scholarly journals How Consumer Confidence Affects the Impact of Housing and Stock Market Wealth on Consumption? Evidence from Asian Countries

2020 ◽  
Vol 10 (2) ◽  
pp. 99-109
Author(s):  
Heru Santoso ◽  
Takeshi Inoue
Keyword(s):  
Stock Market ◽  
Housing Market ◽  
Financial Sector ◽  
Wealth Effect ◽  
Income Level ◽  
Least Square ◽  
Consumer Confidence ◽  
Asian Countries ◽  
Financial Sector Development ◽  
The Impact

This study explores the effect of consumer confidence in the impact of housing market and stock market wealth on private consumption for a panel of 10 Asian countries. This study using quarterly data from the 1 st quarter of 2010 to the 4th quarter of 2017 and applies panel Fully Modified Ordinary Least Square (FMOLS) method to assess the long-term relationship between variables. The result shows that the inclusion of consumer confidence changes the previous impact of housing market wealth and stock market wealth on consumption. Particularly, the interaction between consumer confidence and housing market wealth has a positive and significant impact on consumption, which is different from the previous insignificant impact of housing market wealth on consumption. On the other hand, the interaction between consumer confidence and stock market wealth has a negative significant impact on consumption, which is different from the previous positive significant impact of stock market wealth on consumption. In addition, the supplementary findings of this study show (1) countries with higher financial sector development have stronger housing market and stock market wealth effect than countries with lower financial sector development and (2) countries with higher income level have stronger housing market and stock market wealth effect than countries with lower income level.

scholarly journals Can Financial Development Mitigate the Impact of Remittances on Real Exchange Rate Appreciation?

2019 ◽  
Vol 4 (2) ◽  
pp. 89-116
Author(s):  
Abubakar Lawan Ngoma ◽  
Normaz Wana Ismail
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Empirical Studies ◽  
Real Exchange Rates ◽  
Financial Sector ◽  
Asian Countries ◽  
The Real ◽  
Financial Sector Development ◽  
Long Run ◽  
The Impact

Remittances have been blamed for causing real exchange rate appreciation by raising the relative prices of nontraded goods and services in the recipient countries. However, empirical studies seeking to support this claim are lacking in Asia, despite the huge amount of remittances received by the region. In view of that, this paper used a panel dataset from eighteen remittance-recipient Asian countries during the period of 1981 – 2010 and Pooled Mean Group (PMG) estimator to examine the effect of remittances and financial sector development on real exchange rate. The paper, specifically, questions if the real exchange rate appreciation caused by the inflow of remittances varies with the degree of financial sector development in these countries. The paper finds that inflow of remittances has significant long-run impact on the appreciation of the real exchange rates in the remittance-recipient Asian countries. However, such effect of appreciation declines in countries with enhanced financial sector development.

The Impact Of Financial Sector Development On Economic Growth In The Middle East And North Africa

2019 ◽  
pp. 81
Author(s):  
محمد سعيد محمود بللور ◽  
عامر عبدالفتاح زكريا باكير
Keyword(s):  
Economic Growth ◽  
Middle East ◽  
North Africa ◽  
Financial Sector ◽  
Financial Sector Development ◽  
The Impact

Islamic calendar and stock market behaviour in India

2018 ◽  
Vol 45 (11) ◽  
pp. 1550-1566
Author(s):  
Dharani Munusamy
Keyword(s):  
Stock Market ◽  
Least Square Method ◽  
Least Square ◽  
Stock Market Returns ◽  
Content Type ◽  
Ordinary Least Square ◽  
Average Return ◽  
Year Effect ◽  
The Common ◽  
The Impact

