Search results

This study empirically examines the impact of some domestic as well as global factors such as trade openness (TO), money supply (MS), exchange rate, global oil prices (GOPs) and interest rate (IR) on inflation.

This study deploys a quantitative method considering 30 years of data (1991–2020) from four South Asian countries, namely, Sri Lanka, Pakistan, Bangladesh and India. To determine the potential impact of different factors on inflation, this study applies the panel analysis of the system generalized method of moments (SGMM).

This study empirically finds that TO, MS, exchange rate and GOPs have a positive impact on inflation, while IR and the structural adjustment program (SAP) have a negative impact on inflation. Out of the various determinants considered in this study, TO, exchange rate and the SAP are insignificant, while the rest of the variables are significant and consistent with previous studies.

This study informs policymakers about maintaining price stability and fostering economic growth in South Asian nations. It breaks new ground as the first empirical examination of the International Monetary Fund (IMF)’s SAP impact on inflation in the region.

This study tries to find out whether the SAP of the IMF is responsible for inflation in South Asian countries. It gives renewed attention to the causality of inflation from the perspective of countries receiving loans from donors, especially the IMF.

The study aims to estimate the short- and long-run effects of monetary policy on residential property prices in South Africa. Over the past decades, there has been a monetary policy shift, from targeting money supply and exchange rate to inflation. The shifts have affected residential property market dynamics.

The Johansen cointegration approach was used to estimate the effects of changes in monetary policy proxies on residential property prices using quarterly data from 1980 to 2022.

Mortgage finance and economic growth have a significant positive long-run effect on residential property prices. The consumer price index, the inflation targeting framework, interest rates and exchange rates have a significant negative long-run effect on residential property prices. The Granger causality test has depicted that exchange rate significantly influences residential property prices in the short run, and interest rates, inflation targeting framework, gross domestic product, money supply consumer price index and exchange rate can quickly return to equilibrium when they are in disequilibrium.

There are limited arguments whether the inflation targeting monetary policy framework in South Africa has prevented residential property market boom and bust scenarios. The study has found that the implementation of inflation targeting framework has successfully reduced booms in residential property prices in South Africa.

The purpose of this study paper is to highlight certain related barriers and issues of housing affordability and examine the factors that influence housing affordability in Malaysia.

This study used panel data including several variables, namely, household expense, population, home financing, interest rate, inflation rate (IF) and rental rate (RR). The regression models of panel data, namely, the ordinary least square model, the fixed effects model and the random effects model, were evaluated for their suitability.

The findings revealed that RR and IF have a positive and significant impact towards housing affordability. The results provide strong evidence that RR as alternative in determining the home affordability as it helped in reducing the cost and the financing duration period of houses while at the same time increasing the level of capability of homeownership. Meanwhile, the level of IF has positive and significant impact towards housing affordability because it will cause a drop or increase in the purchasing power of households, as well as a decline or increase in the capability to own a house.

The most significant aspects to consider when analysing housing affordability in Malaysia are demand and supply. However, this study focuses on only five variables and only covers Malaysia. As a result, future researchers should analyse the study’s location, such as by region or district, and include additional variables from both the demand and supply sides. Homeownership of affordability requires a broader and more realistic definition in the current context of a more disruptive environment where technology such as fintech, blockchain and the internet of things acts as enablers for not only promoting homeownership but also ensuring homeownership sustainability. As a result, democratising Islamic home financing appears to be a viable option that requires rethinking, and further research is recommended.

The study proposes an end-to-end solution to promote homeownership levels by considering the level of RR as significant variables among stakeholders such as the house buyers/owners, sellers, investors as well the government agencies in influencing affordability in Malaysia.

This paper discusses the indicators of housing affordability index over the 21-year period of 2000–2020, covering all states in Malaysia. The comparison of affordability level can be seen through all states and by regions. Besides that, the findings revealed that RR and IF have a positive and significant impact towards housing affordability. RR is considered an essential variable in promoting homeownership in Malaysia and warrants further investigation towards policy implication. This paper also provides contribution on data on RR by states in Malaysia that can be used by policymakers to some extent.

This paper aims to unravel the impact of post-pandemic COVID-19 on foreign direct investment (FDI) and its determinants in the South Asian Association for Regional Cooperation (SAARC) Countries.

The study utilized four macroeconomic variables includes growth domestic product growth rate (GDPG), inflation rate (IR), exchange rate (ER), and unemployment rate (UR) to assess their impact on post-pandemic FDI, along with two variables control of corruption (CC) and political stability (PS) to measure the influence of good governance. Random effects, fixed effects, cluster random effects, cluster fixed effects and generalized method of moments (GMM) models were applied to a balanced panel dataset comprising eight SAARC countries over the period 2010–2021. To identify the random trend component in each variable, three renowned unit root tests (Levin, Lin and Chu LLC, Im-Pesaran-Shin IPS and Augmented Dickey-Fuller ADF) were used, and co-integration associations between variables were verified through the Pedroni and Kao approaches. Data analysis was performed using STATA 17 software.

