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Article
Publication date: 27 May 2020

Nihar Ranjan Jena and Narayan Sethi

The purpose of this paper is to empirically examine the effectiveness of foreign aid in improving economic growth prospects in the South Asian region from 1996 to 2017.

Abstract

Purpose

The purpose of this paper is to empirically examine the effectiveness of foreign aid in improving economic growth prospects in the South Asian region from 1996 to 2017.

Design/methodology/approach

A sample of eight South Asian countries for the period 1996–2017 is being considered for this study. This study uses various econometrics tools such as Pedroni and Johansen–Fisher panel cointegration test, panel fully modified ordinary least square and panel dynamic ordinary least square (PDOLS) to ascertain the long-run and short-run dynamics among the variables under consideration.

Findings

The empirical results found that long-run, as well as the short-run relationship, exist among foreign aid, economic growth, investment, financial deepening, price stability and trade openness of the South Asian economies. The authors also found unidirectional causality running from foreign aid to economic growth. Both the long-run relationship as well as short-run causality between foreign aid and economic growth is unequivocally positive.

Originality/value

This study uses a dynamic macroeconomic modeling framework to assess the impact of aid flows on economic growth in South Asian economies. Taking into account the diversity of level of growth experienced by the eight countries in the Asian region, this study uses an appropriate regression technique, i.e. PDOLS whose results are robust. Therefore, the policymakers in these countries are well-advised to implement suitable policy measures to ensure optimum utilization of foreign capital resources garnered by way of receipt of foreign aid and build on for stronger future economic growth.

Details

South Asian Journal of Business Studies, vol. 10 no. 1
Type: Research Article
ISSN: 2398-628X

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Article
Publication date: 12 November 2019

Nihar Ranjan Jena and Narayan Sethi

The purpose of this paper is to empirically investigate whether inward remittance leads to export performance in selected South Asian economies over the time period of 1993–2017.

Abstract

Purpose

The purpose of this paper is to empirically investigate whether inward remittance leads to export performance in selected South Asian economies over the time period of 1993–2017.

Design/methodology/approach

The stationarity of the variables is checked by Levin, Lin and Chu t, Breitung t-stat., Im, Pesaran and Shin W-stat., ADF–Fisher and Philips–Perron–Fisher panel unit root tests. Panel Granger Causality is used to verify the short-run causality. Pedroni’s, Kao’s and Johansen–Fisher panel cointegration approaches are employed to examine the long-run relationship among the variables. Panel VECM is used to confirm the existence of a long-run relationship among the variables.

Findings

Panels FMOLS and DOLS show that remittance inflows have negatively impacted the export performance of the selected South Asian countries during the study period. Granger Causality and VECM test confirm the existence of short-run and long-run relationship among the variables. The authors conclude that inward remittance is affecting export performance negatively during the study period. Furthermore, inward remittances occupy a major source of development finance for selected South Asian countries.

Originality/value

The study uses a dynamic macroeconomic modeling framework to assess the inward remittance on export performance in South Asian countries. Taking into account the diversity of the level of growth experienced by the five countries in the Asian region, the study uses an appropriate regression technique, i.e. panel dynamic OLS whose results are robust. As exports are a proven way to further economic growth, this study fills a vital gap in the literature by ascertaining the degree of impact of remittances in influencing outbound exports from the South Asian region.

Details

International Journal of Social Economics, vol. 47 no. 2
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 6 January 2006

Rashid Ameer

This paper reappraises the global and regional integration for 6 Southeast Asian stock markets. A time‐varying analysis based on Barari (2004) suggests that Malaysia, South

Abstract

This paper reappraises the global and regional integration for 6 Southeast Asian stock markets. A time‐varying analysis based on Barari (2004) suggests that Malaysia, South Korea and Thailand have shown significant movement towards international financial integration.The estimates based on TARCH model imply significant support for returns and volatility spillover effects from the World as well as regional markets to all the stock markets except Pakistan. The stock market liberalization measures such as First Country Fund, First Depository Receipt, and First Cross Listing appeared to have induced more positive return spillover effects from the World to India, Indonesia and South Korea. These results have policy implication for the international portfolio investors in sense that portfolio diversification advantages are rather less in Malaysia, South Korea compared to India and Pakistan which still provide higher returns through portfolio diversification.

