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Article
Publication date: 29 April 2021

Saba Haider, Mian Sajid Nazir, Alfredo Jiménez and Muhammad Ali Jibran Qamar

In this paper the authors examine evidence on exchange rate predictability through commodity prices for a set of countries categorized as commodity import- and export-dependent…

Abstract

Purpose

In this paper the authors examine evidence on exchange rate predictability through commodity prices for a set of countries categorized as commodity import- and export-dependent developed and emerging countries.

Design/methodology/approach

The authors perform in-sample and out-of-sample forecasting analysis. The commodity prices are modeled to predict the exchange rate and to analyze whether this commodity price model can perform better than the random walk model (RWM) or not. These two models are compared and evaluated in terms of exchange rate forecasting abilities based on mean squared forecast error and Theil inequality coefficient.

Findings

The authors find that primary commodity prices better predict exchange rates in almost two-thirds of export-dependent developed countries. In contrast, the RWM shows superior performance in the majority of export-dependent emerging, import-dependent emerging and developed countries.

Originality/value

Previous studies examined the exchange rate of commodity export-dependent developed countries mainly. This study examines both developed and emerging countries and finds for which one the changes in prices of export commodities (in case of commodity export-dependent country) or prices of major importing commodities (in case of import-dependent countries) can significantly predict the exchange rate.

Details

International Journal of Emerging Markets, vol. 18 no. 1
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 1 September 2021

Muhammad Ali Jibran Qamar, Asma Hassan, Mian Sajid Nazir and Abdul Haque

The purpose of this paper is to examine the impact of dividend announcements on the stock return of Shariah-compliant and conventional stocks.

Abstract

Purpose

The purpose of this paper is to examine the impact of dividend announcements on the stock return of Shariah-compliant and conventional stocks.

Design/methodology/approach

An event study methodology is applied to study the beta anomaly. Market-adjusted return model, mean-adjusted return model and market model have been applied to calculate excess returns. Estimation period used in this study is 130 days, and event period consists of 21 days in total, i.e. starting from the day –10 “before the cash dividend announcement” to day +10 “after the cash dividend announcements.

Findings

It has been concluded from the results that dividend plays an informational role in the Pakistan Stock Exchange. As the investors in Pakistan react favorably to the dividend increase announcements and unfavorably to the dividend decrease announcements, they consider dividend increase announcement as good news and dividend decrease announcement as bad news.

Practical implications

The findings of this study have several implications for different participants of the stock market, such as investors, academicians, researchers, fund managers and policymakers. They can use this information to make decisions while making efficient portfolios. Investors may get abnormal returns by focusing on the dividend announcement patterns. This can influence the attitude of investors toward efficient investments in the stock market and ultimately contribute to the betterment of society. This study is also beneficial for academicians and researchers, as it provides a comparative analysis of Shariah-compliant and conventional stocks and the anomalous effect of dividend announcements on stock return.

Originality/value

Limited research in the world’s context and null is available in Pakistani context on the subject matter. The comparative analysis of “Shariah-compliant” and “conventional” stocks provides insight into the asset pricing of Shariah-compliant stocks that have not been explored earlier. This study also uses three different methods (mean model, market model and market-adjusted return models) to compare Shariah-compliant and conventional stocks

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 15 no. 1
Type: Research Article
ISSN: 1753-8394

Keywords

Article
Publication date: 20 September 2024

Aamer Shahzad, Mian Sajid Nazir, Flávio Morais and Affaf Asghar Butt

The role played by corporate governance mechanisms on corporate deleveraging policies has not been clarified. Empirical evidence is confined to developed economies, even with…

Abstract

Purpose

The role played by corporate governance mechanisms on corporate deleveraging policies has not been clarified. Empirical evidence is confined to developed economies, even with conflicting and inconclusive results. This paper aims to examine the role of corporate governance mechanisms, such as ownership structure, board composition and CEO dominance, in explaining corporate deleveraging policies.

Design/methodology/approach

Using a sample of listed Pakistani firms between 2010 and 2022, this study resorts to binary response models to examine the effects of governance mechanisms on firms’ decision to go debt-free.

Findings

A greater ownership concentration, institutional ownership and family ownership increase the propensity for zero leverage. Board gender diversity decreases the propensity for deleveraging policies, which seems to indicate that the presence of females reinforces the monitoring function of the board. Finally, lower managerial ownership or CEO dominance decreases the propensity toward zero leverage (interest convergence hypothesis), but higher managerial ownership or CEO dominance increases the propensity toward zero leverage (managerial entrenchment hypothesis).

