” combined with a feminist outlook, using memory as a data source has been used to station an understanding of experience into a broader array of literature. By this, the author explores the meaning of her doctoral journey. The author details and describes her experience, thoughts, and struggles with the self and others during this journey. Through this process, the author gains tenor, reckoning, and a better sense of direction for the future.
{"title":"Account of a female Pakistani Ph.D. scholar: An Autoethnographic exploration","authors":"Maimoona Saleem","doi":"10.22547/ber/13.1.4","DOIUrl":"https://doi.org/10.22547/ber/13.1.4","url":null,"abstract":"There is a paucity of scholarship about what to anticipate in the course of a Ph.D. program, the emotional toll, and embodied experience of a Ph.D. candidate — research that unveils the innards of Ph.D. experiences, predominantly female academics and is more upfront about it is much lacking. A “reflexive narrative approach” combined with a feminist outlook, using memory as a data source has been used to station an understanding of experience into a broader array of literature. By this, the author explores the meaning of her doctoral journey. The author details and describes her experience, thoughts, and struggles with the self and others during this journey. Through this process, the author gains tenor, reckoning, and a better sense of direction for the future.","PeriodicalId":80398,"journal":{"name":"Akron business and economic review","volume":"69 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79897292","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper evaluates the forecasting performance of linear and non-linear time series models of some macroeconomic variables viz a viz the forecasts outlook of these variables generated by professionals in international economic organizations i.e. the International Monetary Fund (IMF) and the Organization of Economic Cooperation and Development (OECD). Many time series and econometrics models are used to forecast financial and macroeconomic variables. The accuracy of such forecasts depends crucially on careful handling of nonlinearity present in the time series. The debate of forecasting ability of linear vs nonlinear models is far from settled. These models use the past patterns of the economic time series to infer the parameters of the underlying stochastic process and use them to make forecasts. In doing so these models use only the information contained in the past data. However the economists working in professional international economic organizations not only look at the past trends but use the condition of local and global economy prevailing at the time and expected future path of economies as well as their professional expertise and judgment to arrive at forecasts of macroeconomic variables. However the specific underlying models and methodology used by the economists generating these forecast is usually not communicated to the public. In comparison to the forecasts of these organizations the time series models are well developed and accessible to researchers working anywhere around the globe. Thus it is an interesting task to compare the foresting ability of linear and nonlinear time series models. This paper aims at comparing the forecasts from these models to assess how well they compete with forecasts generated from the professional economists employed by international economic organizations. The nonlinear models employed in this study are quite well known namely the Self Exciting Threshold Autoregressive (SETAR) model and the Markov Switching Autoregressive (MSAR) model. The linear models employed are the AR and ARMA models. The paper have used annual data of three macroeconomic time series variables GDP growth, consumer price inflation and exchange rate of G7 countries i.e. Canada, France, Germany, Italy, Japan, United Kingdom (UK) and United States of America (USA) as well as an emerging south Asian economy namely Pakistan. Three forecast accuracy criteria i.e. Root Mean Square Error (RMSE), Mean Absolute Error (MAE) and Mean Absolute Percentage Error (MAPE) are employed and the statistical significance of difference in forecasts is assessed using the Diebold-Mariono test. The results show that the forecasting ability of nonlinear Regime Switching models SETAR and MSAR is superior to the linear models. Further, although the point forecasts of linear and nonlinear models are not superior to that of economic organizations but in more than 60 percent of the cases considered the forecasting accuracy of two sets of forecast is not stat
{"title":"How well do linear and nonlinear time series models’ forecasts compete with international economic organizations?","authors":"Tayyab Raza Fraz, J. Iqbal, Mudassir Uddin","doi":"10.22547/ber/12.3.2","DOIUrl":"https://doi.org/10.22547/ber/12.3.2","url":null,"abstract":"This paper evaluates the forecasting performance of linear and non-linear time series models of some macroeconomic variables viz a viz the forecasts outlook of these variables generated by professionals in international economic organizations i.e. the International Monetary Fund (IMF) and the Organization of Economic Cooperation and Development (OECD). Many time series and econometrics models are used to forecast financial and macroeconomic variables. The accuracy of such forecasts depends crucially on careful handling of nonlinearity present in the time series. The debate of forecasting ability of linear vs nonlinear models is far from settled. These models use the past patterns of the economic time series to infer the parameters of the underlying stochastic process and use them to make forecasts. In doing so these models use only the information contained in the past data. However the economists working in professional international economic organizations not only look at the past trends but use the condition of local and global economy prevailing at the time and expected future path of economies as well as their professional expertise and judgment to arrive at forecasts of macroeconomic variables. However the specific underlying models and methodology used by the economists generating