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Emerging Trends in State Finances in India: 1995-96 to 2011-12
Issue:
Volume 1, Issue 6, December 2013
Pages:
258-265
Received:
3 August 2013
Published:
20 October 2013
Abstract: Sharp deterioration in state finance during the last decade has been a matter of serious concern to policy makers in India. The deterioration in State finance is largely an outcome of the fact that in the fact of a limited resource-base the states had to cope with a significant growth in their committed expenditure. Correcting the fiscal imbalances today is the single most important object of the new economic policy in India. The crucial issue therefore is to bring out improvement in State finance with a view to restructuring the expenditure in favour of development expenditure in order to enable a higher growth. The states took policy measures which helped them to avoid further worsening of their fiscal position to some extent. The Thirteenth Finance Commission has set a target of reducing fiscal deficit to 3% of GDP for States latest by 2014-15. The present study attempts to bring out the emerging trends in state finances of India in recent years.
Abstract: Sharp deterioration in state finance during the last decade has been a matter of serious concern to policy makers in India. The deterioration in State finance is largely an outcome of the fact that in the fact of a limited resource-base the states had to cope with a significant growth in their committed expenditure. Correcting the fiscal imbalances...
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Relationship between Domestic Debt, Macro-Economic Indices and Viability of the Construction Sector in Nigeria
Ademola Eyitope,
OJO,
Oluwaseyi Alabi,
AWODELE
Issue:
Volume 1, Issue 6, December 2013
Pages:
266-272
Received:
14 August 2013
Published:
20 October 2013
Abstract: This study aimed at establishing relationship between domestic debt, macroeconomic indices and the viability of the construction sector of Nigeria economy with a view to initiate empirical model for investor’s decision making. Archival data on monetary and fiscal macroeconomic indices such as unemployment rate; exchange rate; inflation rate; interest rate; domestic debt and the contribution of the construction sector to the GDP between years 2001-2011 were collected from Nigeria Bureau of Statistics (NBS) and Central Bank of Nigeria (CBN) official gazette. The data were analyzed using multiple regression analysis to establish the relationship that exists between the identified fiscal macroeconomic variables. The analysis revealed that the adjusted R2 of 0.629 or 63.0% of the Viability of the Construction Sector (proxy by Construction industry sector GDP growth rate(GDP ci)) is explained by the selected macroeconomic variables. While this study conclusion avail for long-run behavior of the economy and challenges of investment decision as it affects construction business, it recommended that appropriate guidance and understanding of macroeconomic policy is required by investors and policy makers for decision making and attracting investment to the building and construction subsector of the economy.
Abstract: This study aimed at establishing relationship between domestic debt, macroeconomic indices and the viability of the construction sector of Nigeria economy with a view to initiate empirical model for investor’s decision making. Archival data on monetary and fiscal macroeconomic indices such as unemployment rate; exchange rate; inflation rate; inte...
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An Empirical Examination of the Relationship between Board of Director Composition, Ownership Structure and Accounting Conservatism
Issue:
Volume 1, Issue 6, December 2013
Pages:
273-284
Received:
18 August 2013
Published:
20 October 2013
Abstract: In the present study, we investigate the relationship between corporate governance and accounting conservatism. We examine our model in the context of French firms over the period 2007-2011. We predict that an effective set of corporate governance mechanisms is positively related to a higher level of accounting conservatism. Empirical tests show that accounting conservatism depends mainly on the effectiveness of the board, the management shareholding, and the audit quality.
Abstract: In the present study, we investigate the relationship between corporate governance and accounting conservatism. We examine our model in the context of French firms over the period 2007-2011. We predict that an effective set of corporate governance mechanisms is positively related to a higher level of accounting conservatism. Empirical tests show th...
