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1 – 10 of over 2000
Article
Publication date: 10 August 2018

Somesh K. Mathur and Abhishek Shekhawat

This paper aims to investigate the determinants of bilateral exports of India to the USA by taking the non-linearity issue in export demand equations which is neglected so far in…

Abstract

Purpose

This paper aims to investigate the determinants of bilateral exports of India to the USA by taking the non-linearity issue in export demand equations which is neglected so far in the empirical work. The study tries to know the reaction of change in exports to exchange rate changes in a non-liner fashion. For this purpose, non-linear autoregressive distributed lag (NARDL) bounds testing approach of Shin et al. (2011) has been used. This approach allows testing for non-linearities both in the short and long run, which might give indications of strategic pricing and non-linearities in exchange rate. The empirical analysis is carried out for bilateral export demand relationships of India with the USA for the period from January 1993 until December 2013. The overall results show that exports are determined in the long run by foreign demand, exchange rates and relative prices. The assumed linearity in export demand functions might be too restrictive. Thereby, the one threshold model that distinguishes exchange rate effects between appreciations and depreciations delivers plausible results. If exchange rate non-linearities are detected, it would seem that exports respond stronger to appreciations than to depreciations. A reason for this might be that firms perform strategic pricing in international trade to gain or maintain market shares.

Design/methodology/approach

The paper uses the newly developed non-linear ARDL framework of Shin et al. (2011) to investigate whether there are non-linearities with respect to the exchange rate for India’s exports to the USA. One of the important features of this framework is that it is free from unit root pre-testing and can be applied regardless of whether variables are I(0) or I(1). In addition, ARDL and NARDL technique efficiently determines the cointegrating relation in small sample. The short-run and long-run parameters with appropriate asymptotic inferences can be obtained by applying OLS to NARDL with an appropriate lag length. Following is the NARDL representation of equation 4(a) and 4(b). For brevity, this is illustrated for 4(a) only, where is the first difference operator, P is the drift component and it is the white noise residual, the coefficients ?_1 to ?_4 represent the long-run relationship, whereas remaining expressions with summation sign represent the short-term dynamics of the model. This equation nests the linear ARDL model presented in Pesarean et al. (2001) for the case of d_k^+=d_k^-and ?_2=?_3for all k. Thus, equation is less restrictive than a linear model. For this test, as its distribution is non-standard, Pesarean et al. (2001) tabulate the critical values. The bound test is used to examine the existence of the long-run relationship among the variables in the system. This test is based on Wald/F-statistic and follows a non-standard distribution. To check whether a cointegrating relationship exists, one has to test the null hypothesis ?_1=?_2=?_3=?_4 = 0 in the equation. Pesarean et al. (2001) provide two sets of critical values in which lower critical bound assumes that all the variables in the ARDL are I(0) and upper critical bound assumes I(1). The null hypothesis of cointegration is rejected if the calculated F-statistics is greater than the upper bound critical values. If the F-statistics is below than the lower critical bound, then null hypothesis cannot be rejected; this indicates no cointegration among the variables. If it lies within the lower and upper bounds, the result is inconclusive. After examining the cointegration, long-run coefficients are calculated by estimating the model with the appropriate lag orders based on the Schwarz Information Criteria (SIC). Further, the short-run dynamics of the model is also analyzed by using unrestricted error correction model based on the assumption made by Pesarean et al. (2001). Thus, the error correction version of the NARDL model pertaining to the central export equation can be expressed as: 10; 10, where ? is the speed of adjustment parameter, and EC is the residuals that are obtained from the estimated cointegration model of equation 4(a). The EC term is expressed as 10; 10, where are the OLS estimators obtained from the equation (5a). The coefficients of the lagged variables provide the short-run dynamics of the model covering the equilibrium path. The error correction coefficient ( ) is expected to be less than zero, and its significant value implies the cointegration relation among the variables. Finally, various tests such as serial correlation, functional form, normality and heteroskedasticity have been conducted to check the performance of the model.

