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International Journal of Economics and Financial Research

Online ISSN: 2411-9407
Print ISSN: 2413-8533

Quarterly Published (4 Issues Per Year)





Archives

Volume 7 Number 2 June 2021

Evaluating the Persistence of j Curve Phenomenon in the Bilateral Trade between Bangladesh and USA: The ARDL Bounds Testing Approach and Granger Causality Analysis


Authors: Subroto Dey ; Homamul Islam
Pages: 74-81
DOI: doi.org/10.32861/ijefr.72.74.81
Abstract
Most of the previously examined studies that investigated the repercussion of the trade balance to exchange rate mutation relied on the assumption that appreciation and depreciation behave symmetrically, recently several works have been conducted using the asymmetric analysis. In this work, we exhibited a model employing the disaggregated data (bilateral) of trade balance with the USA. In our pursuit, we endeavored to disclose a phenomenon of the J curve, is this pattern present in our trade balance and exchange rate bearing? In this article, first, we checked the stationary of data set and discovered the stationary employing the Augmented Dickey-Fuller test, Phillips Peron then applying the ARDL bounds test of cointegration apropos to find out the long run co integrated equations and last of all, tried to investigate the short-run and long-run relationship among the variables, while we used the ECM (error correction model). The Toda-Yamamoto Procedure for Granger Causality in a VAR framework has been applied to detect the causal direction. In our model, we have blazoned the negative short-run rapport between the exchange rate and trade balance in the bilateral data, whereas we have remarked a discrepant bearing in the long run and we did receive the evidence of the appearance of j pattern in the relationship between exchange rate and trade balance. Dispensing the error correction model, we found domestic higher price level hinders the trade balance in the short run, did not find any evidence of foreign income stimulate the export. Toda-Yamamoto Procedure for Granger Causality reveals the unidirectional causal effect from exchange rate to trade balance of Bangladesh with the USA.

The Impact of ICT on Technical Efficiency of Vietnam’s Enterprises


Authors: Nguyen Anh Phong ; Bui Thi Quynh Dao ; Le Thi Thuy Hue ; Nguyen Ngoc Van Khanh ; Nguyen Lam Thanh Ngan ; Vu Thuy Hong Phuoc
Pages: 65-73
DOI: doi.org/10.32861/ijefr.72.65.73
Abstract
This research evaluates the impact of ICT on the technical efficiency of firms in 63 provinces and cities in Vietnam. We apply to use the DEA method in which we use the variable return to scale to evaluate because firm sizes in 63 provinces are different. At the same time, this method aims to minimize input factors without reducing output factors to measure technical efficiency. This result that is used a binary variable in the logit regression model to identify factors that have an impact on technical efficiency, especially the ICT factor. The research results show that only nearly 10% of the provinces could be technically efficient in business activities. Provinces with sustainable performance and efficiency all depend on influencing factors such as equity ratio, labor productivity, market size, investment, and especially the ICT factor keep increasing over the years and fluctuate around a pretty high level. On the other hand, for the group of unsustainable and ineffective provinces, these variables tend to decrease and fluctuate around at a low level. The research shows that factors in labor productivity, equity ratio, market size, investment, and ICT all have a positive impact on a firm’s performance in 63 provinces and cities of Vietnam. Therefore, firms that want to enhance their efficiency need to have strategies to improve the factors mentioned above. Moreover, the local government needs to improve the ICT index to help to increase their local Enterprises’ efficiency.


The Impact of the Global Economic Meltdown on the Manufacturing Sector in Nigeria (2005 – 2009)


Authors: Akinbayo Olasoji
Pages: 57-64
DOI: doi.org/10.32861/ijefr.72.57.64
Abstract
As several opinions and suggestions were made on the effect of the global economic meltdown on the Nigerian economy, however, few of these studies explored the impact of the crisis on the manufacturing sector of the economy. In this study, the effort is to provide empirical evidence of the impact on the sector. To achieve this, cross-sectional and time-series data were randomly collected from thirty-one (31) quoted firms across different sectors of the manufacturing sector and for a period of five years (2005-2009). A panel model analysis was employed as the estimating technique; it was considered as the most appropriate for the study. The objectives stated in the study were achieved, as the empirical findings revealed that the global economic meltdown had an impact on the Nigerian manufacturing sector. More so, the impact was negative on the sector and on its profitability all through the periods considered, as the impact was more severe in the year 2007. It was also revealed that profitability across the manufacturing firms in Nigeria is time-variant and cross sectionals variant. Finally, a set of policy recommendations were made as a result of the findings, in order to recognize the role of the manufacturing sector as the engine of growth, whose performance is crucial for economic dependency and transformation, these policies are to help in repositioning the sector from the bad state it was before and after the period of global economic crisis to an encouraging state: The sector need to have a strategic framework for industrial development that is domesticated, emphasis should be made on local sourcing of raw materials and technology so as to save guard the economy from the future severe impact of foreign economic shock, Government should ensure tight effective border control, power generation, transmission, and distribution should be improved, bailout funds and adequate credit should be made available. These and others, if carefully implemented, the manufacturing sector will be able to yield a positive result, possible as the driver of the economy by creating wealth, employment generation and economic prosperity.