Practical implications

Risk-averse managers who prefer to control a firm using little or no debt will find it easier to implement these financing policies in firms with greater ownership concentration and where institutional holders have a substantial stake. For shareholders, this study suggests that investing in firms with females on board reduces the risk of corporate deleveraging policies being adopted for entrenched reasons.

Social implications

The presence of females on board seems to decrease the propensity of managers to adopt opportunistic actions and may also contribute to enhancing human welfare and society in developing countries.

Originality/value

To the best of the authors’ knowledge, this is the first study considering the effect of board diversity on zero leverage. Another singularity is that this study exhibits a nonlinear relationship between managerial ownership and corporate deleveraging policy.

Details

Corporate Governance: The International Journal of Business in Society, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 17 June 2021

Salah U-Din, Mian Sajid Nazir and Aamer Shahzad

In the last few decades, the frequency and intensity of extreme weather events have increased in most parts of the world including Canada because of global warming. The global…

Abstract

Purpose

In the last few decades, the frequency and intensity of extreme weather events have increased in most parts of the world including Canada because of global warming. The global warming in Canada is about double the magnitude of global warming; therefore, policymakers are concerned about the potential significant impact of the weather catastrophes on the economy and financial sector. The purpose of this study is to explore the impact of weather catastrophes on the Canadian banking sector.

Design/methodology/approach

Using a sample of banking firms from Canada over the period 1988–2019, the present study estimates different econometric techniques to investigate the impact of weather catastrophes on the risk and performance of Canadian banks.

Findings

Analyses of the study do not find a significant impact of the weather catastrophes on the performance of the Canadian banks; however, it has helped banks to lower their risk level and improve stability due to proactive risk management. The findings of this study are not consistent with concerns of the policymakers about climate risk to the Canadian bank sector. More sector-specific research and policy initiatives are recommended to minimize the future financial risk of the increased frequency and intensity of natural disasters.

Originality/value

The study contributes to support the notion that the climate risk of banks is protected with insurance and reconstruction activities provide more banking opportunities.

Details

Journal of Economic and Administrative Sciences, vol. 39 no. 2
Type: Research Article
ISSN: 2054-6238

Keywords

Article
Publication date: 18 December 2023

Yasir Ashraf and Mian Sajid Nazir

The income structure of banks has undergone a notable change in recent decades; therefore, non-interest-based activities have gained much attention. This paper aims to examine…

Abstract

Purpose

The income structure of banks has undergone a notable change in recent decades; therefore, non-interest-based activities have gained much attention. This paper aims to examine the impact of income diversification on bank performance in Pakistan.

Design/methodology/approach

A balanced panel data set of 20 Pakistani commercial banks is used from 2007 to 2020. The random effect model is employed to test the relationship between income diversification and financial performance.

Findings

The empirical results indicate a significant positive impact of income diversification of banks on risk-adjusted returns on assets and equity. Moreover, while banks' risk-adjusted profit performance improves with the increase in bank size, equity ratio and loan ratio, it deteriorates with high credit risk and technology. However, geographical diversification does not explain financial performance in all the risk-adjusted return on equity models. Among the macroeconomic factors, the interest rate influences bank risk-adjusted returns positively, whereas gross domestic product and inflation rate have a negative effect on banks' financial performance.

Originality/value

To the best of the author's knowledge, this study is the first to empirically investigate the relationships between income diversification and the risk-adjusted profits of Pakistani-listed commercial banks. This study has implications for regulators and policymakers of commercial banks.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2054-6238

Keywords

Article
Publication date: 24 March 2022

Ghulam Hussain, Mian Sajid Nazir, Muhammad Amir Rashid and Maheen Abdul Sattar

This study aims to examine the direct and indirect effects of supply chain resilience enablers on supply chain disruption orientation per supply chain resilience. It conjointly…

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Abstract

Purpose

This study aims to examine the direct and indirect effects of supply chain resilience enablers on supply chain disruption orientation per supply chain resilience. It conjointly examined the moderation of supply chain complexity on resilience enablers and supply chain resilience. It further detailed the conditional indirect effects of supply chain resilience enablers on supply chain disruption orientations via supply chain resilience at varying levels of supply chain complexity.

Design/methodology/approach

This study employed a time-lagged design (three-wave) and self-administered surveys to collect data from the supply chain managers of fast-moving consumer goods firms. A sample of 214 responses was used to test the hypothesized relationships.

Findings

The results showed that supply chain resilience significantly mediated on the relationship between supply chain resilience enablers and supply chain disruption orientation. Further, supply chain complexity positively moderated on supply chain resilience enablers and supply chain resilience. The results also supported the moderated mediated hypothesis.