Purpose The purpose of this paper is to examine the behavior of the stock market returns in the different days of the week and different months of the year in accordance with the Islamic calendar. Further, the study estimates the risk-adjusted returns to test the performance of the indices during the Ramadan and non-Ramadan days. Finally, the study investigates the impact of Ramadan on the returns and the volatility of the stock market indices in India. Design/methodology/approach Initially, the study applies the Ordinary Least Square method to test the day-of-the-week and the month-of-the-year effect of the common and Shariah indices. Next, the study employs the risk-adjusted measurement to examine the underperformance and over-performance of the indices for both the periods. Finally, the study estimates the GARCH (1,1) and GJR-GARCH (1,1) models to observe the impact of Ramadan on the returns and the volatility of the Shariah indices in India. Findings The study finds that an average return of the indices during the Ramadan days are higher than non-Ramadan days. Further, the average returns of the Shariah indices are significantly higher on Wednesday than other days of the week. In addition, the highest and significant mean returns and mean risk-adjusted returns of the indices during the Ramadan days are observed. Finally, the study finds an evidence of the Ramadan effect on the returns and volatility of the indices in India. Originality/value The study observes evidence that the Ramadan effect influences the Shariah indices, but not the common indices in the stock market of the non-Muslim countries. It indicates that the Ramadan creates the positive mood and emotions in the investors buying and selling activities. The study suggests that investors can buy the shares before Ramadan period and sell them during the Ramadan days to get an abnormal return in the emerging markets.

scholarly journals How Does Financial Sector Reacts After Special Events? An Event Study Analysis of Tunisia after the Revolution of 2011.

2014 ◽  
Vol 4 (2) ◽  
pp. 584-599
Author(s):  
Amira KADDOUR ◽  
Mourad ZMAMI
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Event Study ◽  
Banking Sector ◽  
Financial Sector ◽  
Study Analysis ◽  
Special Events ◽  
Egarch Model ◽  
The Exchange Rate ◽  
The Impact

Using an event study analysis, we aim to investigate the impact of political, economic, social and terrorism events, on the Tunisian financial sector, over the period of the Tunisian Revolution; from (12)2010 to (04)2014. Based on a daily data analysis using three selected variables ; Sectoral index of performance of Tunisian banks ,Index of Tunisian stock market and the exchange rate Euro/ Dinar,  the EGARCH model results have highlighted that general events decrease the return of our variables, and increase their volatility. More, results have shown that stock market is very sensitive to political and terrorism events, bad economic events increase the volatility of the exchange rate, and decrease the performance of banking sector. Political events remain the more important component, they affect negatively all the endogenous variables; coefficients in the mean equation show an important decline in term of the return of banking sector ,the stock market and the exchange rate.

The dynamics of banking sector and stock market maturity and the performance of Asian economies

2014 ◽  
Vol 30 (1) ◽  
pp. 16-44 ◽  
Author(s):  
Rudra P. Pradhan ◽  
Mak B. Arvin ◽  
Neville R. Norman ◽  
John H. Hall
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Banking Sector ◽  
Panel Cointegration ◽  
Principal Component ◽  
Financial Sector ◽  
Estimation Methods ◽  
Asian Countries ◽  
Content Type ◽  
Causality Tests

Purpose – The purpose of this paper is to examine the nature of causal relations between banking sector maturity, stock market maturity, and four aspects of performance and operation of the economy: economic growth, inflation, openness in trade, and the degree of government involvement in the economy. Design/methodology/approach – The authors look for possible links between the variables by conducting panel cointegration and causality tests, using a large sample of Asian countries over the period 1960-2011. Novel panel data estimation methods allow for robust estimates, using both variation between countries and variation over time. Findings – The study identifies interesting causal links among the variables deriving uniquely from our innovations. In particular, The paper finds that for all regions considered, banking sector maturity and stock market maturity are causally linked, sometimes in both directions. Furthermore, stock market maturity may lead to economic growth, both directly and indirectly through indicators such as inflation and trade openness. The findings also support the notion that economic growth affects the maturity of the stock market in most regions. Practical implications – The results lend support to the notion that a mature financial sector is a key contributor to generating economic growth. Furthermore, economic growth itself has the potential to bring about maturity in the financial sector. Originality/value – The paper uses sophisticated principal-component analysis, panel cointegration, and Granger causality tests, methods not used in this literature before. The method was applied to recent data pertaining to 35 Asian countries – a group of countries that has previously not been adopted in this literature.

scholarly journals Information asymmetry and conditional financial sector development

2017 ◽  
Vol 9 (4) ◽  
pp. 372-392
Author(s):  
Simplice Asongu ◽  
Jacinta Nwachukwu
Keyword(s):  
Information Asymmetry ◽  
Financial Development ◽  
Financial Sector ◽  
Policy Implications ◽  
African Countries ◽  
Content Type ◽  
Mean Values ◽  
Financial Sector Development ◽  
Negative Effect ◽  
The Impact