Ethics de' Competitiveness in Finance: An Emancipative Structured Assessment and Evaluation of Indian Finance Industry


Authors: Rohit Kanda ; Harish Handa ; Pushpkant Shakdwipee
Pages: 43-56
DOI: doi.org/10.32861/ijefr.72.43.56
Abstract
Ethical Codes in the Indian Context have not been subjected to much scrutiny. A culture that is conservative in monetary terms attaches a very high value to created wealth, in turn, leading to business practices bringing change in the lives of many and ensuring the process of wealth creation. It has been theoretically urged that "small startup firms stress on revenue collection" and till present most of the regulations regarding business ethos, good governance, and corporate social responsibility are only focused on large public listed companies. Further, the Going on studies in India is mostly focused on Large Firms, Based on Secondary Information. Being a Qualitative Research, the design opted for this research is Descriptive Research Design, where Survey is the Primary Method of Data Collection. Key Personnel(s) / Official(s) of the above Organizations will be interviewed/surveyed by the above-mentioned modes of data collection, as its internal stakeholders. Customers in reach, Nearby observers, Government representatives, Independent Company Auditors, etc. with questions about EBP in service delivery quality and service failure handling, were the external stakeholders. Stratified random sampling has been used for the purpose of sampling, with a supplement of simple random sampling. The maximum Sample is from Business Services, followed by Finance. In Finance, More Firms observed believing EBP. Based upon the study results, the sample firms have been apportioned among 2 clusters, namely, ’Low Ethics Less Growing Start-ups’ and ’Highly Ethical Fastly Growing Start-ups’. Low Ethics Less Growing Start-ups are maximum in case of Finance Industry, which is a common observation in case of many small start up finance firms.


Is There a Change in the Money Demand Stability in Turkey? A Nonlinear Approach


Authors: Emel Siklar ; Ilyas Siklar
Pages: 28-42
DOI: doi.org/10.32861/ijefr.72.28.42
Abstract
The details of a central bank’s monetary policy are based on assumptions about the money demand. This requires researches that aim to investigate money demand dynamics. Knowing these dynamics will support the identification of risks that may pose a threat to price stability in the long run. This study aims to analyze the changes observed in the demand for money during the last 35 years (1986-2020) in Turkey. When the analyzing period is considered as a whole in the study, it is determined that the demand for money is not stable. However, the nonlinear cointegration analysis used within the framework of soft transition models indicates that the money demand model can be divided into two different regimes with stability. In this case, it is possible to talk about the existence of a transition period in which stability is lost in the demand for money. The analyzing technique used allows the coefficients obtained for money demand to change over time according to the regime in which the economy operates. Nonlinear estimation results indicate that there is a long-term relationship between the demand for money and its macroeconomic determinants such as price level, income, interest rate, and money holding preferences of economic agents.

Effects of Foreign Aid and Remittances Flows on Saving and Investment in Developing South Asia: Panel Data Study


Authors: Md. Ahasan Ul Haque ; Md. Golam Kibria ; Md. Muhaiminul Islam Selim
Pages: 21-27
DOI: doi.org/10.32861/ijefr.72.21.27
Abstract
In this study, we investigate the impact of remittances and foreign aid (official foreign assistance) on investment and saving in South Asian countries. We also analyze the comparative influence of remittances and foreign aid in stimulating saving and investment. We use a sample of five South Asian countries over the period 1985-2018 and employ OLS and 2SLS methods to estimate the effect of remittance and foreign aid on saving and investment. The result reveals that remittance has a positive impact on saving but has no significant effect on investment and shows that foreign aid has no significant impact on saving but negatively influences investment. In line with our results, a rise in 10 percent of remittances in South Asia raises savings by 1.6 percent in the OLS estimates and by 1.7 percent when we use 2SLS. At the same time for a 10% increase in foreign aid decreases saving by 4.3% and 3.3%, respectively, in two methods. For the second regression, an increase in 10% remittances hamper investment by 1.3% and 1% for OLS and 2SLS, respectively. And for the analogous 10% increase in foreign aid decrease investment by 5.4% and 5.2%, respectively. However, if foreign aid is efficiently used, it can be an important complement to remittances by permitting households to overcome the minimum threshold level and they can use a bigger portion of their remittances for savings and investment motive.