these forecast is usually not communicated to the public. In comparison to the forecasts of these organizations the time series models are well developed and accessible to researchers working anywhere around the globe. Thus it is an interesting task to compare the foresting ability of linear and nonlinear time series models. This paper aims at comparing the forecasts from these models to assess how well they compete with forecasts generated from the professional economists employed by international economic organizations. The nonlinear models employed in this study are quite well known namely the Self Exciting Threshold Autoregressive (SETAR) model and the Markov Switching Autoregressive (MSAR) model. The linear models employed are the AR and ARMA models. The paper have used annual data of three macroeconomic time series variables GDP growth, consumer price inflation and exchange rate of G7 countries i.e. Canada, France, Germany, Italy, Japan, United Kingdom (UK) and United States of America (USA) as well as an emerging south Asian economy namely Pakistan. Three forecast accuracy criteria i.e. Root Mean Square Error (RMSE), Mean Absolute Error (MAE) and Mean Absolute Percentage Error (MAPE) are employed and the statistical significance of difference in forecasts is assessed using the Diebold-Mariono test. The results show that the forecasting ability of nonlinear Regime Switching models SETAR and MSAR is superior to the linear models. Further, although the point forecasts of linear and nonlinear models are not superior to that of economic organizations but in more than 60 percent of the cases considered the forecasting accuracy of two sets of forecast is not stat","PeriodicalId":80398,"journal":{"name":"Akron business and economic review","volume":"3 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-09-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85399438","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The study constructs market sentiment index over the period from August 2009 to June 2019 and examines the causality between market sentiment and returns for conventional and Islamic stocks in Pakistan. Using the firm-level data for all stocks listed on Pakistan Stock Exchange, market sentiment index is constructed as the first principal component of six variables: advances-to-decline, premium on dividends, price-to-earnings, relative strength, money flow and turnover rate. We employ the Vector auto-regression model to examine the two-way causal relationship between investor sentiment and aggregate stock return. Our results show that market sentiment has strong predictive power for subsequent conventional stock returns. Sentiment based trading actions of the investors cause persistence in conventional stock returns for one month; however, as these stocks become overpriced, the price movement reverses in two months’ time. In contrast, we do not find any significant association between market sentiment and Islamic stock returns. Our findings are suggestive of different dynamics and investor behavior in Islamic financial markets of Pakistan and along with the existing literature documenting Islamic stocks performance to be at least as good as the conventional stock can be a comfort to the Muslim Investors and may serve as the catalyst to stimulate the growth of Islamic equities.
{"title":"Sentiment and Stock Returns: A Case for Conventional and Islamic equities in Pakistan","authors":"Sana Tauseef","doi":"10.22547/ber/12.3.1","DOIUrl":"https://doi.org/10.22547/ber/12.3.1","url":null,"abstract":"The study constructs market sentiment index over the period from August 2009 to June 2019 and examines the causality between market sentiment and returns for conventional and Islamic stocks in Pakistan. Using the firm-level data for all stocks listed on Pakistan Stock Exchange, market sentiment index is constructed as the first principal component of six variables: advances-to-decline, premium on dividends, price-to-earnings, relative strength, money flow and turnover rate. We employ the Vector auto-regression model to examine the two-way causal relationship between investor sentiment and aggregate stock return. Our results show that market sentiment has strong predictive power for subsequent conventional stock returns. Sentiment based trading actions of the investors cause persistence in conventional stock returns for one month; however, as these stocks become overpriced, the price movement reverses in two months’ time. In contrast, we do not find any significant association between market sentiment and Islamic stock returns. Our findings are suggestive of different dynamics and investor behavior in Islamic financial markets of Pakistan and along with the existing literature documenting Islamic stocks performance to be at least as good as the conventional stock can be a comfort to the Muslim Investors and may serve as the catalyst to stimulate the growth of Islamic equities.","PeriodicalId":80398,"journal":{"name":"Akron business and economic review","volume":"56 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-09-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90904761","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Modern organization theory suggests that external environment is central to the organizational phenomena. Similarly, sensemaking is widely used to describe organizational actors and processes. Despite this significance of both constructs and their suggested interwoven occurrence in organizational landscape, sensemaking processes in the face of different types of organizational environments have not been studied. This paper furnishes a framework to describe which forms of sensemaking are useful in various types of organizational environment. At first, based on review of literature, we synthesized that sensemaking is a multifaceted process; which is retrospective as well perspective and continues as well as episodic. Moreover, it involves both individual and social cognition, and hence becomes individual as well organizational process. Subsequently, we have presented propositions regarding sensemaking processes in the face of simple, complex, dynamic and stable environments.