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The Arab Maghreb Union: the "Cost of Non Maghreb" and Sectoral Prospects
Adnen OUESLATI,
Riadh BRINI
Issue:
Volume 1, Issue 6, December 2013
Pages:
285-291
Received:
30 August 2013
Published:
20 October 2013
Abstract: The aim of the paper is to find out the “No Maghreb” cost as untapped opportunities of intra regional trade and to check the existence of comparative advantages in the Maghreb region. We use panel data with gravity model to study the relationship between total exports and factors affecting them, as well as, the exports by sector and their determinants for a sample of 57 countries, between, 1980-2007. The goal is to point out the total exports potential as a proxy of the “No Maghreb” cost. The study also allows establishing whether there are comparative advantages among the region countries. The results show the weak level of intra regional trade comparing to its potential. They also demonstrate that Maghreb countries have similarities and disparities according to some comparative advantages. This contributes to encourage intra regional trade and improve trade perspectives in Maghreb.
Abstract: The aim of the paper is to find out the “No Maghreb” cost as untapped opportunities of intra regional trade and to check the existence of comparative advantages in the Maghreb region. We use panel data with gravity model to study the relationship between total exports and factors affecting them, as well as, the exports by sector and their determina...
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Measurement of Fiscal Vulnerability from Natural Disasters – The Case of Albania
Issue:
Volume 1, Issue 6, December 2013
Pages:
292-298
Received:
30 September 2013
Published:
30 October 2013
Abstract: Natural disasters bring destruction and severe effects in the countries they hit. In small countries like Albania, where the insurance market is underdeveloped, the main role in absorbing disaster effects is often responsibility of the government. In this approach, the government is exposed from a fiscal point of view to the risk of natural disasters. This paper aims to measure the level of fiscal vulnerability in a country like Albania, caused by disasters that time after time hit the region, such as earthquakes or flood. This has been realized by calculating the disaster deficit index for earthquakes and flood, and the annual expected average loss from earthquakes. The results show for a high level of fiscal vulnerability in case of floods with a return period of 100 years and in case of earthquakes with a magnitude higher than 6.5 on Richter scale.
Abstract: Natural disasters bring destruction and severe effects in the countries they hit. In small countries like Albania, where the insurance market is underdeveloped, the main role in absorbing disaster effects is often responsibility of the government. In this approach, the government is exposed from a fiscal point of view to the risk of natural disaste...
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Impact of Inflation on Import: An Empirical Study
Issue:
Volume 1, Issue 6, December 2013
Pages:
299-309
Received:
19 September 2013
Published:
10 November 2013
Abstract: Inflation is associated with rising price. It is a situation in which there is a sustained, inordinate (excessive), and general increase in prices. The increase in prices must last for a reasonable period of time. If prices go up during this period and fall in the next, then it is mere price fluctuation. The increase in price must be excessive by that country's experience. Inflation is the rise in average price of all goods that we buy and not just of one item. After analyzing the trend of inflation rate, number of L/C and value of L/C opened in Prime Bank Limited, Khulna Branch in the last five years, it is seen that there is a minimum or very insignificant correlation between inflation and import trade. Theoretically, there is a positive correlation between domestic inflation and import. This study also shows a positive correlation, but the correlation is very insignificant. Obviously, there are some reasons behind this insignificance. We should remember that, inflation is not the only factor that can affect the import trade. There are many other factors that can influence the import trade of a country. In case of Bangladesh, the reasons are the massive pressure on the demand of goods available, exchange rate fluctuation, huge population, frequent natural disasters of Bangladesh, different government policies, relationship with the exporting country, inflation rate of the exporting country etc. As so many factors are influencing the import of a country, that’s why inflation cannot create a huge pressure on the import.
Abstract: Inflation is associated with rising price. It is a situation in which there is a sustained, inordinate (excessive), and general increase in prices. The increase in prices must last for a reasonable period of time. If prices go up during this period and fall in the next, then it is mere price fluctuation. The increase in price must be excessive by t...