Research limitations/implications

This study contributes to prevalent theory and practices in the wake of recent disruptions faced by the firms. It persuades the managers to emphasize on structuring resilient supply chain system to recover from the disruptions and accumulate and incorporate learning gained from the disruptions to strengthen the firm's response management system.

Originality/value

This study attempted to explore the underlying antecedents and consequences of supply chain resilience in Pakistan and established boundary condition effects of supply chain complexity on the proposed relationships. This research complemented and extended the conceits of resource-based and contingent resource-based views.

Details

Journal of Enterprise Information Management, vol. 36 no. 1
Type: Research Article
ISSN: 1741-0398

Keywords

Article
Publication date: 7 September 2021

Aisha Javaid, Mian Sajid Nazir and Kaneez Fatima

This paper contributes to the existing literature by extending the empirical work on the relationship between corporate governance and capital structure by analyzing the mediating…

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Abstract

Purpose

This paper contributes to the existing literature by extending the empirical work on the relationship between corporate governance and capital structure by analyzing the mediating role of cost of capital in the non-financial firms listed on the Pakistan Stock Exchange (PSX).

Design/methodology/approach

The sample for this study includes non-financial firms listed on the Pakistan Stock Exchange (formerly Karachi Stock Exchange) for the period of 2004–2016. Based on 1800 firm-year observations, three approaches of panel data analysis are applied for the step-wise analysis of the underlying study. Firstly, Pooled OLS is applied. Secondly, fixed and random effect panel regression followed by the Hausman test to check the unobservable individual heterogeneity of the data. Hausman test indicates that the fixed-effects model is the most appropriate model for the sample panel data.

Findings

The study's findings are that board size, board composition, CEO/Chair duality, institutional ownership and managerial ownership have statistically significant direct effect on the firm's financing decisions. However, CEO/Chair duality, institutional ownership and managerial ownership have significant indirect effect on firm's capital structure decisions. The interesting finding of the paper is on the evidence of mediating role of cost of capital in the nexus of corporate governance and capital structure. Moreover, some conventional determinants of capital structure, including the firm's size, asset structure of the firm, profitability, business risk and growth, are found as determinants of capital structure decisions of the firms.

Research limitations/implications

There are a few limitations to our study which could be addressed by upcoming research. We did not include all the four mechanisms of corporate governance including board structure, audit structure, compensation structure and ownership structure. However, we used only five important attributes including board size, board composition and CEO/Chair duality form board structure, managerial ownership and institutional ownership form ownership structure of corporate governance as our explanatory variables to examine their impact on the capital structure choices of the firms. Future studies may fill this research gap by involving some other attributes of corporate governance and analyzing their effectiveness and impact on value relevant capital structure decisions. Further, due to limited time and resources, we only tested the mediating role of cost of capital, hence, future researchers can analyze the mediating and moderating roles of different variables which may influence the relationship between corporate governance and capital structure choices of the firms.

Practical implications

The study has many valuable guidelines and practical implications for the financial managers of the corporations. Our results will facilitate the policymakers in setting their corporate governance policies and practices and making the value relevant capital structure decisions in compliance with the implications of corporate governance mechanism. In addition, our study provides the empirical evidence in accordance with the argument that good governance practices, particularly the voluntary disclosures by the firm may reduce the information asymmetry which, ultimately, reduces the agency cost and the cost of capital for the firm. However, while deciding the financial policy of the corporations, managers can use our findings in order to assess the effectiveness of corporate governance practices employed by the firm in achieving the optimal capital structure at which the weighted average cost of capital is at its minimum level.

Originality/value

This paper contributes to the literature by investigating the mediating role of the cost of capital in the relationship between corporate governance and capital structure decisions of the firms. This paper provides empirical evidence that corporate governance indirectly affects capital structure decisions through the mediating role of cost of capital.

Details

Journal of Economic and Administrative Sciences, vol. 39 no. 4
Type: Research Article
ISSN: 2054-6238

Keywords

Article
Publication date: 13 December 2022

Affaf Asghar Butt, Sayyid Salman Rizavi, Mian Sajid Nazir and Aamer Shahzad

This study aims to examine the effect of corporate derivatives use on firm value and how the corporate governance index modifies this relationship.

Abstract

Purpose

This study aims to examine the effect of corporate derivatives use on firm value and how the corporate governance index modifies this relationship.