{"title":"Making Sense of Sensemaking Process In the Face of Organizational Environment","authors":"Sami Ullah Bajwa, A. Waseem, Ahmad Ahsan Akbar","doi":"10.22547/ber/12.3.4","DOIUrl":"https://doi.org/10.22547/ber/12.3.4","url":null,"abstract":"Modern organization theory suggests that external environment is central to the organizational phenomena. Similarly, sensemaking is widely used to describe organizational actors and processes. Despite this significance of both constructs and their suggested interwoven occurrence in organizational landscape, sensemaking processes in the face of different types of organizational environments have not been studied. This paper furnishes a framework to describe which forms of sensemaking are useful in various types of organizational environment. At first, based on review of literature, we synthesized that sensemaking is a multifaceted process; which is retrospective as well perspective and continues as well as episodic. Moreover, it involves both individual and social cognition, and hence becomes individual as well organizational process. Subsequently, we have presented propositions regarding sensemaking processes in the face of simple, complex, dynamic and stable environments.","PeriodicalId":80398,"journal":{"name":"Akron business and economic review","volume":"12 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-09-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78877513","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
An enhancement in the financial depth (FD) increases the availability of formal credit to firms. Resultantly credit redistribution (CR) by firms is likely to be reduced as they require less trade credit (TC). To provide evidence, how do managers respond to changes in financial depth while making adjustments in their trade credit policy, this paper aims to study the impact of financial depth on credit redistribution by listed manufacturing firms (LMFs). For the firm-level variables, we used a data set of 327 firms listed on PSX for the period 2005 to 2018. Private credit to GDP ratio and market capitalization to GDP ratio are used as proxies for financial depth. Unlike earlier studies, we applied a two-step System GMM estimator to control the endogeneity. The results of the regression analysis display a positive relationship between the use and the supply of trade credit by LMFs. It reveals that LMFs redistribute credit to their customers through trade credit channel. We found a significant and negative impact of FD on the supply of TC by LMFs. Further, we established that financial depth as a moderator has a buffering impact on the credit redistribution by listed firms. The study highlights the moderating role of FD and suggests the financial policymakers of firms to modify their credit policies in response to changes in financial depth. For future research, we suggest the investigation of the effect of financial policy interventions on credit redistribution by small and non-listed firms.
{"title":"Credit Redistribution by Listed Manufacturing Firms in Pakistan and the Moderating Role of Financial Depth","authors":"N. Ahmad, B. Nafees, Abdul Rasheed","doi":"10.22547/ber/12.4.1","DOIUrl":"https://doi.org/10.22547/ber/12.4.1","url":null,"abstract":"An enhancement in the financial depth (FD) increases the availability of formal credit to firms. Resultantly credit redistribution (CR) by firms is likely to be reduced as they require less trade credit (TC). To provide evidence, how do managers respond to changes in financial depth while making adjustments in their trade credit policy, this paper aims to study the impact of financial depth on credit redistribution by listed manufacturing firms (LMFs). For the firm-level variables, we used a data set of 327 firms listed on PSX for the period 2005 to 2018. Private credit to GDP ratio and market capitalization to GDP ratio are used as proxies for financial depth. Unlike earlier studies, we applied a two-step System GMM estimator to control the endogeneity. The results of the regression analysis display a positive relationship between the use and the supply of trade credit by LMFs. It reveals that LMFs redistribute credit to their customers through trade credit channel. We found a significant and negative impact of FD on the supply of TC by LMFs. Further, we established that financial depth as a moderator has a buffering impact on the credit redistribution by listed firms. The study highlights the moderating role of FD and suggests the financial policymakers of firms to modify their credit policies in response to changes in financial depth. For future research, we suggest the investigation of the effect of financial policy interventions on credit redistribution by small and non-listed firms.","PeriodicalId":80398,"journal":{"name":"Akron business and economic review","volume":"37 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-09-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79103351","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study examines the dynamic nature of return spillover across Bitcoins indices and foreign exchange pairs denominated in 6 major trading currencies. The findings of spillover index, Spillover Asymmetry Measure (SAM) and frequency connectedness methodologies indicate that return spillover across Bitcoin markets and foreign exchange pairs dominated in six major trading currencies is very low. The intra-market return spillover for the Bitcoin markets and foreign exchange pairs is found to be significant. Presence of asymmetry in the return spillover is also found. Evidence indicates that return spillover are dominated in short horizon, with significant spillover occurring within 4 days of an event. The low integration of Bitcoin markets with the foreign exchange markets provide significant implication for portfolio diversification and risk minimization.