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An Analysis of Federal Government Expenditure and Monetary Policy on Agricultural Output in Nigeria
Yusuf Wasiu Akintunde,
Adesope A. A. A.,
V. O. Okoruwa
Issue:
Volume 1, Issue 6, December 2013
Pages:
310-317
Received:
8 October 2013
Published:
10 November 2013
Abstract: The need to determine the factors that promote investment decisions in agriculture both on the part of the government and the citizenry in order to put the economy on the part of sustainable growth and development prompted this study. The broad objective of the study is to analyze the effectiveness of government annual budgetary allocation to agriculture and the role of monetary policy instruments in the growth of agricultural GDP. Data were sourced from the CBN statistical bulletin (various issues), and the National Bureau of Statistics. The data covers 1980-2012 and the method of analysis used is the OLS using E-view. The result of the analysis showed that Agricultural Credit Guarantee Scheme Fund, previous year GDPand Consumer Price Index contribute positively to the growth of agricultural GDP, other variables of interest like the interest rate, exchange rate, and government expenditure on agriculture contributed negatively to agricultural GDP growth. The study therefore recommended that government should increase her spending to agricultural sector, monitor the fund allocated, and provide the necessary infrastructural facilities like good road network, electricity health and water for the rural populace. The study concluded by recommending that the CBN should encourage the investor to invest in agriculture by bringing the interest rate down to single digit in order to facilitate investment in agriculture and promote consistent growth of agricultural GDP.
Abstract: The need to determine the factors that promote investment decisions in agriculture both on the part of the government and the citizenry in order to put the economy on the part of sustainable growth and development prompted this study. The broad objective of the study is to analyze the effectiveness of government annual budgetary allocation to agric...
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The Statistical Feature Analysis and Simulation Study of Supply Chain Based on Fixed Spread Risk Probability
Lei Wen,
Mingfang Guo,
Yachao Shi
Issue:
Volume 1, Issue 6, December 2013
Pages:
318-322
Received:
8 October 2013
Published:
10 November 2013
Abstract: Understanding supply chain network are important for modeling the spread of risks in enterprise nodes. This study characterizes the supply chain risk network of the spread of several nodes. To identify the rule of the movement of risk nodes, several parameters describing these properties are measured (degree, risk, the number of risk nodes, average risk, average path length and average clustering). The simulation results indicate: (1) this risk network has small-world and scale-free property; (2) the basic topological characteristics on static network displayed a regular change; (3) the characteristics of the spread of risk is measured by risk distribution which obeys a double power law and average risk which has a negative correlation with the number of risk node. In summation, this paper tries to analyze the risk spread of several nodes in supply chain network from macroscopic perspective.
Abstract: Understanding supply chain network are important for modeling the spread of risks in enterprise nodes. This study characterizes the supply chain risk network of the spread of several nodes. To identify the rule of the movement of risk nodes, several parameters describing these properties are measured (degree, risk, the number of risk nodes, average...
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The Impact of Foreign Direct Investment on Economic Growth: The Case of Zimbabwe (2009- 2012)
Issue:
Volume 1, Issue 6, December 2013
Pages:
323-329
Received:
16 September 2013
Published:
10 November 2013
Abstract: This paper analyzes the impact of Foreign Direct Investment on GDP in Zimbabwe, post dollarization period. Foreign Direct Investment has very significant positive impact on economic growth. I advocate for policies that promote inward FDI if our country is to meet its economic growth targets. The paper also analyses the impact of other macro economic factors on Gross Domestic product. Government Expenditure and Private Investment is found to have significant and positive impact on Gross Domestic Product. Factors that are found to affect GDP negatively are increases in Inflation and Interest Rates. The Zimbabwean data was inconclusive on the impact of two factors on Economic Growth, Which is External Debt and Net Exports; this merits further research because it is not in line with the theoretical predictions.
Abstract: This paper analyzes the impact of Foreign Direct Investment on GDP in Zimbabwe, post dollarization period. Foreign Direct Investment has very significant positive impact on economic growth. I advocate for policies that promote inward FDI if our country is to meet its economic growth targets. The paper also analyses the impact of other macro economi...
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Nexus between Stock Exchange Index and Exchange Rates
Md. Zahangir Alam,
Muhammad Abdur Rahim
Issue:
Volume 1, Issue 6, December 2013
Pages:
330-334
Received:
24 October 2013
Published:
10 November 2013
Abstract: This study is about to analyze the nexus between stock exchange index and exchange rates. Secondary data, namely the daily Dhaka Stock Exchange General Index and the BDT/USD Exchange Rates data from December 02, 2012 to April 30, 2012 are used for the study perpose. The findings of this study revealed that 73.1802% of the variation in DSE general index returns is explained by the BDT/USD exchange rates returns which imply that there is a strong nexus between these two financial series. LM test’s outcomes indicate that there is a serial correlation at order 1; historical figures of the residuals can be applied to predict the present values of residuals. ARCH test illustrates that the residuals are hete-roskedastic; and variance of residuals is not constant. Normality test of the distribution of the residuals shows that the resi-duals are normally distributed.
