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1 – 10 of over 78000Purpose: This chapter looks specifically at the sources of economic policy uncertainty in Nigeria, and discusses their impact on the Nigerian economy while drawing implications…
Abstract
Purpose: This chapter looks specifically at the sources of economic policy uncertainty in Nigeria, and discusses their impact on the Nigerian economy while drawing implications for Africa. It identifies factors that transmit uncertainty in economic policy in Nigeria and draw implications for other African countries.
Methodology: This chapter uses a literature survey methodology to identify the sources of economic policy uncertainty in Nigeria.
Findings: The identified sources of economic policy uncertainty in Nigeria are: the frequent changes in central bank policy, unexpected changes in government policy, political interference, unexpected fall in global oil price, recession, and unethical practices.
Implications: The implication of the study is that rising economic policy uncertainty in Nigeria can have a significant effect on the Nigerian economy and for connected African countries.
Originality: Previous studies have not examined the sources of economic policy uncertainty in Nigeria.
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Yusuf Bala Zaria and Jasman Tuyon
Apart from providing theoretical clarity, the present research aims to validate empirically that the EPU will be adversely affecting these key macroeconomic variables and that…
Abstract
Purpose
Apart from providing theoretical clarity, the present research aims to validate empirically that the EPU will be adversely affecting these key macroeconomic variables and that managing EPU matters for economic policymaking in Nigeria.
Design/methodology/approach
A dynamic autoregressive distributed lag regression model is employed to analyse the relationship from 1990 to 2020. Based on the theory of multiplier effect, the analysis could examine the positive and negative changes in policy uncertainty, as well as the reliability in macroeconomic activities such as unemployment, infrastructure development and foreign direct investment inflows.
Findings
The findings revealed EPU is cointegrated with the key economic variables in focus. Further, the negative impact of EPU on corporate investment in FDI and positive impact of EPU on unemployment confirm for both short and long-run. However, the impact of EPU on government investment in infrastructure development is found to be positive which does not confirm the expected hypothesis.
Practical implications
Dynamic relationship between policy uncertainty and macroeconomic activities in Nigeria seems to exist. Taking risky decisions has impact and causing a high unemployment rate, poor infrastructural development and lower foreign direct investment inflows in the country.
Originality/value
Policy uncertainty in Nigeria is determining. Despite that, very little research found that rising uncertainty issues may significantly affect unemployment, investment in infrastructure and foreign direct investment inflows adversely. Therefore, policy uncertainty is an open space for economic activities to thrive in Nigeria, especially unemployment.
Peer review
The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-08-2022-0555
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This study explores the response of consumer confidence in policy uncertainty in the Japanese context. The study also considers the dynamism of stock market behavior and financial…
Abstract
Purpose
This study explores the response of consumer confidence in policy uncertainty in the Japanese context. The study also considers the dynamism of stock market behavior and financial stress and its impact on consumer confidence, which has remained unaddressed in the literature. The role of these control variables has important implications for policy discussions, particularly when other countries can learn from Japanese experiences.
Design/methodology/approach
The nonlinear autoregressive distributed lag model postulated by Shin et al. (2014) was used for studying the asymmetric response of consumer confidence to policy uncertainty. This method has improved estimates compared to traditional linear cointegration methods.
Findings
The findings confirm the asymmetric impact of policy uncertainty on the consumer confidence index in Japan. The impact of the rise in policy uncertainty is greater than that of a fall in asymmetry on consumer confidence in Japan. Furthermore, the Wald test confirmed asymmetric behavior.
Originality/value
The contribution of this study is threefold. First, this study contributes to the extant literature by analyzing the asymmetric response of consumer confidence to policy uncertainty, controlling for both the financial stress and stock price indices. Second, to test the robustness of the exercise, the study utilized different frequencies of observations. Third, this study is the first to utilize the concept of Arbatli et al. (2017) to formulate a combined index of uncertainty based on economic policy uncertainty index, along with uncertainty indices such as fiscal, monetary, trade and exchange rate policies to study the overall impact of policy uncertainty.
