Impact of Cost-Push and Monetary Factors on GDP Deflator: Empirical Evidence from the Economy of Pakistan

Javed, Zahoor Hussain; Farooq, Muhammad; Hussain, Maqsood; Shezad, Abdur-Rehman; Iqbal, Safder; Akram, Shama

doi:10.5430/ijfr.v2n1p57

Cited by 4 publications

(4 citation statements)

References 4 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…This insight aligns with the notion that long-term debt typically elevates the cost of debt, thereby reducing a firm's profitability. These results are in harmony with prior investigations by Ahmad et al (2015), Mukras (2015), Javed (2015), Ilyukhin (2015), Singh and Bansal (2016), Dalci (2018), andDaryanto et al (2018).…”

Section: Discussionsupporting

confidence: 93%

Navigating Financial Performance of the MENA Region Energy Sector: The Interplay of Working Capital and Leverage

Elgayar,

Serag,

Metawa

2024

IJEFI

View full text Add to dashboard Cite

This research delves into the influence of leverage considering potential outcomes within operational funds concerning the fiscal implications of the energy industry within the middle east and north Africa region. The research employed an empirical approach by collecting secondary data from the MENA region's energy sector between 2018 and 2022. To achieve this, the study formulated three hypotheses and utilized the empirical random panel data model. The investigative results affirm the validity of all three hypotheses. Additionally, they provide insights into the relationships among the variables in these hypotheses. Particularly noteworthy is the fact that certain results from the hypotheses contradict the expected theoretical impact. The article suggests that future researchers should delve into additional factors influencing firm performance, recognizing that diverse variables may yield varied outcomes. Broadening the study's scope by incorporating different timeframes and a more diverse array of firms could enhance the overall representativeness of research findings. Expanding this inquiry beyond the energy sector to encompass various industries might offer a comprehensive understanding of how working capital affects firm performance across distinct economic sectors. Subsequent empirical studies are advised to consider global health crises, political events, and other socio-economic developments in the MENA region. Examining events such as the COVID-19 pandemic and ongoing geopolitical conflicts like the Russian-Ukrainian and Israeli-Palestinian conflicts could illuminate how such incidents impact of the association among cash reserve, leverage, and company efficacy. To gain deeper insights into the causal distinctions among financial resources, and production form the company, researchers might investigate bidirectional results between each pair of variables using Granger causality tests. The findings from the present study are pertinent for energy sector companies, policymakers, and academia. Future research endeavors could focus on scrutinizing how the implications of operating funds on company procedures change when moderated by additional factors related to macroeconomics, providing practical insights for decision-makers.

show abstract

Section: Discussionsupporting

confidence: 93%

Navigating Financial Performance of the MENA Region Energy Sector: The Interplay of Working Capital and Leverage

Elgayar,

Serag,

Metawa

2024

IJEFI

View full text Add to dashboard Cite

show abstract

“…The positive association was related to flow of cash due to higher and long-term debt, hence increasing the profitability of firms, but the other side of the coin is that the long-term debt also brings in high cost of debt, hence decreasing the firm's profitability. The current results are in accordance with the past studies of Ahmad et al (2015), Mukras (2015), Javed (2015), Ilyukhin (2015), Singh and Bansal (2016), Dalci (2018) and Daryanto et al (2018). Moreover, the result of moderation of debt finance between working capital and profitability is interesting.…”

Section: Discussionsupporting

confidence: 93%

Working Capital and Financial Performance in the Energy Sector of Saudi Arabia: Moderating Role of Leverage

Shaik

Anis

Alanazi

2023

IJEEP

View full text Add to dashboard Cite

The current study examines the effect of working capital (measured in terms of current ratio) on firm performance in the listed firms of Saudi Arabian energy sector during the period starting from 2012 to 2019. A pooled and panel data model was used to analyze the extracted data. The findings indicate that working capital has a considerable beneficial impact on company performance and that leverage has a significant negative impact. Even after moderating by an interaction variable, working capital still has a substantial negative influence on corporate performance.

show abstract

“…There result support demand-side inflation. According to [26] money supply effects all indicators of inflation.…”

Section: Demand Side Channel Of Mtmmentioning

confidence: 99%

“…By using Johannes cointegration utilizing by [37] found that import of goods and services was the main reason of inflation. The study of [26] is when government expenditure are more than their revenue, the government takes deficit financing, therefore, prices level increases and also inflation occurs. Moreover, inflation expectation increases if upgrade level of government debt.…”

Section: Cost Channel Of Mtmmentioning

confidence: 99%

What determine inflation in Pakistan: an investigation through structural equation modeling by using time series data for a period from 1975 to 2017

Uddin¹

2020

Econ. Consult.

View full text Add to dashboard Cite

Interest rate is the most popular instrument of monetary policy to control inflation around the globe. It is assumed that the tight monetary policy, such as an increase in interest rate, will reduce inflation by reducing aggregate demand in the economy. However, in reality, the use of monetary tightening could be counterproductive. The monetary tightening may increase inflation dates back to 1923 when Gibson (1923) observed that correlation between interest rate and inflation is positive. There are different opinions about how the interest rate affects inflation. The most famous is called Monetary Transmission Mechanism (MTM). According to the demand side channel of MTM, increase an interest rate, therefore the aggregate demand will decrease and finally, the price level will decrease. However, the supply side channel of MTM, states that the rise of interest rate will increase the cost of production, shifting up the aggregate supply curve. This will create a rise in the general prices level. The problem in that, there are many channels of MTM which can be categorized into demand side and supply side. Many researchers take one channel and make single equation, this leads to missing variable bias. Therefore there is need to take them simultaneously which can be done by (SEM) Structural equation modeling. This research study is very significant, because this research combines both demand and supply channel simultaneously, and removes biasedness through (SEM) structural equation modeling. The Augmented Dickey-Fuller (ADF) test finds that all the variables are stationary at first difference i.e. I (1), except inflation and investment. Firstly, unrestricted structural equation model (USEM) has estimated. The mostly coefficient of USEM has found to insignificant i.e. their probability value more than 50 percent. To remove the insignificant coefficient, we are given these unnecessary coefficients the regression weight is zero for the purpose of getting significant results. Secondly, the restricted structural equation model (RSEM) is estimated. The estimated results reveal that; interest rate has a positive relation with exchange rate and industrial inputs prices, while negative relation with the price of equity and investment. Therefore, the exchange rate, price of imports, price of exports and consumption have a positive relation with inflation while investment, loan, and output have a negative relationship with inflation. Finally, the interest rate is not a significant determinant of inflation. Therefore, the exchange rate and cost channel are responsible for the transmission mechanism of interest rate to inflation in Pakistan. This study can be extended in several ways. First, this study focus on how monetary policy effect inflation, further includes in this study fiscal policy. Lastly, a regional analysis can serve as the best extension of this research. Our work was focused on Pakistan only, however a regional comparison can be appropriate.

show abstract

Impact of Cost-Push and Monetary Factors on GDP Deflator: Empirical Evidence from the Economy of Pakistan

Cited by 4 publications

References 4 publications

Navigating Financial Performance of the MENA Region Energy Sector: The Interplay of Working Capital and Leverage

Navigating Financial Performance of the MENA Region Energy Sector: The Interplay of Working Capital and Leverage

Working Capital and Financial Performance in the Energy Sector of Saudi Arabia: Moderating Role of Leverage

What determine inflation in Pakistan: an investigation through structural equation modeling by using time series data for a period from 1975 to 2017

Contact Info

Product

Resources

About