Abstract: This study is about to analyze the nexus between stock exchange index and exchange rates. Secondary data, namely the daily Dhaka Stock Exchange General Index and the BDT/USD Exchange Rates data from December 02, 2012 to April 30, 2012 are used for the study perpose. The findings of this study revealed that 73.1802% of the variation in DSE general ...
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Determinants of Managerial Behaviour in the Tunisian Banking Industry
ZAGHLA Abdessalem,
BOUJELBENE Younes
Issue:
Volume 1, Issue 6, December 2013
Pages:
335-346
Received:
31 August 2013
Published:
20 November 2013
Abstract: This paper determines management behaviour for Tunisian banking industry between 1989 and 2006. Following the Granger causality, we examine the intertemporal relationships between bank efficiency, loan loss provision and capitalisation. The possible relationships between the variables imply different modes of management behaviour namely bad management, bad luck, skimping, and moral hazard behaviour. We extend the Granger causality model developed by Berger and DeYoung (1997) by applying G.M.M dynamic panel estimators on a panel of Tunisian commercial banks. The econometric results suggest that the intertemporal relationships between the loan loss provision and productive efficiency are checked in only one direction. Our data provide evidence for the bad luck hypothesis suggesting the exogeneity of bad loans triggering inefficiency. In addition, we find no evidence of bad management hypothesis for the Tunisian commercial banks. Thus, these banks adopted a skimping behaviour over 1989-2006 period. Finally, the moral hazard behaviour, according to which the managers of the thinly capitalised banks assume additional portfolio risk, was identified in the context of the Tunisian banks.
Abstract: This paper determines management behaviour for Tunisian banking industry between 1989 and 2006. Following the Granger causality, we examine the intertemporal relationships between bank efficiency, loan loss provision and capitalisation. The possible relationships between the variables imply different modes of management behaviour namely bad managem...
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Quality Assessment of Self Help Groups on Stakeholders Perspectives: A Psychometrics Analysis
Sanjay Kanti Das,
Amalesh Bhowal
Issue:
Volume 1, Issue 6, December 2013
Pages:
347-366
Received:
25 October 2013
Published:
20 November 2013
Abstract: Micro finance has garnered significant worldwide attention as being a successful tool to meet substantial demand for financial services by low-income. India occupies a significant place and a niche in global micro finance through promotion of the Self Help Groups and the home grown SHG-Bank Linkage Programme model. It is observed that different stakeholders have promoted SHGs with different expectations and understanding, and have sorted different parameters of quality of SHGs. Thus, it is necessary to identify a common ground and set appropriate benchmarks for SHGs operation. Sixty one variables relating to quality parameters are identified and relevant perception of direct stakeholders about on whose perspective parameters to be considered for assessing Quality of SHG is incorporated in this study. The study is conducted by using multi-stage random sampling method to collect primary data from the selected Development Blocks of Nagaon districts of Assam (India). It is observed that there exists enough evidence to conclude that there are differences among direct stakeholders regarding perception of stakeholders about on whose perspective parameters to be considered for assessing quality of SHG. Further, these variables are more decisive statements or factors in this case under given methodology.
Abstract: Micro finance has garnered significant worldwide attention as being a successful tool to meet substantial demand for financial services by low-income. India occupies a significant place and a niche in global micro finance through promotion of the Self Help Groups and the home grown SHG-Bank Linkage Programme model. It is observed that different sta...