The major findings revealed that the variables have an order of integration at the first difference I (1). Nonetheless, this situation suggests the possibility of a long-term link between the series. And the main results of the findings show that the coefficients of GDPG, CC and PS are positive and significant in the long run, showing that these variables boosted FDI inflows in the SAARC region as they are significantly positively linked to FDI inflows. Similarly, the coefficients of UR, IR, ER and COVID-19 are negative and significant.

By identifying the specific impacts of the post-pandemic FDI and its determinants, governments and policymakers can formulate targeted policies and measures to mitigate the adverse effects and enhance investment attractiveness. Additionally, investors can gain a deeper understanding of the risk factors and adapt their strategies accordingly, ensuring resilience and sustainable growth. Finally, this paper adds value to the literature on the post-pandemic impact on FDI inflows in the SAARC region.

This paper is the first attempt to trace the impact of COVID-19 on Foreign Direct Investment and its determinants in the SAARC Countries. Most of the previous studies were analytical in nature and, if empirical, excluded some countries due to the unviability of the data set. This study includes all the SAARC member countries, and all variables' data are completely available. There is still a lack of empirical studies related to the SAARC region; this study attempts to fill the gap.

The purpose of this study is to verify all factors that promote renewable energy (RE) consumption. Past studies have shown that financial development (FD) and economic growth (EG) are the major drivers toward RE development, while oil prices had mixed outcomes in different regions by different studies.

Global warming effects have been the major reason of the transition by nations from fossil fuel use to RE sources that are considered as friendly to the environment. This research uses the fixed effects and random effects techniques, to ascertain the factors which impact RE development. The generalized linear model is also used to check the robustness of the Fixed Effects and Random Effects models’ results, while the Kao, Pedroni and Westerlund tests are used to check cointegration in the specified model.

The major findings of this study show the importance of EG and FD in promoting RE development. Oil prices, inflation rate and public sector credit present a negative effect on RE development, while foreign direct investment does not significantly impact RE development.

This research recommends the use of FD in promoting RE sources, as well as the stabilization of oil prices and consumer prices.

This research is important because it specifies the three proxies of FD, together with foreign direct investment inflation rate, EG and oil prices, in modeling RE. By investigating the impact of oil prices on RE in the emerging seven economies, this research becomes one of the few studies done in this region, as per the authors’ knowhow.

Driven by the anticipated global stagflation, this straightforward yet novel study examines the cost of inflation as a macroeconomic factor by investigating its influence on stock market growth. Thus, this paper aims to examine the impact of inflation on the probability of initial public offering (IPO) withdrawal decision.

The paper employs a large dataset that covers the period January 1995–December 2019 and comprises 33,536 successful or withdrawn IPOs from 22 nations with various legal and cultural systems. This study applies a probit model utilizing version 15 of Stata statistical software.

This study finds that inflation is substantially and positively correlated with the likelihood of IPO withdrawal. Results of this study show that the IPO withdrawal decision increases up to 90% when the inflation rate climbs by 10%. Multiple robustness tests provide consistent findings.

This study's implications are important for researchers, investment banks, underwriters, issuers, regulators and stock exchanges. When processing IPO proposals, investment banks, underwriters and issuers must consider inflation projections to avoid negative effects, as demonstrated by the findings. In addition, regulators and stock exchanges must be aware of the detrimental impact of inflation on competitiveness in attracting new listings.

To the best of the authors’ knowledge, this study is the first to present convincing evidence of a major relationship between IPO withdrawal decision and inflation.

This study aims to explore the potential impact of country-level governance in corporate financing structures.

A two-step system generalized method of moment was used due to the endogeneity issue. The whole sample comprises 3,761 firms in five economies – China, India, Pakistan, Singapore and South Korea – from 2007 to 2016.

The results indicate that the debt option for financing is not favorable under governments with an adequate governance arrangement. However, there is a direct and significant link between country governance and equity financing because in adequate governance arrangements, the possibilities of information asymmetry are minimal and businesses consider equity a more appropriate and safer financing instrument. In contrast, firms prefer to trade-credit financing in poor governance economies, which confirms an adverse link between trade credit and adequate governance.

The country’s governance should be considered a sensitive matter when deciding about corporate financing.

This arrangement of variables has not been previously analyzed in the literature, suggesting the study’s novelty.