Design/methodology/approach

The sample consists of 219 nonfinancial firms on the Pakistan Stock Exchange (PSX) from 2011 to 2019. The study used ordinary least square regression with year and industry dummies for estimations. Multiple estimation models such as fixed/random effect, Fama–MacBeth and two-stage least squares (2SLS) are used for robustness. Finally, the PROCESS macro tool is used to estimate the effect of moderating the role of corporate governance (CG) as robustness.

Findings

The findings show that derivatives use has an inverse influence on firm value. The firms did not use derivatives as a risk management tool but for speculation motives. However, the corporate governance index significantly weakens this relationship. However, strong governance forces the managers to use derivatives for hedging purposes. The firm-specific factors, including size, age, leverage, cash, financial distress cost, dividend and growth opportunities, also significantly influence firm value. The findings are robust to the other estimation models.

Research limitations/implications

The findings indicate that emerging economies like Pakistan are more prone to agency problems. The strong corporate governance structure helps firms turn the speculative motive of derivatives use into hedging purposes and mitigate the agency issues.

Practical implications

This empirical evidence suggests that good governance structures can help improve the impact of derivative usage on firm value.

Originality/value

To the best of the author's knowledge, this is the first study that examines the conditional role of corporate governance on the derivatives–value relationship from the viewpoint of agency problem/speculative motive.

Details

South Asian Journal of Business Studies, vol. 13 no. 2
Type: Research Article
ISSN: 2398-628X

Keywords

Article
Publication date: 21 June 2019

Mian Sajid Nazir, Javeria Mahmood, Fizza Abbas and Ayesha Liaqat

The upsurge of globalization has made investors cautious toward investing decisions, and, resultantly, sophisticated techniques of forecasting and analyzing the stock markets have…

Abstract

Purpose

The upsurge of globalization has made investors cautious toward investing decisions, and, resultantly, sophisticated techniques of forecasting and analyzing the stock markets have emerged. Particularly, this trend has gained momentum in emerging economies. One such trend is to overcome the investing risks associated with formation of rational bubbles. Bubbles are formed when asset prices inflate to a very high level temporarily, and they ultimately burst. Investors may take advantage of this short-lived phenomenon and gain high returns, but may also suffer as the entire investing value declines when the bubble bursts. The purpose of this paper is to identify rational bubbles in the emerging capital markets of South Asian region.

Design/methodology/approach

The monthly data have been obtained from June 1997 to February 2018 for Pakistan, Bombay, Dhaka and Colombo stock markets, and supremum-Augmented Dicky Fuller test developed by Phillips and Yu (2011) has been utilized to identify the rational bubbles.

Findings

The results revealed the presence of rational bubbles in South Asian equity markets. The current study is of significant nature for the facilitation of investors in future-making investing decisions concerning with the formation of rational bubbles.

Originality/value

Several studies have been conducted on stock markets of developed regions. Specific bubble episodes, which occurred previously, have helped the researchers and investors in gaining plenty of insights. A lot of studies have been conducted on the SAARC region as well. But they have used the conventional unit root test for bubble identification and not used as extensive data as, in this study, have been taken. This research is aimed to study equity prices of the four stock markets to establish the fact that if rational bubbles exist in the index, they are reflected in the returns or not.

Details

Journal of Economic and Administrative Sciences, vol. 36 no. 2
Type: Research Article
ISSN: 2054-6238

Keywords

Article
Publication date: 21 September 2010

Mian Sajid Nazir and Muhammad Shakeel Aslam

Academic dishonesty has been a matter of great concern in higher education for last few decades. The dishonest behavior of students at graduate and undergraduate level has become…

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Abstract

Purpose

Academic dishonesty has been a matter of great concern in higher education for last few decades. The dishonest behavior of students at graduate and undergraduate level has become a severe issue for education and business sectors, especially when the students exercise same dishonest practices at their jobs. The present research aims to address this matter by investigating the perceptions of students towards academic dishonesty and exploring the security and penalties for dishonest acts of students.

Design/methodology/approach

A well‐structured questionnaire was used to collect the data from 958 respondents studying at graduate and undergraduate levels in different Pakistani universities.

Findings

It has been found that students involve in academic dishonest acts more frequently about which they believe to be less severe. Moreover, they also suggested lower or no penalties for the same dishonest acts which are perceived as less severe.

Practical implications

The results provide a strong implication for academicians to develop the moralities and ethics in students so that institutions may provide ethically cultivated professionals to the business community.

Originality/value

The research paper is pioneer in its nature to explore the academic dishonest acts of students and their perceptions regarding some of the dimensions of academic dishonest and integrity in Pakistani university students.

Details

International Journal of Educational Management, vol. 24 no. 7
Type: Research Article
ISSN: 0951-354X

Keywords

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