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Cong Li, Gongxu Lan, Guitao Zhang, Peiyue Cheng, Yangyan Shi and Yangfei Gao
This paper aims to focus on corporate social responsibility in relation to economic policy uncertainty in mergers and acquisitions (M&A). The following questions are addressed…
Abstract
Purpose
This paper aims to focus on corporate social responsibility in relation to economic policy uncertainty in mergers and acquisitions (M&A). The following questions are addressed: How does policy uncertainty impact corporate M&A? Does social responsibility play a mediating role in this process? How does policy uncertainty affect corporate M&A through social responsibility?
Design/methodology/approach
This paper selects the major M&A events in China as the research object, and uses the Probit model to analyze the impact of policy uncertainty on M&A behavior and the business performance after the event, and further analyzes the internal mechanisms that cause these phenomena.
Findings
This paper shows that the higher the policy uncertainty, the lower the probability of a successful M&A, and the worse the business performance of the business after the event.
Originality/value
This paper provides useful reference for the study of M&A and social responsibility in different policy environments. At the same time, it provides direct empirical evidence to enhance the success rate of M&A.
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Ibrahim Shittu, Abdul Rais Abdul Latiff and Siti 'Aisyah Baharudin
The study investigates the effect of uncertainty on gender equality and examines the policies and institutional qualities that matter for mitigating the effect.
Abstract
Purpose
The study investigates the effect of uncertainty on gender equality and examines the policies and institutional qualities that matter for mitigating the effect.
Design/methodology/approach
The research employs a Generalized Method of Moment model and data from 45 developing countries covering the period between 2005 and 2021. The estimation covers a wide range of specifications.
Findings
The study finds that uncertainty undermines gender equality. However, economic management policies, public sector management and institutions and policies for social inclusion and equity directly promote gender equality, and indirectly moderate the effect of uncertainty on gender equality. The result also establishes the existence of a Gender Kuznets Hypothesis.
Originality/value
The study offers pioneering evidence on the nexus between uncertainty, gender equality, public policies and institutional qualities. It explores the direct and indirect relationship between these variables using 18 different measures. The study offers interesting insights and implications for the gender economics literature.
Peer review
The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-11-2023-0892
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This paper investigates the moderating role of uncertainty in the impact of monetary policy on bank liquidity creation.
Abstract
Purpose
This paper investigates the moderating role of uncertainty in the impact of monetary policy on bank liquidity creation.
Design/methodology/approach
Utilizing data from Vietnam spanning 2007–2022, the paper measures uncertainty in the banking industry through the dispersion of shocks to crucial bank-level variables and considers both interest rate- and quantity-based tools of the monetary policy regime. The study regresses economic models using different econometric methods, including the generalized method of moments (GMM) estimator in the main section and the least squares dummy variable corrected (LSDVC) estimator for the robustness check.
Findings
Monetary expansion enhances banks’ ability to create liquidity, affirming the existence of the bank liquidity creation channel. Further analyses suggest that monetary policy adjustments aimed at regulating bank liquidity creation may be less effective in the presence of higher uncertainty in the banking system. This observation holds for both interest rate- and quantitative-based monetary policy tools, emphasizing the functioning of the monetary policy transmission mechanism through bank liquidity creation and the mitigating effect of uncertainty.
Originality/value
This study contributes novel insights to the existing literature by presenting the first attempt to explore the dynamics of monetary policy transmission through the bank liquidity creation channel in the context of banking sector uncertainty. Moreover, our contribution extends to examining a multi-tool environment, incorporating both interest rate- and quantitative-based indicators.
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This chapter examines changes in US monetary policy uncertainty (ΔMPU) and fiscal policy uncertainty (ΔFPU) on stock returns while controlling for downside risk, lagged dividend…
Abstract
This chapter examines changes in US monetary policy uncertainty (ΔMPU) and fiscal policy uncertainty (ΔFPU) on stock returns while controlling for downside risk, lagged dividend yield, and time series patterns. Testing G7 markets consistently shows that both ΔMPU and ΔFPU have significant negative impacts on stock returns. Evidence shows that any downside risk, ΔMPU or ΔFPU in US market will soon be transmitted to G6 industrial markets and the impacts are extended to two months. These risk and uncertainty premiums should be priced in the stocks of the major industrial markets.
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Viput Ongsakul, Pandej Chintrakarn, Suwongrat Papangkorn and Pornsit Jiraporn
Taking advantage of distinctive text-based measures of climate policy uncertainty and firm-specific exposure to climate change, this study aims to examine the impact of…
Abstract
Purpose
Taking advantage of distinctive text-based measures of climate policy uncertainty and firm-specific exposure to climate change, this study aims to examine the impact of firm-specific vulnerability on dividend policy.