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An Evaluation of the Risk Profile of the Banking Industry in Ghana and its Implication on the National Economy
Ransford Quarmyne Churchill
Issue:
Volume 1, Issue 6, December 2013
Pages:
367-373
Received:
10 October 2013
Published:
20 November 2013
Abstract: The banking system is central to the economic management of every country. The impact of the global financial crisis and developments in some economies therefore call for a thorough assessment of the risk management framework of the Ghanaian banking sector. The main theme that runs through this study is the assessment of the risk profile of the Ghanaian banking industry and the potential effects of any mismanagement of the sector, on the economy. The study exposits on risk management in the banks as theoretical framework. Then, on the strength of analytical tools as trend analysis, benchmarks and charts, it analyzes available records between 2007 and 2012 to assess the sector in the areas of balance sheet items, credit, market and operational risks standards in the sector. It as well uses the level of implementation of the BCBS accords as a yardstick to infer the sector’s risk profile and evaluates the implications of non-adherence to the recommendation therein. It settles on the note that despite the good risk standards in the areas of capital adequacy, sound liquidity ratio and profitability of the industry, the high rate of Non-Performing Loan, the cedi instability, the inadequacy of the implementation of the Basel accords and operational deficiencies presents yet the weakness of the sector that vitiates the risk stature of the sector. On the balance of probability therefore, the sector generally does not have the best risk profile. There is therefore the need to keep a keen eye on the sector as any untoward developments in the sector could easily spillover to affect the national economy.
Abstract: The banking system is central to the economic management of every country. The impact of the global financial crisis and developments in some economies therefore call for a thorough assessment of the risk management framework of the Ghanaian banking sector. The main theme that runs through this study is the assessment of the risk profile of the Gha...
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Achievements and Barriers to Vietnam’s Economic Development
Phu-Hop Mai,
Jun-Wu Yang,
Thi-Van Nguyen
Issue:
Volume 1, Issue 6, December 2013
Pages:
374-381
Received:
26 October 2013
Published:
20 November 2013
Abstract: The research with the introduction of Vietnamese economy achievements since the Government implemented the reforms for the removal of the Centrally Planned Economy into the market economy so that legal system is improved to attract the investment as well as the support of the international community. Moreover, the article also analyzes the barriers which prevent the Vietnamese economy from developing its fully potential strength.
Abstract: The research with the introduction of Vietnamese economy achievements since the Government implemented the reforms for the removal of the Centrally Planned Economy into the market economy so that legal system is improved to attract the investment as well as the support of the international community. Moreover, the article also analyzes the barriers...
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Credit Assessment Practice of a Commercial Bank in Bangladesh
Issue:
Volume 1, Issue 6, December 2013
Pages:
382-387
Received:
29 October 2013
Published:
30 November 2013
Abstract: The banks act as an intermediary to mobilize the excess fund of surplus sectors to provide necessary finance, to those sectors, which are needed to promote for the sound development of the economy. Credit management is a dynamic field where a certain standard of long-range planning is needed to allocate the fund in diverse field and to minimize the risk and maximizing the return on the invested fund. Credit risk grading technique is an important tool for credit management as it helps a bank to understand various dimensions of risk involved in different credit transactions. The main purpose of this study is to make possible suggestions to improve present credit situation prevailing in the banking sector in Bangladesh by analyzing a reputed commercial bank’s credit activity. The study was undertaken to get an in depth idea of the credit appraisal system of a commercial bank and understand its importance. Beside this a case study of a well known commercial bank’s credit appraisal and risk grading technique were also revealed to identify some problems as well as propose some suggestions in this regard. From the study it was evident that the bank, maintained standard credit management policy in the changing market situation to establish a set of credit management policy.
Abstract: The banks act as an intermediary to mobilize the excess fund of surplus sectors to provide necessary finance, to those sectors, which are needed to promote for the sound development of the economy. Credit management is a dynamic field where a certain standard of long-range planning is needed to allocate the fund in diverse field and to minimize the...
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An Implementation Model for Production Quality Management in the Iranian Industrial Firms
AliReza Amerehei,
G. Z. Yuzbashi yeva
Issue:
Volume 1, Issue 6, December 2013
Pages:
388-390
Received:
24 October 2013
Published:
10 December 2013
Abstract: The paper has addressed the various issues of quality growth of industrial production at enterprises of Iran, and studied theoretical approaches to solving these problems, also the problem of choosing the optimal product , improvement of quality circles and departments of quality control on products enterprises,the issues of competitiveness of industrial production (holding market analysis and survey of the market).The articles also shows the international experience in quality management , and its technolioggies may be used in Iran.