Details

Journal of Financial Reporting and Accounting, vol. 4 no. 1
Type: Research Article
ISSN: 1985-2517

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Article
Publication date: 6 March 2017

Bishnu Kumar Adhikary

The purpose of this paper is to investigate the macroeconomic determinants of foreign direct investment (FDI) for the top five South Asian economies, namely, Bangladesh…

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Abstract

Purpose

The purpose of this paper is to investigate the macroeconomic determinants of foreign direct investment (FDI) for the top five South Asian economies, namely, Bangladesh, India, Pakistan, Sri Lanka, and Nepal, and to examine whether these factors are the same for each.

Design/methodology/approach

This study employs fully modified ordinary least squares and two-stage least squares estimation methods.

Findings

This study shows that South Asian economies have a number of FDI determinants in common. For example, market size and human capital are the two most common factors attracting FDI in each country (except for Nepal, which revealed a negative correlation between FDI and market size). Other factors, such as infrastructure, domestic investment, lending rates, exchange rates, inflation, financial stability/crisis, and stock turnover entered into regression with both positive and negative signs, thereby indicating that the underlying theories on FDI do not provide a clear prediction of the direction of the effect of a particular variable on FDI.

Research limitations/implications

This paper studied the effects of demand-side factors on FDI. A comparative study of the supply-side factors may add further knowledge.

Practical implications

This paper provides evidence to show that the determinants of FDI are indeed country-specific. Thus, to design a suitable FDI policy, it would not be wise to solely rely on other economies’ FDI experiences.

Originality/value

This paper provides updated evidence on factors that are essential to promoting or deterring FDI in South Asian economies.

Details

South Asian Journal of Business Studies, vol. 6 no. 1
Type: Research Article
ISSN: 2398-628X

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Book part
Publication date: 19 December 2016

Huma Kidwai and Monisha Bajaj

This chapter reviews the extent of influence new regionalism has had on the development of the education sector in South Asia. The history of South Asian Association of…

Abstract

This chapter reviews the extent of influence new regionalism has had on the development of the education sector in South Asia. The history of South Asian Association of Regional Cooperation (SAARC) development, and its regional state-supported initiative, the South Asian University, reflect a multitude of local challenges to effective regionalization for cross-national educational development. The chapter describes and distinguishes the various forms of regional efforts for cooperation and integration among government actors, nongovernmental organizations, and local activist groups and forums, to chart certain key regional efforts to consolidate intraregionalism as well as establish interregional relations of educational development and policy with countries of sub-Saharan African region. It utilizes the transnational advocacy networks framework to understand and interpret diverse manifestations of interregional cooperation between nonstate partners in South Asia and sub-Saharan Africa.

Details

The Global Educational Policy Environment in the Fourth Industrial Revolution
Type: Book
ISBN: 978-1-78635-044-2

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Article
Publication date: 4 June 2019

Bijoy Rakshit and Samaresh Bardhan

Bank competition and financial stability are often cited as important drivers of economic growth. Bank competition plays a very significant role in enhancing the…

Abstract

Purpose

Bank competition and financial stability are often cited as important drivers of economic growth. Bank competition plays a very significant role in enhancing the efficiency and determining the stability of a financial system. However, a question of interest is whether bank competition enhances or hindrances the economic growth of a country. The purpose of this paper is to investigate the role of bank competition and financial stability on economic growth for selected South Asian economies over the period 1997–2016.

Design/methodology/approach

To investigate whether bank competition enhances or hinders economic growth, the author applies a two-step estimation technique. First, the author estimates bank competition using the Lerner index and adjusted Lerner index and, second, examines the joint effect of bank competition and financial stability on economic growth applying both panel regression model and system GMM techniques.

