Pub Date : 2022-06-16DOI: 10.1177/00194662221104753
P. K. Naik, Tapas Kumar Sethy
This paper aims at investigating the effect of stock returns on trading volume and the trading volume on volatility. To accomplish the study objective, daily data from 1 April 2014 to 30 June 2020 are used. The GLS model is employed to investigate the contemporaneous relationship between the stock returns and trading volume. The EGARCH (1, 1) model is used to explore the volume–volatility relationships, and the causal relationship of stock returns–trading volumes–volatility is attained through the Granger causality test. The study finds that the effect of stock returns on trading volume is asymmetric. It indicates that the negative price changes have a less considerable impact on trading volume than the non-negative price changes. The study also supports the mixture of the distribution hypothesis that postulated the volume–volatility relationship to be positive. The volatility persistence level remains high, even after the conditional volatility model incorporates trading volumes as an exogenous variable. Further, the analysis also reveals that stock return causes trading volume and not vice versa; however, trading volumes cause return volatility. JEL Codes: G10, G12, C22
{"title":"Stock Returns, Trading Volumes and Market Volatility: A Study on the Indian Stock Market","authors":"P. K. Naik, Tapas Kumar Sethy","doi":"10.1177/00194662221104753","DOIUrl":"https://doi.org/10.1177/00194662221104753","url":null,"abstract":"This paper aims at investigating the effect of stock returns on trading volume and the trading volume on volatility. To accomplish the study objective, daily data from 1 April 2014 to 30 June 2020 are used. The GLS model is employed to investigate the contemporaneous relationship between the stock returns and trading volume. The EGARCH (1, 1) model is used to explore the volume–volatility relationships, and the causal relationship of stock returns–trading volumes–volatility is attained through the Granger causality test. The study finds that the effect of stock returns on trading volume is asymmetric. It indicates that the negative price changes have a less considerable impact on trading volume than the non-negative price changes. The study also supports the mixture of the distribution hypothesis that postulated the volume–volatility relationship to be positive. The volatility persistence level remains high, even after the conditional volatility model incorporates trading volumes as an exogenous variable. Further, the analysis also reveals that stock return causes trading volume and not vice versa; however, trading volumes cause return volatility. JEL Codes: G10, G12, C22","PeriodicalId":85705,"journal":{"name":"The Indian economic journal : the quarterly journal of the Indian Economic Association","volume":"70 1","pages":"406 - 416"},"PeriodicalIF":0.0,"publicationDate":"2022-06-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"64818112","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}
Pub Date : 2022-06-15DOI: 10.1177/00194662221104762
Purna Banerjee, Rajmal
In recent years, India has become one of the select few emerging economies to feature in the list of the world’s top services exporters. However, given similarities in demography, resource endowments and comparable shares in world services exports, India faces potential competition from China in this sector. Using a theoretically founded, regression-based measure of revealed comparative advantage, we contrast India’s revealed comparative advantage vis-à-vis China in disaggregated services sectors between 2005 and 2018. India, we find, has a comparative advantage in sectors, such as ‘telecommunications, computer, and information services’ and ‘other business services’. However, China’s advantage lies in ‘manufacturing services’ and ‘transport’. Notably, the sectors of India’s comparative advantage are also the sunrise sectors within services, displaying high growth rates and an increasing share in world services trade. A related measure—the trade elasticity index—reveals that, due to sectoral differences in comparative advantage, China does not pose a major threat to India in most of the latter’s major export destinations. Our finding implies that even if China were to enter free trade agreements with India’s major services export partners, the trade diversion losses for India would be small. JEL Codes: F11, F14
