Financial Reform and Economic Development in China

Laurenceson, James; Chai, Joseph C.H.

doi:10.4337/9781843767190

Cited by 232 publications

(174 citation statements)

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“…The ECM model has been shown to be robust against residual autocorrelation. Therefore, the presence of autocorrelation does not affect the estimates (Laurenceson and Chai, 2003).…”

Section: Error Correction Model For Agricultural Diversification Indementioning

confidence: 99%

Roles of Macroeconomic Variables on Agricultural Diversification in Nigeria

Akpan¹,

Udoka²,

Patrick³

2015

American Journal of Economics and Business Administration

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Abstract:The study examined the trend in agricultural diversification index from 1960 to 2014 in Nigeria. It also determined the influence of some macroeconomic variables on the estimated index. Augmented Dickey-Fuller-GLS unit root test showed that all series were integrated of order one. The long-run and short-run elasticity of the agricultural diversification index with respect to the specified macro-economic variables were determined using the techniques of co-integration and error correction models. The trend analysis revealed that, the country has witnessed appreciable level of agricultural diversification with 0.3%, 0.5% and 2.3% annual exponential growth rate in entropy diversification index, Herfindhal diversification index and Ogive diversification index respectively. The estimation of the error correction model supported the long run stability of agricultural diversification index in Nigeria. The empirical results revealed that, in the long run inflation, viable manufacturing sector, credit to agricultural sector, external reserves, per capita income, unemployment and energy consumption are positive drivers of agricultural diversification; whereas, crude oil prices, lending capacity of commercial Bank, foreign direct investment in agricultural sector and non-oil import are long run negative drivers of agricultural diversification in Nigeria. However, in the short run, inflation, external reserves and non-oil imports stimulated agricultural diversification; while energy consumption and manufacturing capability retard agricultural diversification in the country. A ten-year forecast was made on the estimated diversification indices and the result showed a progressive growth. The empirical results were further substantiated by the variance decomposition and impulse response analysis of the dependent variable with respect to changes in the explanatory variables. Results obtained were in line with the previous results. It is recommended that, the Nigeria government should re-aligned its macroeconomic policies to achieve stability in inflation rate, external reserves, industrial production, electricity consumption, agricultural credit institution if sustainable agricultural diversification is to be achieved in the long run.

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“…The ECM model has been shown to be robust against residual autocorrelation. Therefore, the presence of autocorrelation does not affect the estimates (Laurenceson and Chai, 2003).…”

Section: Error Correction Model For Agricultural Diversification Indementioning

confidence: 99%

Roles of Macroeconomic Variables on Agricultural Diversification in Nigeria

Akpan¹,

Udoka²,

Patrick³

2015

American Journal of Economics and Business Administration

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“…Furthermore, the unrestricted error correction model (UECM) seems to take satisfactory lags that captures the data generating process in a general-to-specific framework of specification (Laurenceson and Chai, 2003). However, Pesaran and Shin (1999) contented that "appropriate modification of the orders of the ARDLmodel is sufficient to simultaneously correct for residual serial correlation and the problem of endogenous variables".…”

Section: A Ardl Approach For Cointegrationmentioning

confidence: 99%

The Impact of Foreign Direct Investment on Stock Market Development: Evidence From Pakistan

Shahbaz

Kalim²

2013

Economic Research-Ekonomska Istraživanja

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Developing countries are witnessing changes in the composition of capital flows in their economies due to the expansion and integration of the world equity market. This paper investigates the impact of foreign direct investment on the stock market development in Pakistan. The key interest revolves around the complementary or substitution role of foreign direct investment to the development of stock market. ARDL bounds testing approach to cointegrationand ECM are employed for the analysis. Our results support the complementary role of foreign direct investment to the stock market development in Pakistan. Moreover, domestic savings, income and inflation are the other macroeconomic variables that affect the development of stock market in Pakistan.

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“…The ARDL model has been shown to be robust against residual autocorrelation. Therefore, the presence of autocorrelation does not affect the estimates, Laurenceson and Chai (2003).…”

Section: Wwwccsenetorg/ijbmmentioning

confidence: 99%

Inflation and Dividend Behavior of Pakistani Firms: An Empirical Investigation Using ARDL

Ghafoor

Khan²,

Shah³

et al. 2014

IJBM

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The purpose of this study is to examine the dividends behavior of Pakistani firms by taking a macroeconomic perspective. In doing that inflation and real growth are also considered. The paper examines the relationship between dividend yield, return on equity, real growth and inflation in the Pakistan by applying ARDL approach which is used to examine the relationship in the long run. Moreover, VECM is also applied to capture the short run impact. Results of ARDL revealed a positive relationship between inflation and dividend payments, which can be interpreted in two ways. First, inflation affects revenues and variable cost not the fixed cost; it simply increases the nominal value of corporate earnings and therefore dividend payouts, and second is that managers may try to pursue a dividend policy, which is considered to be optimal, believing that there is a desirable level of real dividend income to be paid to their investors. The results of ARDL approach show that inflation, in long term as well as in short run have positive relationship with dividends while return on equity and real growth rates showed insignificant relationship with dividend yield in both long and short run. The estimated equation remains stable over the period of study as indicated by CUSUM and CUSUMQ stability tests. This study is helpful for various investors in deciding for investment when they have fear of considerable acceleration of inflationary pressure. For example they can protect themselves against accelerating inflation rates when buying the stocks. While formulating an optimal dividend policy of the firm, managers should carefully examine the inflationary environment.

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Financial Reform and Economic Development in China

Cited by 232 publications

References 0 publications

Roles of Macroeconomic Variables on Agricultural Diversification in Nigeria

Roles of Macroeconomic Variables on Agricultural Diversification in Nigeria

The Impact of Foreign Direct Investment on Stock Market Development: Evidence From Pakistan

Inflation and Dividend Behavior of Pakistani Firms: An Empirical Investigation Using ARDL

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