Findings

Empirical findings reveal that the banking sector in South Asian economies is competitive as indicated by the estimated values of Lerner and adjusted Lerner index. Moreover, the joint effect defined by the interaction between banking competition and banking stability also reveals a positive and significant impact on economic growth. This finding implies that both banking competition and banking stability are significant long-term determinants of economic growth in South Asian economies.

Practical implications

This paper suggests flexible banking regulation policies such as low net interest rate margins, lesser activity restrictions and entry of foreign banks along with few contestability measures to increase bank competition in South Asian countries. This is because as higher the competition, greater is the chance for efficient allocation of resources and hence economic growth.

Originality/value

This paper is the first of its kind that considers the joint role of bank competition and financial stability on economic growth. The application of a semi-parametric approach in the estimation of marginal cost is also a unique contribution to empirical literature.

Details

South Asian Journal of Business Studies, vol. 8 no. 2
Type: Research Article
ISSN: 2398-628X

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Article
Publication date: 25 September 2019

Rakesh Kumar

The purpose of this paper is to test the dynamic linkages among the stock markets of four South Asian countries (India, Pakistan, Bangladesh and Sri Lanka) in the backdrop…

Abstract

Purpose

The purpose of this paper is to test the dynamic linkages among the stock markets of four South Asian countries (India, Pakistan, Bangladesh and Sri Lanka) in the backdrop of trade interdependency.

Design/methodology/approach

Listed indices are used to serve the proxy of stock markets of four countries for the period: January 2000–December 2018. The study uses the autoregressive distributed lag model and Granger causality techniques in multivariate frameworks while focusing on intraregional trade as an exogenous factor for testing the long- and short-run causality in the given data set, hence raising the quality of statistical inference.

Findings

The results highlight that India and Pakistan are net exporters to the South Asian region, while Bangladesh and Sri Lanka are net importers from the region. While testing the stock markets linkages, the expanded intraregional trade volumes (exports plus imports) have occurred with the significant cointegration of stock markets of India and Pakistan with the other stock markets in the long run. In the short run, the stock markets of India, Pakistan and Sri Lanka report bidirectional causality without having significant spillovers of intraregional trade on the stock prices.

Research limitations/implications

The study relies on the multivariate techniques with stock prices and regional trade share as the exogenous variables. Further the regulatory, political and economic conditions of sample countries are fundamentally different which in turn affect their degree of trade interdependency and integration between the stock markets.

Practical implications

Nonsignificant cointegration of the stock markets of Sri Lanka and Bangladesh highlights the possibility of portfolio diversification in the long run, while the significant bidirectional causalities between the stock markets highlight the lesser degree of portfolio diversifications in the short run.

Originality/value

Pioneer efforts are made to examine the dynamic linkages between the South Asian stock markets while focusing on regional trade interdependency. The results provide new insight in the dynamics of stock returns of South Asian stock markets in the backdrop of intraregional trade.

Details

International Journal of Emerging Markets, vol. 15 no. 3
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 13 November 2017

Irfan Ullah and Muhammad Arshad Khan

The purpose of this paper is to examine the determinants of foreign direct investment (FDI) by focusing on institutional and economic factors among South Asian Association…

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1846

Abstract

Purpose

The purpose of this paper is to examine the determinants of foreign direct investment (FDI) by focusing on institutional and economic factors among South Asian Association for Regional Cooperation (SAARC), Association of South East Asian Nations (ASEAN) as well as Central Asian countries over the period 2002-2014.

Design/methodology/approach

The generalized method of moments technique is employed for analyzing the impact of institutional quality on FDI inflow by controlling for the effect of market size, domestic investment and labor force.