{"title":"Revealed Comparative Advantage in Services Exports: How Is India Different from China?","authors":"Purna Banerjee, Rajmal","doi":"10.1177/00194662221104762","DOIUrl":"https://doi.org/10.1177/00194662221104762","url":null,"abstract":"In recent years, India has become one of the select few emerging economies to feature in the list of the world’s top services exporters. However, given similarities in demography, resource endowments and comparable shares in world services exports, India faces potential competition from China in this sector. Using a theoretically founded, regression-based measure of revealed comparative advantage, we contrast India’s revealed comparative advantage vis-à-vis China in disaggregated services sectors between 2005 and 2018. India, we find, has a comparative advantage in sectors, such as ‘telecommunications, computer, and information services’ and ‘other business services’. However, China’s advantage lies in ‘manufacturing services’ and ‘transport’. Notably, the sectors of India’s comparative advantage are also the sunrise sectors within services, displaying high growth rates and an increasing share in world services trade. A related measure—the trade elasticity index—reveals that, due to sectoral differences in comparative advantage, China does not pose a major threat to India in most of the latter’s major export destinations. Our finding implies that even if China were to enter free trade agreements with India’s major services export partners, the trade diversion losses for India would be small. JEL Codes: F11, F14","PeriodicalId":85705,"journal":{"name":"The Indian economic journal : the quarterly journal of the Indian Economic Association","volume":"70 1","pages":"417 - 436"},"PeriodicalIF":0.0,"publicationDate":"2022-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42750876","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}
Pub Date : 2022-06-15DOI: 10.1177/00194662221104752
Arindam Bandyopadhyay
This article empirically investigates the linkage of capital infusion in the Public Sector Banks (PSBs) in India with the capital adequacy, asset quality, profitability, operational efficiency and the market position of the banks. Utilising a balanced panel data of total 21 PSBs over 9 years (2009 to 2017), we analyse the key determinants of the Indian PSBs’ profitability, net interest margin (NIM), solvency and market efficiency. The study applies a two-step dynamic panel generalised methods of moments. We find empirical evidence that the Capital Infusion programme of the Government during 2008–2009 to 2016–2017 has significant impact on the performance of PSBs in India. We have observed that with frequent infusion of capital by the government, banks were able to meet the regulatory Basel II/III capital adequacy requirements and it has positive influence on their market capitalisation as well as NIM. However, capital infusion has an insignificant impact on improving return on assets (ROA) of banks. Our study suggests that a higher common equity tier 1 capital ratio leads to better market reputation and solvency position of the banks. The results of the study provides insight for bank management, regulators and policymakers for improving bank performance and better utilisation of scarce capital and public money. JEL Code: G21, G32, G34
{"title":"Bank Financial Performance and its Linkage with Capital: A Dynamic Panel Data Analysis of Public Sector Banks in India","authors":"Arindam Bandyopadhyay","doi":"10.1177/00194662221104752","DOIUrl":"https://doi.org/10.1177/00194662221104752","url":null,"abstract":"This article empirically investigates the linkage of capital infusion in the Public Sector Banks (PSBs) in India with the capital adequacy, asset quality, profitability, operational efficiency and the market position of the banks. Utilising a balanced panel data of total 21 PSBs over 9 years (2009 to 2017), we analyse the key determinants of the Indian PSBs’ profitability, net interest margin (NIM), solvency and market efficiency. The study applies a two-step dynamic panel generalised methods of moments. We find empirical evidence that the Capital Infusion programme of the Government during 2008–2009 to 2016–2017 has significant impact on the performance of PSBs in India. We have observed that with frequent infusion of capital by the government, banks were able to meet the regulatory Basel II/III capital adequacy requirements and it has positive influence on their market capitalisation as well as NIM. However, capital infusion has an insignificant impact on improving return on assets (ROA) of banks. Our study suggests that a higher common equity tier 1 capital ratio leads to better market reputation and solvency position of the banks. The results of the study provides insight for bank management, regulators and policymakers for improving bank performance and better utilisation of scarce capital and public money. JEL Code: G21, G32, G34","PeriodicalId":85705,"journal":{"name":"The Indian economic journal : the quarterly journal of the Indian Economic Association","volume":"70 1","pages":"437 - 451"},"PeriodicalIF":0.0,"publicationDate":"2022-06-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45886170","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}
Pub Date : 2022-06-08DOI: 10.1177/00194662221104751
S. Mukherjee, Shivani Badola