The housing market in Kenya continues to experience an excessive imbalance between supply and demand. This imbalance renders the housing market volatile, and stakeholders lose repeatedly. The purpose of the study was to forecast housing prices (HPs) in Kenya using simple and complex regression models to assess the best model for projecting the HPs in Kenya.

The study used time series data from 1975 to 2020 of the selected macroeconomic factors sourced from Kenya National Bureau of Statistics, Central Bank of Kenya and Hass Consult Limited. Linear regression, multiple regression, autoregressive integrated moving average (ARIMA) and autoregressive distributed lag (ARDL) models regression techniques were used to model HPs.

The study concludes that the performance of the housing market is very sensitive to changes in the economic indicators, and therefore, the key players in the housing market should consider the performance of the economy during the project feasibility studies and appraisals. From the results, it can be deduced that complex models outperform simple models in forecasting HPs in Kenya. The vector autoregressive (VAR) model performs the best in forecasting HPs considering its lowest root mean squared error (RMSE), mean absolute error (MAE), mean absolute percentage error (MAPE) and bias proportion coefficient. ARIMA models perform dismally in forecasting HPs, and therefore, we conclude that HP is not a self-projecting variable.

A model for projecting HPs could be a game changer if applied during the project appraisal stage by the developers and project managers. The study thoroughly compared the various regression models to ascertain the best model for forecasting the prices and revealed that complex models perform better than simple models in forecasting HPs. The study recommends a VAR model in forecasting HPs considering its lowest RMSE, MAE, MAPE and bias proportion coefficient compared to other models. The model, if used in collaboration with the already existing hedonic models, will ensure that the investments in the housing markets are well-informed, and hence, a reduction in economic losses arising from poor market forecasting techniques. However, these study findings are only applicable to the commercial housing market i.e. houses for sale and rent.

While more research has been done on HP projections, this study was based on a comparison of simple and complex regression models of projecting HPs. A total of five models were compared in the study: the simple regression model, multiple regression model, ARIMA model, ARDL model and VAR model. The findings reveal that complex models outperform simple models in projecting HPs. Nonetheless, the study also used nine macroeconomic indicators in the model-building process. Granger causality test reveals that only household income (HHI), gross domestic product, interest rate, exchange rates (EXCR) and private capital inflows have a significant effect on the changes in HPs. Nonetheless, the study adds two little-known indicators in the projection of HPs, which are the EXCR and HHI.

The current analysis aims to explore the role of cash holdings in the nexus of national governance and capital investment (CIN).

To achieve this aim, the authors sample the nonfinancial enterprises from 5 Brazil, Russia, India, China, South Africa (BRICS) economies and employ system generalized method of moments(GMM) models as an estimation technique.

The empirical analysis infers that national governance has a positive relationship with CIN and a negative relationship with cash holdings. The cash holdings negatively determine CIN. However, the cash holdings show a positive relationship with CIN in the presence of the national governance index (NGI).

The important policy layout of the current analysis is that corporate managers should reduce cash holdings during better governance situations. Alternatively, corporate managers can disentangle the negative impact of bad country governance conditions on CIN by holding more cash.

The study is innovative as it explores mediating impact of cash holdings in the NGI-CIN nexus.

In the recent wake of environmental sustainability, more attention has been paid to the consumption of specific energy types. However, how the consumption of such energy alternatives influences multiple corporate-level decisions has not yet been well explored in the literature. The current analysis bridges this deficiency in literature by exploring the empirical relationship between energy alternatives and cash holdings.

For empirical analysis, the authors sample the non-financial sector enterprises founded in five BRICS economies and employ the system GMM and fully modified ordinary least square techniques to establish the regression. The selection of econometric techniques is subject to the existence of endogeneity and cointegration.

The estimated coefficients reveal a significant negative effect of renewable energy (REC) while a significant positive impact of non-renewable energy consumption (FFE) on cash holdings. Referring to low pollution emissions, less operational risk and a cheap source of energy, the more consumption of renewable energy reduces the motives of cash holdings. Primarily, the current analysis advocates an important policy regarding the utilization of renewable energy as industrial fuel inputs because it has a material impact on cash holdings and also ensures environmental sustainability.

This study has equal policy outputs for industry officials, policy regulators and environmental economists. Corporate managers should do more focus on transforming the energy needs from non-renewable to renewable as such transformation can benefit in terms of both, i.e. environmental sustainability and low cash holdings.

Contemporary literature mainly highlights the determinants of energy consumption. However, it is less known how the consumption of specific energy sources affects the firm's cash-holding decisions. Thus, this study enriches both energy economics and financial economics literature by offering cutting-edge evidence on the sustainable role of REC in declining cash holdings.