Purpose The purpose of this study is to examine the role of reducing information asymmetry (IA) on conditional financial sector development in 53 African countries for the period 2004-2011. Design/methodology/approach The empirical evidence is based on contemporary and non-contemporary quantile regressions. Instruments for reducing IA include public credit registries (PCRs) and private credit bureaus (PCBs). Hitherto unexplored dimensions of financial sector development are used, namely, financial sector dynamics of formalization, informalization, semi-formalization and non-formalization. Findings The following findings are established. First, the positive (negative) effect of information sharing offices (ISO) on formal (informal) financial development is consistent with theory. Second, ISOs consistently increase formal financial development, with the incidence of PCRs higher in terms of magnitude, and financial sector formalization, with the impact of PCBs higher for the most part. Third, only PCBs significantly decrease informal financial development and both ISOs decrease financial sector informalization. Policy implications are discussed. Originality/value The study assesses the effect of reducing IA on financial development when existing levels of it matter because current studies based on mean values of financial development provide blanket policy implications which are unlikely to be effective unless they are contingent on prevailing levels of financial development and tailored differently across countries with high, intermediate and low initial levels of financial development.

scholarly journals An Empirical Analysis of Financial Sector Development and Savings Mobilization in Nigeria: ECM Analysis

2019 ◽  
pp. 1-11
Author(s):  
Ikubor Ofili Jude
Keyword(s):  
Stock Market ◽  
Crude Oil ◽  
Oil Prices ◽  
Financial Sector ◽  
The Other ◽  
Domestic Saving ◽  
Financial Sector Development ◽  
Crude Oil Prices ◽  
Domestic Savings ◽  
Short Run

This study employs Error Correction Model (ECM) and Co-integration analysis to study the relationship between financial sector development and savings mobilization in Nigeria 1986 to 2017. As expected from a developing country like Nigeria, a short-run positive relationship is observed between the Nigerian stock market and crude oil prices and the direction is from crude oil prices to the Nigerian stock market but not the other way round. The short run, interest rate earning has a positive and significant impact on domestic savings while the other variables have no significant impact domestic savings in Nigeria. Government should therefore consolidate on past financial sector reforms to improve domestic saving mobilization to reduce the dependence of Nigeria on foreign savings to finance domestic investment.

scholarly journals A note on the relationship between COVID-19 and stock market return: evidence from South Asia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Md Arafat Rahman ◽  
Md Mohsan Khudri ◽  
Muhammad Kamran ◽  
Pakeezah Butt
Keyword(s):  
Stock Market ◽  
South Asian ◽  
Stock Markets ◽  
Asian Countries ◽  
Causality Test ◽  
Stock Market Returns ◽  
Content Type ◽  
Market Return ◽  
Stock Market Return ◽  
The Impact

Purpose The transformation of coronavirus disease (COVID-19) from a regional health crisis in a Chinese city to a global pandemic has caused severe damage not only to the natural and economic lives of human beings but also to the financial markets. The rapidly pervading and daunting consequences of COVID-19 spread have plummeted the stock markets to their lowest levels in many decades especially in South Asia. This concern motivates us to investigate the stock markets’ response to the COVID-19 pandemic in four South Asian countries: Bangladesh, India, Pakistan and Sri Lanka. This study aims to investigate the causal impact of the number of confirmed COVID-19 cases on stock market returns using panel data of the countries stated above. Design/methodology/approach This study collects and analyzes the daily data on COVID-19 spread and stock market return over the period May 28, 2020 to October 01, 2020. Using Dumitrescu and Hurlin panel Granger non-causality test, the empirical results demonstrate that the COVID-19 spread measured through its daily confirmed cases in a country significantly induces stock market return. This paper cross-validates the results using the pairwise Granger causality test. Findings The empirical results suggest unidirectional causality from COVID-19 to stock market returns, indicating that the spread of COVID-19 has a dominant short-term influence on the stock movements. To the best of the knowledge, this study provides the first empirical insights into the impact of COVID-19 on the stock markets of selected South Asian countries taking the cross-sectional dependence into account. The results are also in line with the findings of other existing literature on COVID-19. Moreover, the results are robust across the two tests used in this study. Originality/value The findings are equally insightful to the fund managers and investors in South Asian countries. Taking into account the possible impact of COVID-19 on stock markets’ returns, investors can design their optimal portfolios more effectively. This study has another important implication in the sense that the impact of COVID-19 on the stock markets of South Asian countries may have spillover effects on other developing or even developed countries.

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