Due to the COVID-19 pandemic, public finance management (PFM) in the FY 2020–2021 and 2021–2022 have become extremely challenging. The economic contraction has created pressures on PFM in India in terms of lower revenue mobilisation and higher expenditure needs. Both the union and state governments are facing dual problem of arresting economic contraction and managing public finance with limited resources. The present article analyses public finance management of the union as well as 16 major Indian states during the time of COVID-19 pandemic. For comparison, we have also analysed pre-COVID public finance monthly data of state governments. The shock to PFM came from both the revenue as well as expenditure side. Apart from aggregate analysis of state finances of 16 major states, we present state-wise analysis to highlight measures adopted by states to deal with the unprecedented fiscal crisis. JEL Codes: H20, H61, H62, H63
{"title":"Public Finance Management in India in the Time of COVID-19 Pandemic","authors":"S. Mukherjee, Shivani Badola","doi":"10.1177/00194662221104751","DOIUrl":"https://doi.org/10.1177/00194662221104751","url":null,"abstract":"Due to the COVID-19 pandemic, public finance management (PFM) in the FY 2020–2021 and 2021–2022 have become extremely challenging. The economic contraction has created pressures on PFM in India in terms of lower revenue mobilisation and higher expenditure needs. Both the union and state governments are facing dual problem of arresting economic contraction and managing public finance with limited resources. The present article analyses public finance management of the union as well as 16 major Indian states during the time of COVID-19 pandemic. For comparison, we have also analysed pre-COVID public finance monthly data of state governments. The shock to PFM came from both the revenue as well as expenditure side. Apart from aggregate analysis of state finances of 16 major states, we present state-wise analysis to highlight measures adopted by states to deal with the unprecedented fiscal crisis. JEL Codes: H20, H61, H62, H63","PeriodicalId":85705,"journal":{"name":"The Indian economic journal : the quarterly journal of the Indian Economic Association","volume":"70 1","pages":"452 - 471"},"PeriodicalIF":0.0,"publicationDate":"2022-06-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43028306","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}
Pub Date : 2022-06-08DOI: 10.1177/00194662221104750
Amulya Gurtu, Jestin Johny, Rupal Chowdhary
The study analyses the effects of free trade agreements (FTAs) signed by India on the changes in the trade volumes of member states. The article analyses the benefits of the economic integration of export earnings to meet the import demands. It is found that FTAs improve economic activities among the signing countries. This article highlights the role of FTAs in the economic activities of countries signing the trade agreement. Post FTAs, the compound annual growth rate (CAGR) of exports increased and imports reduced. This research will help researchers identify the areas and countries where FTAs are desirable and help improve economic activities. JEL Codes: F15
{"title":"Effects of Free Trade Agreements on Trade Activities of Signatory Countries","authors":"Amulya Gurtu, Jestin Johny, Rupal Chowdhary","doi":"10.1177/00194662221104750","DOIUrl":"https://doi.org/10.1177/00194662221104750","url":null,"abstract":"The study analyses the effects of free trade agreements (FTAs) signed by India on the changes in the trade volumes of member states. The article analyses the benefits of the economic integration of export earnings to meet the import demands. It is found that FTAs improve economic activities among the signing countries. This article highlights the role of FTAs in the economic activities of countries signing the trade agreement. Post FTAs, the compound annual growth rate (CAGR) of exports increased and imports reduced. This research will help researchers identify the areas and countries where FTAs are desirable and help improve economic activities. JEL Codes: F15","PeriodicalId":85705,"journal":{"name":"The Indian economic journal : the quarterly journal of the Indian Economic Association","volume":"70 1","pages":"490 - 513"},"PeriodicalIF":0.0,"publicationDate":"2022-06-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48819850","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}
Pub Date : 2022-06-01Epub Date: 2022-03-04DOI: 10.1002/tcr.202200025
Naohiro Kameta
Supramolecular nanotubes produced by self-assembly of organic molecules can have unique structural features such as a one-dimensional morphology with no branching, distinguishable inner and outer surfaces and membrane walls, or a structure that is hollow and has a high aspect ratio. Incorporation of functional groups that respond to external chemical or physical stimuli into the constituent organic molecules of supramolecular nanotubes allows us to drastically change the structure of the nanotubes by applying such stimuli. This ability affords an array of controllable approaches for the encapsulation, storage, and release of guest compounds, which is expected to be useful in the fields of physics, chemistry, biology, and medicine. In this article, I review the supramolecular nanotubes developed by our group that exhibit morphological transformations in response to pH, chemical reaction, light, temperature, or moisture.