Design/methodology/approach
To mitigate endogeneity, the authors apply an instrumental-variable analysis based on climate policy uncertainty as well as use additional analysis using propensity score matching and entropy balancing.
Findings
The authors show that an increase in climate policy uncertainty exacerbates firm-specific exposure considerably. Exploiting climate policy uncertainty to generate exogenous variation in firm-specific exposure, the authors demonstrate that companies more susceptible to climate change are significantly less likely to pay dividends and those that do pay dividends pay significantly smaller dividends. For instance, a rise in firm-specific exposure by one standard deviation weakens the propensity to pay dividends by 5.11%. Climate policy uncertainty originates at the national level, beyond the control of individual firms and is thus plausibly exogenous, making endogeneity less likely.
Originality/value
To the best of the authors’ knowledge, this study is the first attempt in the literature to investigate the effect of firm-specific exposure on dividend policy using a rigorous empirical framework that is less vulnerable to endogeneity and is more likely to show a causal influence, rather than a mere correlation.
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Linh Thi My Nguyen and Phong Thanh Nguyen
In this paper, the authors examine the short-term and long-term impact of general economic policy uncertainty (EPU) and crypto-specific policy uncertainty on Bitcoin’s (BTC…
Abstract
Purpose
In this paper, the authors examine the short-term and long-term impact of general economic policy uncertainty (EPU) and crypto-specific policy uncertainty on Bitcoin’s (BTC) exchange inflows – a form of crypto investor behaviors that the authors expect to drive the cryptocurrency volatility.
Design/methodology/approach
The authors use an autoregressive distributed lag (ARDL), coupled with the bounds testing approach by Pesaran et al. (2001), to analyze a weekly dataset of BTC’s exchange inflows and relevant policy uncertainty indices.
Findings
The authors observe both short-term and long-term impacts of the crypto-specific policy uncertainty on BTC’s exchange inflows, whereas the general EPU only explains these inflows in a short-term manner. In addition, the authors find exchange inflows of BTC “Granger” cause its price volatility. Furthermore, the authors document a significant and relatively persistent response of BTC volatility to shocks to its exchange inflows.
Originality/value
This study’s findings offer significant contributions to research in policy uncertainty and investor behaviors.
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Kingstone Nyakurukwa and Yudhvir Seetharam
This study aims to investigate the dynamic interconnectedness of economic policy uncertainty (EPU), fiscal policy uncertainty (FPU) and monetary policy uncertainty (MPU) in four…
Abstract
Purpose
This study aims to investigate the dynamic interconnectedness of economic policy uncertainty (EPU), fiscal policy uncertainty (FPU) and monetary policy uncertainty (MPU) in four nations, the USA, Japan, Greece and South Korea, between 1998 and 2021.
Design/methodology/approach
To comprehend the cross-category/cross-country evolution of uncertainty connectedness, the authors use the conditional connectedness approach. By using an inclusive network, this strategy lessens the bias caused by omitted variables. The TVP-VAR method is advantageous as it eliminates outliers that may potentially skew the results and reduces the bias caused by picking arbitrary rolling windows.
Findings
Based on the findings, aggregate EPU is a net transmitter of policy uncertainties across all countries when conditional-country connectedness is used. MPU receives significantly more spillovers than FPU does across all countries, even though both are primarily recipients of uncertainties. The USA appears to be a transmitter of categorical spillovers before COVID-19, while Greece appears to be a net receiver of all category spillovers in terms of category-specific connectedness. The existence of extreme global events is also seen to cause an increase in category-specific and country-specific connectedness. Additionally, the authors report that conditional country-specific connectedness is greater than conditional category-specific connectedness.
Originality/value
This study expands existing literature in several ways. Firstly, the authors use a novel conditional connectedness approach, which has not been used to untangle cross-category/cross-country policy uncertainty connectedness. Secondly, they use the TVP-VAR approach which does not depend on rolling windows to understand dynamic connectedness. Thirdly, they use an expanded number of countries in their analysis, a departure from existing studies that have in most cases used two countries to understand categorical EPU connectedness.
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