Findings

Many empirical studies have estimated the elasticities of different final export demand components with respect to the exports because of their importance in trade policy formulation. But all the work has accounted only linearity in the exchange rate in export demand equation. Hence, in this paper, we tried to estimate non-linearities in export demand equation. The study fills the gap in the literature by improving on existing literature with the incorporation of the newly developed NARDL approach of Shin et al. (2011). This approach allows testing for non-linearities both in the short- and in the long run which might give indications of strategic pricing and non-linearities in exchange rate. The empirical analysis is carried out for bilateral export demand relationships of India with the USA for the period from January 1993 until December 2013. The bound test shows that there exists cointegration among the variables. Results show that exports are determined in the long run by foreign demand, exchange rates and relative prices. The long-run coefficients have got the expected sign and are of reasonable magnitude and statistically significant. Regarding non-linearities, the results show that assuming linearity in export demand functions might be too restrictive. Thereby, the one threshold model that distinguishes exchange rate effects between appreciations and depreciations deliver plausible results. If exchange rate non-linearities are detected, it seems that exports respond stronger to appreciations than to depreciations. A reason for this might be that firms perform strategic pricing in international trade to gain or maintain market shares.

Originality/value

The originality of this paper lies in the fact that it applies NARDL approach to Indian trade data (export demand) and analyzes the asymmetrical and non-linear impact of exchange rate changes on Indian exports.

Details

Studies in Economics and Finance, vol. 38 no. 1
Type: Research Article
ISSN: 1086-7376

Keywords

Article
Publication date: 15 February 2022

Giuseppe Marzo and Stefano Bonnini

This paper aims to address empirical analyses of the association of the VAIC and its components with firms’ market and financial performance, demonstrating that the ill definition…

Abstract

Purpose

This paper aims to address empirical analyses of the association of the VAIC and its components with firms’ market and financial performance, demonstrating that the ill definition of variables and constructs is responsible for a non-linearity concealed in the VAIC formula between two of its components (the Structural Capital Efficiency and the Human Capital Efficiency).

Design/methodology/approach

Through a conceptual analysis the paper identifies and formalises the non-linearity concealed in the VAIC formula and clarifies the relevant issues through an empirical analysis of a sample of Italian listed companies.

Findings

The paper finds that the non-linearity hidden in the VAIC formula should lead scholars to completely revise the ways they test the association of the VAIC and the market and financial performance of the firm. Useful insights are also provided for scholars interested in investigating the role of human capital, for those involved in analysing the interrelations among capitals through the introduction of interaction terms in their regression models and for researchers proposing modified versions of the VAIC. Practitioners could benefit from the paper as the non-linearity here discovered leads to a substantial of the decision-making based on the VAIC.

Originality/value

The paper offers new insights into analyses using the VAIC as it uncovers a non-linearity hidden in the VAIC, which has hitherto not been reported in the literature. The existence of this non-linearity has substantive implications for previous and future research in this domain.

Details

Measuring Business Excellence, vol. 27 no. 1
Type: Research Article
ISSN: 1368-3047

Keywords

Article
Publication date: 13 April 2018

Emmanuel Joel Aikins Abakah, Paul Alagidede, Lord Mensah and Kwaku Ohene-Asare

The purpose of this paper is to re-examine the weak form efficiency of five African stock markets (South Africa, Nigeria, Egypt, Ghana and Mauritius) using various tests to assess…

Abstract

Purpose

The purpose of this paper is to re-examine the weak form efficiency of five African stock markets (South Africa, Nigeria, Egypt, Ghana and Mauritius) using various tests to assess the impact of non-linearity effect and thin trading which are prevalent in African markets on market efficiency.

Design/methodology/approach

The weekly returns of S&P/IFC return indices for five African countries over the period 2000-2013 were obtained from DataStream and analyzed. The study adopted the newly developed Non-Linear Fourier unit root test advanced by Enders and Lee (2004, 2009) which allows for an unknown number of structural breaks with unknown functional forms and non-linearity in data generating process of stock prices series to test the Random Walk Hypothesis (RWH) for the five markets, and an augment regression model.

Findings

In light of the empirical evidence the author(s) using Non-linear Fourier Unit Root Test only fail to reject the RWH for South Africa, Nigeria and Egypt leading to the conclusion that these markets follow the RWH and weak-form efficient whilst Ghana and Mauritius are weak-form inefficient. Besides, evaluating non-linear models without adjusting for thin trading effect shows that, South Africa and Ghana markets are weak-form efficient while Nigeria, Egypt and Mauritius are not. However, after accounting for thin trading effect, the author(s) find that South Africa and Egypt markets follow the RWH. The findings imply that market efficiency results depend on the methodology used.