{"title":"Stimuli-Responsive Transformable Supramolecular Nanotubes.","authors":"Naohiro Kameta","doi":"10.1002/tcr.202200025","DOIUrl":"10.1002/tcr.202200025","url":null,"abstract":"<p><p>Supramolecular nanotubes produced by self-assembly of organic molecules can have unique structural features such as a one-dimensional morphology with no branching, distinguishable inner and outer surfaces and membrane walls, or a structure that is hollow and has a high aspect ratio. Incorporation of functional groups that respond to external chemical or physical stimuli into the constituent organic molecules of supramolecular nanotubes allows us to drastically change the structure of the nanotubes by applying such stimuli. This ability affords an array of controllable approaches for the encapsulation, storage, and release of guest compounds, which is expected to be useful in the fields of physics, chemistry, biology, and medicine. In this article, I review the supramolecular nanotubes developed by our group that exhibit morphological transformations in response to pH, chemical reaction, light, temperature, or moisture.</p>","PeriodicalId":85705,"journal":{"name":"The Indian economic journal : the quarterly journal of the Indian Economic Association","volume":"47 1","pages":"e202200025"},"PeriodicalIF":0.0,"publicationDate":"2022-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86869256","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}
Pub Date : 2022-04-21DOI: 10.1177/00194662221082202
A. Singh, Tripti Goel
Regulations are put in place in the capital markets to protect the interests of investors while promoting companies to actively participate in the capital markets. This multidisciplinary study concentrates on analysing the impact of one such regulation, based on entry norms, on the initial returns of book-built IPOs in the presence of firm-related and issue-related control variables, thereby facilitating decision-making to issuers and investors. Using various parametric and non-parametric tests on 259 IPOs issued on Indian Stock Exchanges during financial year 2009–2010 to 2019–2020, it can be concluded that Indian IPOs are underpriced on an average, irrespective of the entry norm followed. Further, firms entering through either of the entry routes, that is, profitability route or Qualified Institutional Buyer Route have significant differences in age, listing delay, type of sale, rank of lead managers and industry. Entry norm is established to have a negative yet insignificant role in determining the initial returns, while oversubscription is the only variable with a positive and significant impact on the initial returns of the issue. JEL Codes: G10, G14, G18, G23, K22
{"title":"Does Regulation Impact the Initial Returns of Initial Public Offerings? Evidence from Indian Capital Market","authors":"A. Singh, Tripti Goel","doi":"10.1177/00194662221082202","DOIUrl":"https://doi.org/10.1177/00194662221082202","url":null,"abstract":"Regulations are put in place in the capital markets to protect the interests of investors while promoting companies to actively participate in the capital markets. This multidisciplinary study concentrates on analysing the impact of one such regulation, based on entry norms, on the initial returns of book-built IPOs in the presence of firm-related and issue-related control variables, thereby facilitating decision-making to issuers and investors. Using various parametric and non-parametric tests on 259 IPOs issued on Indian Stock Exchanges during financial year 2009–2010 to 2019–2020, it can be concluded that Indian IPOs are underpriced on an average, irrespective of the entry norm followed. Further, firms entering through either of the entry routes, that is, profitability route or Qualified Institutional Buyer Route have significant differences in age, listing delay, type of sale, rank of lead managers and industry. Entry norm is established to have a negative yet insignificant role in determining the initial returns, while oversubscription is the only variable with a positive and significant impact on the initial returns of the issue. JEL Codes: G10, G14, G18, G23, K22","PeriodicalId":85705,"journal":{"name":"The Indian economic journal : the quarterly journal of the Indian Economic Association","volume":"70 1","pages":"313 - 330"},"PeriodicalIF":0.0,"publicationDate":"2022-04-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44850520","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}
Pub Date : 2022-03-15DOI: 10.1177/00194662221082216
R. Kumari
The unorganised manufacturing industries play a vital role in the process of industrial development of the Indian economy. Informal firms are relatively less productive than formal firms, because a majority of the firms are technically inefficient, producing far below the actual attainable level of production. This article examines differences in efficiency and output between formal and informal production firms across India’s manufacturing industries. The key novelty in this article is in studying both the formal and informal sectors simultaneously by applying the technique of Oaxaca–Blinder decomposition to determine efficiency differences across the sectors. The results suggest that capital is a positive and the most significant determinant of the output of efficient industries. Output gaps can be explained by coefficient, endowment and interaction aspects of capital and capital productivity, while efficiency differences are explained by coefficient and interaction characteristics of emoluments and capital productivity. The results of density plots show that informal firms are no longer functioning as a pool of surplus labour in the context of Indian manufacturing industries during these years. The results dispel the notion that the informal sector is a poor performer in terms of total output compared to the formal sector. Also, capital and capital productivity are less in informal manufacturing industries than in the formal sector. JEL Codes: E26, J46, O14, O17