Abstract: The paper has addressed the various issues of quality growth of industrial production at enterprises of Iran, and studied theoretical approaches to solving these problems, also the problem of choosing the optimal product , improvement of quality circles and departments of quality control on products enterprises,the issues of competitiveness of indu...
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Structural Breaks and Fiscal Deficit Sustainability in EAC Countries: Empirical Evidence
Issue:
Volume 1, Issue 6, December 2013
Pages:
391-399
Received:
16 December 2013
Published:
10 January 2014
Abstract: The study examines fiscal sustainability of the East African Community (EAC) Countries by testing for cointegration between government spending and revenue. The study tests for breaks in the long-run relationship between spending and revenue using Bai and Perron’s (2003) method. The presence of regime shifts is then accounted for when testing for cointegration by using testing procedures suggested by Gregory & Hansen (1996) and Hatemi-J (2008) to respectively account for one and two endogenous breaks. The findings show that the presence of regime shifts in the relationship between government spending and government revenue could not be rejected for all the EAC countries. Moreover, both cointegration tests used accounting for regime shifts suggest that government spending and revenue are cointegrated for all the EAC countries thus indicating that fiscal deficits in the EAC countries are sustainable. However, the cointegrating coefficient shows that budget deficits are only weakly sustainable in the long-run for Burundi, Kenya, Tanzania and Uganda and strongly sustainable for Rwanda. The finding implies that for Burundi, Kenya, Tanzania and Uganda, fiscal sustainability needs to be reinforced otherwise the countries are at high risk of default since they spend more than they earn.
Abstract: The study examines fiscal sustainability of the East African Community (EAC) Countries by testing for cointegration between government spending and revenue. The study tests for breaks in the long-run relationship between spending and revenue using Bai and Perron’s (2003) method. The presence of regime shifts is then accounted for when testing for c...
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Openness, Financial Development and Economic Growth in Algeria: An ARDL Bound Testing Approach
Miloud Lacheheb,
Peter Adamu,
Seth Akutson
Issue:
Volume 1, Issue 6, December 2013
Pages:
400-405
Received:
4 December 2013
Published:
20 January 2014
Abstract: This study examines the relationship between openness, financial development, and economic growth in Algeria using the autoregressive distributed lag (ARDL) cointegration framework. The results based on the bounds testing procedure confirm that a long-run relationship between openness, financial development, and economic growth exist. Data were obtained from the World Bank Development Indicators for the period of 1980 to 2010. Importantly, our results reveal that, openness has a significantly positive effect on economic growth. Broad money which is a proxy for financial development in this study is positive but insignificantly related to economic growth. Also, both labor force and gross capital formation are insignificant. These findings suggest a dire need for financial reforms in Algeria inorder to improve efficiency in the financial sector so as to stimulate saving/investment and thus, long-term economic growth.
Abstract: This study examines the relationship between openness, financial development, and economic growth in Algeria using the autoregressive distributed lag (ARDL) cointegration framework. The results based on the bounds testing procedure confirm that a long-run relationship between openness, financial development, and economic growth exist. Data were obt...
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Measuring Economic Capital Using Loss Distributions
Osei Antwi,
Alice Constance Mensah,
Martin Owusu Amoamah,
Dadzie Joseph
Issue:
Volume 1, Issue 6, December 2013
Pages:
406-412
Received:
11 December 2013
Published:
30 January 2014
Abstract: This paper investigates the complexity involved in the quantitative measurement of Economic Capital and proposes simulation methods as a practical solution for obtaining the loss distribution of a portfolio of obligors. The paper examines a one factor model to generate loss distribution which establishes the necessary ingredients to measure the credit risk quantities in a loan portfolio. The general elements of credit risk modeling are outlined and then a specific model that employs a Monte Carlo simulation is developed. An example is provided that calculates the risk quantities in a loan portfolio from which the Economic Capital in a credit risk portfolio is obtained.
Abstract: This paper investigates the complexity involved in the quantitative measurement of Economic Capital and proposes simulation methods as a practical solution for obtaining the loss distribution of a portfolio of obligors. The paper examines a one factor model to generate loss distribution which establishes the necessary ingredients to measure the cr...
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