Originality/value

This paper provides further evidence on stock market efficiency in emerging markets. The finding suggests that thin trading and non-linearity effect influences markets efficiency tests in African stock markets. Thus, recent structural adjustment and liberalization policies have not enhanced stock market operations in Africa. This paper therefore has implications for policy makers and international investors.

Details

International Journal of Managerial Finance, vol. 14 no. 3
Type: Research Article
ISSN: 1743-9132

Keywords

Article
Publication date: 31 December 2020

J.I. Ramos

The purpose of this paper is to determine both analytically and numerically the kink solutions to a new one-dimensional, viscoelastic generalization of Burgers’ equation, which…

Abstract

Purpose

The purpose of this paper is to determine both analytically and numerically the kink solutions to a new one-dimensional, viscoelastic generalization of Burgers’ equation, which includes a non-linear constitutive law, and the number of kinks as functions of the non-linearity and relaxation parameters.

Design/methodology/approach

An analytical procedure and two explicit finite difference methods based on first-order accurate approximations to the first-order derivatives are used to determine the single- and double-kink solutions.

Findings

It is shown that only two parameters characterize the solution and that the existence of a shock wave requires that the (semi-positive) relaxation parameter be less than unity and the non-linearity parameter be less than two. It is also shown that negative values of the non-linearity parameter result in kinks with a single inflection point and strain and dissipation rates with a single relative minimum and a single, relative maximum, respectively. For non-linearity parameters between one and two, it is shown that the kink has three inflection points that merge into a single one as this parameter approaches one and that the strain and dissipation rates exhibit relative maxima and minima whose magnitudes decrease and increase as the relaxation and nonlinearity coefficients, respectively, are increased. It is also shown that the viscoelastic generalization of the Burgers equation presented here is related to an ϕ8−scalar field.

Originality/value

A new, one-dimensional, viscoelastic generalization of Burgers’ equation, which includes a non-linear constitutive law and relaxation is proposed, and its kink solutions are determined both analytically and numerically. The equation and its solutions are connected with scalar field theories and may be used to both studies the effects of the non-linearity and relaxation and assess the accuracy of numerical methods for first-order, non-linear partial differential equations.

Details

International Journal of Numerical Methods for Heat & Fluid Flow, vol. 31 no. 9
Type: Research Article
ISSN: 0961-5539

Keywords

Article
Publication date: 2 October 2017

Victor Rizov

The purpose of this paper is to perform a theoretical analysis of delamination fracture behaviour of the Crack Lap Shear layered beam configuration taking into account the…

Abstract

Purpose

The purpose of this paper is to perform a theoretical analysis of delamination fracture behaviour of the Crack Lap Shear layered beam configuration taking into account the material non-linearity. A delamination crack located arbitrarily along the beam height was considered in this study.

Design/methodology/approach

The beam mechanical behaviour was described by using the Ramberg-Osgood stress-strain relation. Fracture was analysed by applying the J-integral approach. Besides by using symmetric Ramberg-Osgood stress-strain curve, fracture was investigated also by Ramberg-Osgood stress-strain curve that is not symmetric with respect to tension and compression. The J-integral solutions were verified by performing elastic-plastic analyses of the strain energy release rate.

Findings

The effects of crack location and material properties on the non-linear fracture behaviour were evaluated. It was found that the material non-linearity leads to increase of the J-integral values. Therefore, the material non-linearity has to be taken into account in fracture mechanics based safety design of structural members composed by layered materials. The analytical solutions derived are very useful for parametric investigations of delamination fracture with considering the material non-linearity. The results obtained can be applied for optimisation of the beam structure with respect to fracture performance.

Originality/value

The present study contributes for the understanding of delamination fracture in layered beams that exhibit non-linear material behaviour.

Details

International Journal of Structural Integrity, vol. 8 no. 5
Type: Research Article
ISSN: 1757-9864

Keywords

Article
Publication date: 4 March 2014

H.C. Garg and Vijay Kumar

The changing technological scenario necessitated hybrid journal bearings to operate under severe conditions of heavy load and high speed resulting into temperature rise of the…

Abstract

Purpose

The changing technological scenario necessitated hybrid journal bearings to operate under severe conditions of heavy load and high speed resulting into temperature rise of the lubricant fluid-film and bearing surface. To predict the performance of a bearing realistically, theoretical model must consider the combined influence of the rise of temperature and non-Newtonian behavior of the lubricant. The aim of the present paper is to study the effect of viscosity variation due to temperature rise and non-Newtonian behavior of the lubricant on performance of constant flow valve compensated multiple hole-entry hybrid journal bearings.