Findings

The authors found large variations in terms of the impact of institutional and economic variables in regards to FDI in the SAARC, Central Asian and ASEAN regions. The results reveal that real GDP, domestic investment and economic freedom index have a positive and significant effect on FDI inflows in the SAARC region, while governance index and labor force have a negative impact on FDI inflows. In Central Asia, the real GDP, domestic investment and governance index are positively associated with FDI inflows, whereas the effect of economic freedom index on FDI is negative as well as insignificant. Apart from the GDP, other variables such as labor force, domestic investment, governance and economic freedom indices influence FDI positively in the ASEAN region. It is worth mentioning here that domestic investment produces positive effect on FDI inflows in all the regions. On the whole, the authors may conclude that institutional factors play an important role in attracting FDI inflows in the ASEAN region as compared to Central Asian and SAARC regions.

Originality/value

A limited research work is available that could help in identifying the role of institutional and economic factors simultaneously in attracting FDI in the SAARC, Central Asian and ASEAN regions.

Details

Journal of Economic Studies, vol. 44 no. 6
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 17 August 2012

Shaista E. Khilji and Candice D. Matthews

The purpose of this paper (editorial) is to take a stock of the research focused upon South Asia, in order to evaluate if it has produced useful results, and to discuss…

Abstract

Purpose

The purpose of this paper (editorial) is to take a stock of the research focused upon South Asia, in order to evaluate if it has produced useful results, and to discuss its future directions as per the scope and mission of the South Asian Journal of Global Business Research. In view of pleas for greater attention to context effects, the authors use the concept of contextualization as the basis for analysis.

Design/methodology/approach

A qualitative content analysis of research published in 21 top‐tier business journals is employed, including a total of 96 articles focusing upon South Asia or any South Asian country.

Findings

A contextualization typology is presented, related to purpose (whether context guides the research or not) and methodology (whether new or old framework and/or scales are used) and continuum of attention to contextualizations for hypotheses and/or research questions, and research findings in order to discuss the status of published South Asian research.

Research limitations/implications

The authors discuss limitations of their philosophical underpinning and epistemological standing that have influenced their analytical approach and results.

Originality/value

This paper presents a contextualization typology as a starting point to discuss contextualization in international business theory and practice. The paper also provides directions for future research for scholars interested in South Asian research.

Details

South Asian Journal of Global Business Research, vol. 1 no. 2
Type: Research Article
ISSN: 2045-4457

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Book part
Publication date: 23 December 2010

Pawan Adhikari and Frode Mellemvik

Purpose – This empirical article aims at studying whether, how, and to what extent the South Asian countries have or are planning to move in the International Public…

Abstract

Purpose – This empirical article aims at studying whether, how, and to what extent the South Asian countries have or are planning to move in the International Public Sector Accounting Standards (IPSASs) direction.

Design/methodology/approach – By applying the institutional perspectives, the article seeks to explore the roles and contributions of international financial institutions in the dissemination of public sector accounting reform ideas, particularly IPSASs ideas in South Asia. Document search represents the major method of collecting data for this study.

Findings – The present article demonstrates that the majority of the South Asian countries have envisaged the adoption of the cash basis IPSAS as a way forward in order to implement accrual accounting. International financial institutions have seemingly created a myth in the region that accrual accounting cannot be introduced without first complying with the cash basis IPSAS. However, the countries’ efforts are to a large extent directed at adapting rather than adopting IPSASs in all material respects. In relation to this, the article suggests that the acceptance of IPSASs in South Asia is better understood in terms of legitimacy.

Research limitations/implications – It is beyond the scope of this article to cover the ongoing public sector accounting reforms in South Asia other than IPSASs reforms as well as to reveal accounting changes at other levels than central government level.

Practical implications – The article raises doubts as to whether and to what extent the cash basis IPSAS will help public sector management reforms in South Asia.

Originality/value – Given the paucity of consistent research efforts on the topic in Western English language literature, the present article strives to bring ongoing IPSASs reforms in South Asia into the international arena. The article also contributes to the growing body of the comparative public sector accounting research by presenting the similarities and differences in government accounting reforms, particularly IPSASs reforms, in South Asia.

Details

Research in Accounting in Emerging Economies
Type: Book
ISBN: 978-0-85724-452-9

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