{"title":"Return spillover across Bitcoin markets and foreign exchange pairs dominated in major trading currencies","authors":"Muhammad Owais Qarni, S. Gulzar","doi":"10.22547/ber/12.3.5","DOIUrl":"https://doi.org/10.22547/ber/12.3.5","url":null,"abstract":"This study examines the dynamic nature of return spillover across Bitcoins indices and foreign exchange pairs denominated in 6 major trading currencies. The findings of spillover index, Spillover Asymmetry Measure (SAM) and frequency connectedness methodologies indicate that return spillover across Bitcoin markets and foreign exchange pairs dominated in six major trading currencies is very low. The intra-market return spillover for the Bitcoin markets and foreign exchange pairs is found to be significant. Presence of asymmetry in the return spillover is also found. Evidence indicates that return spillover are dominated in short horizon, with significant spillover occurring within 4 days of an event. The low integration of Bitcoin markets with the foreign exchange markets provide significant implication for portfolio diversification and risk minimization.","PeriodicalId":80398,"journal":{"name":"Akron business and economic review","volume":"34 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-09-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82084438","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper aims to broaden the understanding why bottom of pyramid customers in Pakistan purchase non-essential items despite their financial constraints. Qualitative data was collected through in-depth interviews from a purposive sample of 14 respondents. NVivo 12 was used to analyze data. In the light of self-determination theory, this hermeneutic inquiry suggests that bottom of pyramid customers who are negatively stereotyped on account of their consumption inadequacy, have a specific need to improve self-worth. They struggle to engage in socially relevant consumption practices, to avoid social exclusion. Internet increases their awareness about products that they consider necessary for a minimal level of decent living. This digital influence transforms their consumer behavior. Since consumer culture does not adequately define what makes up a minimally decent living, bottom of pyramid customers will keep on aspiring products that they perceive as socially relevant for a better lifestyle. These reasons make ‘non-essential’ purchases extremely essential and relevant for bottom of pyramid customers. This practice is observed in more affluent people too, however, the sacrifices that bottom of pyramid customers make in order to fulfill their need for a more respectable social standing, are relatively more critical than the trade-off that more affluent people make among their choices. This research will enable marketers to understand value requirements of bottom of pyramid customers more deeply and create more precise value propositions.
{"title":"Essentiality of non-essential purchases for digitally influenced, bottom of pyramid customers","authors":"Fariha Reza, Huma Amir","doi":"10.22547/ber/12.4.4","DOIUrl":"https://doi.org/10.22547/ber/12.4.4","url":null,"abstract":"This paper aims to broaden the understanding why bottom of pyramid customers in Pakistan purchase non-essential items despite their financial constraints. Qualitative data was collected through in-depth interviews from a purposive sample of 14 respondents. NVivo 12 was used to analyze data. In the light of self-determination theory, this hermeneutic inquiry suggests that bottom of pyramid customers who are negatively stereotyped on account of their consumption inadequacy, have a specific need to improve self-worth. They struggle to engage in socially relevant consumption practices, to avoid social exclusion. Internet increases their awareness about products that they consider necessary for a minimal level of decent living. This digital influence transforms their consumer behavior. Since consumer culture does not adequately define what makes up a minimally decent living, bottom of pyramid customers will keep on aspiring products that they perceive as socially relevant for a better lifestyle. These reasons make ‘non-essential’ purchases extremely essential and relevant for bottom of pyramid customers. This practice is observed in more affluent people too, however, the sacrifices that bottom of pyramid customers make in order to fulfill their need for a more respectable social standing, are relatively more critical than the trade-off that more affluent people make among their choices. This research will enable marketers to understand value requirements of bottom of pyramid customers more deeply and create more precise value propositions.","PeriodicalId":80398,"journal":{"name":"Akron business and economic review","volume":"607 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-09-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78959586","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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