Design/methodology/approach

Finite element method has been used to solve Reynolds equation along with restrictor flow equation, 3D energy equation and 3D conduction equation using suitable iterative technique. The non-Newtonian lubricant has been assumed to follow cubic shear stress law.

Findings

The thermohydrostatic rheological performances of symmetric and asymmetric hole-entry hybrid journal bearing configurations are studied. The computed results illustrate that variation of viscosity due to rise in temperature and non-Newtonian behavior of the lubricant affects the performance of hole-entry hybrid journal bearing system quite significantly.

Originality/value

In the present work, the influences of the viscosity variation due to temperature rise and non-Newtonian behavior of the lubricant on the performance characteristics of non-recessed hole-entry hybrid journal bearing with symmetric and asymmetric configurations compensated with constant flow valve restrictors have been investigated for generating the design data to be used by bearing designer. The design data computed in the present thesis are a contribution in field of knowledge of bearing design.

Details

Industrial Lubrication and Tribology, vol. 66 no. 2
Type: Research Article
ISSN: 0036-8792

Keywords

Article
Publication date: 1 June 2015

Mark J. Holmes and Nabil Maghrebi

The purpose of this study is to investigate nonlinearities in the behavior of investment expenditure. Conventional wisdom suggests that Tobin’s Q criterion is an important…

2035

Abstract

Purpose

The purpose of this study is to investigate nonlinearities in the behavior of investment expenditure. Conventional wisdom suggests that Tobin’s Q criterion is an important explanation of investment behaviour that bridges the financial and real sides of the economy. However, the empirical evidence in support of Q as a means of explaining aggregate business investment is rather weak. We answer a number of questions about the relationship between investment expenditure and Q. In particular, is the relationship governed by non-linearities? If so, what is the nature of the non-linearities present?

Design/methodology/approach

The rationale for paying closer attention to non-linearities is based on the presence of information asymmetries and possible dependence of adjustments on non-linearities with respect to factors such as fixed costs, threshold effects and irreversibility, which are entertained in the investment literature. Using the non-linear vector error-correction model procedure advocated by Hansen and Seo, we show that in the context of the US economy, investment has a long-run relationship with Q that is based on threshold error correction.

Findings

There are asymmetries present with respect to error correction or the speed of adjustment towards long-run equilibrium. We find that investment expenditure only responds significantly to long-run disequilibrium from Q during a particular regime. Such a regime is characterised by long-run disequilibrium based on high or rising investment expenditure compared with a relatively weak stock market.

Originality/value

The authors provide new insights into the relationship between Tobin’s Q and real investment. In contrast to previous work, they find that error correction based on the adjustment of real investment is regime-specific and function of the size of departures from long-run equilibrium. The tests also allow for the identification of periods when error correction has occurred. Not only are these insights significant for future research on financial crises, market volatility and the impact of debt, but for policymaking purposes as well.

Details

Studies in Economics and Finance, vol. 32 no. 2
Type: Research Article
ISSN: 1086-7376

Keywords

Article
Publication date: 4 April 2023

Hayelom Yrgaw Gereziher and Naser Yenus Nuru

This paper aims to examine the asymmetric effects of exchange rate shocks on inflation for a small open economy, namely South Africa, over the period 1970Q1–2020Q1.

Abstract

Purpose

This paper aims to examine the asymmetric effects of exchange rate shocks on inflation for a small open economy, namely South Africa, over the period 1970Q1–2020Q1.

Design/methodology/approach

A threshold vector autoregressive model that allows parameters to switch according to whether a threshold variable crosses an estimated threshold is employed to address the objective of this paper. The threshold value is determined endogenously using the Hansen (1996) test. Generalized impulse responses introduced by Koop et al. (1996) are used to study the effects of exchange rate shocks on inflation depending on their size, sign and timing to the inflation cycle. The authors also employed a Cholesky decomposition identification scheme to identify exchange rate shocks in the non-linear model.