{"title":"Differences in Efficiency in the Formal–Informal Dichotomy—A Study of Indian Firms","authors":"R. Kumari","doi":"10.1177/00194662221082216","DOIUrl":"https://doi.org/10.1177/00194662221082216","url":null,"abstract":"The unorganised manufacturing industries play a vital role in the process of industrial development of the Indian economy. Informal firms are relatively less productive than formal firms, because a majority of the firms are technically inefficient, producing far below the actual attainable level of production. This article examines differences in efficiency and output between formal and informal production firms across India’s manufacturing industries. The key novelty in this article is in studying both the formal and informal sectors simultaneously by applying the technique of Oaxaca–Blinder decomposition to determine efficiency differences across the sectors. The results suggest that capital is a positive and the most significant determinant of the output of efficient industries. Output gaps can be explained by coefficient, endowment and interaction aspects of capital and capital productivity, while efficiency differences are explained by coefficient and interaction characteristics of emoluments and capital productivity. The results of density plots show that informal firms are no longer functioning as a pool of surplus labour in the context of Indian manufacturing industries during these years. The results dispel the notion that the informal sector is a poor performer in terms of total output compared to the formal sector. Also, capital and capital productivity are less in informal manufacturing industries than in the formal sector. JEL Codes: E26, J46, O14, O17","PeriodicalId":85705,"journal":{"name":"The Indian economic journal : the quarterly journal of the Indian Economic Association","volume":"70 1","pages":"289 - 312"},"PeriodicalIF":0.0,"publicationDate":"2022-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45094123","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}
Pub Date : 2022-03-12DOI: 10.1177/00194662221082197
T. Saji
This research reinvestigates stock market linkages in Asian region by employing Johansen cointegration and vector error correction model (VECM) based causality tests. The stock price indexes of Japan, Singapore, South Korea, India and China are used, with monthly data over 1999:09–2019:10. The empirical results find weak price convergence among Asian markets, hence are almost segmented by national borders. The asymmetrical stock price relations in Asia have important implications for the pricing efficiency of national markets and suggest several opportunities for global investors to optimise returns through portfolio diversifications across leading stock markets of the region. JEL Codes: C58; G11; G15
{"title":"Revisit Financial Integration in Asia: New Time-Series Evidence from Stock Markets","authors":"T. Saji","doi":"10.1177/00194662221082197","DOIUrl":"https://doi.org/10.1177/00194662221082197","url":null,"abstract":"This research reinvestigates stock market linkages in Asian region by employing Johansen cointegration and vector error correction model (VECM) based causality tests. The stock price indexes of Japan, Singapore, South Korea, India and China are used, with monthly data over 1999:09–2019:10. The empirical results find weak price convergence among Asian markets, hence are almost segmented by national borders. The asymmetrical stock price relations in Asia have important implications for the pricing efficiency of national markets and suggest several opportunities for global investors to optimise returns through portfolio diversifications across leading stock markets of the region. JEL Codes: C58; G11; G15","PeriodicalId":85705,"journal":{"name":"The Indian economic journal : the quarterly journal of the Indian Economic Association","volume":"70 1","pages":"209 - 228"},"PeriodicalIF":0.0,"publicationDate":"2022-03-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48526844","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}
Pub Date : 2022-03-11DOI: 10.1177/00194662221082193
Mike A. Onodje, P. Onodje
The article investigates factors that may be responsible for observed instability in Nigeria’s manufacturing sector performance. Based on growing concerns regarding early deindustrialisation observed for many developing countries, the study examines how a menu of fiscal and monetary policies can be applied to revitalise the Nigerian manufacturing sector. Consequently, we construct an index of manufacturing sector instability and examine how it responds to a mixture of fiscal and monetary policy variables. We use annual time series data from 1981–2018 and apply the ARDL bounds test technique. Our findings show that budget deficits induce instability in the performance of the Nigerian manufacturing sector, while government infrastructural investments stabilise it. The monetary policy instruments were found to have inconsistent short-run and long-run influences but mostly conform with theory. JEL Codes: F63, L20, L25, L60, O10, O14
{"title":"Sources of Instability in Nigeria’s Manufacturing Performance: 1981–2018","authors":"Mike A. Onodje, P. Onodje","doi":"10.1177/00194662221082193","DOIUrl":"https://doi.org/10.1177/00194662221082193","url":null,"abstract":"The article investigates factors that may be responsible for observed instability in Nigeria’s manufacturing sector performance. Based on growing concerns regarding early deindustrialisation observed for many developing countries, the study examines how a menu of fiscal and monetary policies can be applied to revitalise the Nigerian manufacturing sector. Consequently, we construct an index of manufacturing sector instability and examine how it responds to a mixture of fiscal and monetary policy variables. We use annual time series data from 1981–2018 and apply the ARDL bounds test technique. Our findings show that budget deficits induce instability in the performance of the Nigerian manufacturing sector, while government infrastructural investments stabilise it. The monetary policy instruments were found to have inconsistent short-run and long-run influences but mostly conform with theory. JEL Codes: F63, L20, L25, L60, O10, O14","PeriodicalId":85705,"journal":{"name":"The Indian economic journal : the quarterly journal of the Indian Economic Association","volume":"70 1","pages":"271 - 288"},"PeriodicalIF":0.0,"publicationDate":"2022-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41507210","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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