Findings

The results show that there is a non-linearity effect of the exchange rate shock on inflation. In particular, the effects of 1 or 2 standard deviations of positive (appreciation) or negative (depreciation) exchange rate shock on inflation are small in the long run but a bit larger in the high inflation regime than the low inflation regime.

Originality/value

This paper contributes to the literature on the non-linear effects of exchange rate pass-through (ERPT) to inflation for Sub-Saharan African economies in general and the South African economy in particular by incorporating the size and timing of the exchange rate shocks to the inflation cycle.

Details

African Journal of Economic and Management Studies, vol. 14 no. 4
Type: Research Article
ISSN: 2040-0705

Keywords

Article
Publication date: 14 May 2018

Lingling Li, Yanfang Yang, Ming-Lang Tseng, Ching-Hsin Wang and Ming K. Lim

The purpose of this paper is to deal with the economic requirements of power system loading dispatch and reduce the fuel cost of generation units. In order to optimize the…

Abstract

Purpose

The purpose of this paper is to deal with the economic requirements of power system loading dispatch and reduce the fuel cost of generation units. In order to optimize the scheduling of power load, an improved chicken swarm optimization (ICSO) is proposed to be adopted, for solving economic load dispatch (ELD) problem.

Design/methodology/approach

The ICSO increased the self-foraging factor to the chicks whose activities were the highest. And the evolutionary operations of chicks capturing the rooster food were increased. Therefore, these helped the ICSO to jump out of the local extreme traps and obtain the global optimal solution. In this study, the generation capacity of the generation unit is regarded as a variable, and the fuel cost is regarded as the objective function. The particle swarm optimization (PSO), chicken swarm optimization (CSO), and ICSO were used to optimize the fuel cost of three different test systems.

Findings

The result showed that the convergence speed, global search ability, and total fuel cost of the ICSO were better than those of PSO and CSO under different test systems. The non-linearity of the input and output of the generating unit satisfied the equality constraints; the average ratio of the optimal solution obtained by PSO, CSO, and ICSO was 1:0.999994:0.999988. The result also presented the equality and inequality constraints; the average ratio of the optimal solution was 1:0.997200:0.996033. The third test system took the non-linearity of the input and output of the generating unit that satisfied both equality and inequality constraints; the average ratio was 1:0.995968:0.993564.

Practical implications

This study realizes the whole fuel cost minimization in which various types of intelligent algorithms have been applied to the field of load economic scheduling. With the continuous evolution of intelligent algorithms, they save a lot of fuel cost for the ELD problem.

Originality/value

The ICSO is applied to solve the ELD problem. The quality of the optimal solution and the convergence speed of ICSO are better than that of CSO and PSO. Compared with PSO and CSO, ICSO can dispatch the generator more reasonably, thus saving the fuel cost. This will help the power sector to achieve greater economic benefits. Hence, the ICSO has good performance and significant effectiveness in solving the ELD problem.

Details

Industrial Management & Data Systems, vol. 118 no. 4
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 1 February 1997

Amit Dutta and Donald W. White

In the inelastic stability analysis of plated structures, incremental‐iterative finite element methods sometimes encounter prohibitive solution difficulties in the vicinity of…

Abstract

In the inelastic stability analysis of plated structures, incremental‐iterative finite element methods sometimes encounter prohibitive solution difficulties in the vicinity of sharp limit points, branch points and other regions of abrupt non‐linearity. Presents an analysis system that attempts to trace the non‐linear response associated with these types of problems at minor computational cost. Proposes a semi‐heuristic method for automatic load incrementation, termed the adaptive arc‐length procedure. This procedure is capable of detecting abrupt non‐linearities and reducing the increment size prior to encountering iterative convergence difficulties. The adaptive arc‐length method is also capable of increasing the increment size rapidly in regions of near linear response. This strategy, combined with consistent linearization to obtain the updated tangent stiffness matrix in all iterative steps, and with the use of a “minimum residual displacement” constraint on the iterations, is found to be effective in avoiding solution difficulties in many types of severe non‐linear problems. However, additional procedures are necessary to negotiate branch points within the solution path, as well as to ameliorate convergence difficulties in certain situations. Presents a special algorithm, termed the bifurcation processor, which is effective for solving many of these types of problems. Discusses several example solutions to illustrate the performance of the resulting analysis system.

Details

Engineering Computations, vol. 14 no. 1
Type: Research Article
ISSN: 0264-4401

Keywords

1 – 10 of over 2000