scholarly journals The Impact of Financial Development on Corporate Performance: Theory and Evidence

2020 ◽  
Vol 12 (1) ◽  
pp. 214
Author(s):  
Thu-Trang Thi Doan ◽  
Toan Ngoc Bui
Keyword(s):  
Stock Market ◽  
Financial Development ◽  
Essential Role ◽  
Corporate Performance ◽  
Banking System ◽  
Performance Theory ◽  
Method Of Moment ◽  
Parallel Development ◽  
Generalized Method Of Moment ◽  
The Impact

This paper investigates the impact of financial development on corporate performance. Particularly, financial development is approximated by the parallel development of the banking system and stock market, which is expected to demonstrate the multidimensional nature in financial development. Specially, we consider the influence of financial development on corporate performance by exploring the theoretical and empirical works, a novel way of approaching the problem. We analyse the data of logistics sector and financial development in Vietnam, an economy whose logistics sector is relatively limited and financial development is quite fledging, but has enormous potential. Therefore, this study is expected to identify a number of unprecedented findings. The Generalized Method of Moment (GMM) is chosen for the analysis to ensure the reliable results. We successfully find that the banking system plays an essential role in enhancing corporate performance while the stock market does not perform this role. Admittedly, this is an interesting finding which brings the novelty of this study.

scholarly journals Technology and Economic Growth: Role of Financial Development in South Asian Countries

2019 ◽  
Vol 5 (2) ◽  
pp. 323-332 ◽  
Author(s):  
Imran Sharif Chaudhry ◽  
Samina Sabir ◽  
Fatima Gulzar
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
South Asian ◽  
Method Of Moment ◽  
Asian Countries ◽  
Development Technology ◽  
Generalized Method Of Moment ◽  
Sustainable Economic Growth ◽  
The Impact

Financial development plays an instrumental role in the process of economic growth and development through mobilization of savings and creating investment opportunities. Financial development also leads to enhance the level of technology by providing finance to entrepreneurs for technological innovations which leads to economic growth. This study examines the impact of financial development and technology on economic growth of selected South Asian countries over the time span 1984-2017. Due to endogeneity problem, the empirical model used in the study is estimated by System Generalized Method of Moment (System GMM). Empirical results indicated that financial development, technology and human capital have positive and significant impact on economic growth in developing South Asian countries. To attain a sustainable economic growth, South Asian countries should put their efforts to develop their financial market that stimulates economic growth by providing finance to entrepreneurs for innovations.

Credit Market Depth and Income Inequality in Vietnam: A Panel-Data Analysis

2016 ◽  
pp. 5-18
Author(s):  
Hoi Le Quoc ◽  
Hoi Chu Minh
Keyword(s):  
Data Analysis ◽  
Panel Data ◽  
Income Inequality ◽  
Financial Development ◽  
Inflection Point ◽  
Panel Data Analysis ◽  
Credit Market ◽  
Method Of Moment ◽  
Market Depth ◽  
Generalized Method Of Moment

Financial development could exert various effects on income distribution of a country. By employing Generalized Method of Moment, this paper aims at examining the impacts of credit market depth, one of most used financial development barometers, on income inequality in Vietnam. The empirical findings show that expanding credit market in the country could lead to higher income inequality. We have not found evidence that supports the hypothesis of an inverted U-shaped relation ever introduced by Greenwood and Jovanovich, although this hypothesis may still hold in a sense that Vietnam has not reached to the inflection point to generate such a curve alike.

Financial Crisis, Globalisation and Development in Africa

2020 ◽  
Vol 56 (1) ◽  
pp. 89-104
Author(s):  
Simplice A. Asongu ◽  
Joseph Nnanna
Keyword(s):  
Financial Development ◽  
Method Of Moments ◽  
Banking System ◽  
System Efficiency ◽  
African Countries ◽  
Jel Codes ◽  
Crisis Period ◽  
Generalised Method Of Moments ◽  
The Impact ◽  
Financial Globalisation

This study unites two streams of research by simultaneously focusing on the impact of financial globalisation on financial development and pre- and post-crisis dynamics of the investigated relationship. The empirical evidence is based on 53 African countries for the period 2004–2011 and Generalised Method of Moments. The following findings are established. First, whereas marginal effects from financial globalisation are positive on financial dynamics of activity and size, corresponding net effects (positive thresholds) are negative (within range). Second, while decreasing financial globalisation returns are apparent for financial dynamics of depth and efficiency, corresponding net effects (negative thresholds) are positive (not within range). Third, financial development dynamics are more weakly stationary and strongly convergent in the pre-crisis period. Fourth, the net effect from the: pre-crisis period is lower on money supply and banking system efficiency; post-crisis period is positive on financial system efficiency and pre-crisis period is positive on financial size. JEL Codes: F02, F21, F30, F40, O10

The impact of foreign direct investment on trade in Pakistan: the moderating role of terrorism

2020 ◽  
Vol 47 (5) ◽  
pp. 1137-1154
Author(s):  
Syed Hasanat Shah ◽  
Hafsa Hasnat ◽  
Delpachitra Sarath
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Trade Deficit ◽  
Method Of Moment ◽  
Content Type ◽  
The Face ◽  
External Sector ◽  
Generalized Method Of Moment ◽  
The Impact

PurposePakistan suffered with the menace of terrorism for long and become a front line state in the “War on Terror”. Terrorism shattered Pakistan economy and rendered her external sector vulnerable to instability and uncertainties.Design/methodology/approachTherefore, using system generalized method of moment (GMM), this paper investigates the impact of foreign direct investment (FDI) on exports, imports and trade deficit in the face of unabated terrorism in Pakistan.FindingsThe findings of the paper suggest that as terrorism in Pakistan increased, FDI contribution to Pakistan exports decreased while FDI contribution to Pakistan imports significantly increased. Terrorism also disrupted the chain of local production and increased Pakistan reliance on imports. Thus terrorism widened Pakistan trade deficit of Pakistan and expose Pakistan to external imbalances.Originality/valueDespite rise in organized acts of terrorism and its adverse impact on various departments of economy, hardly any study bothers to check its impact on trade and investment nexus. This is the first study of its nature that looks deep down to understand how terrorism affects the relation of major economic variables.

The Effects of Mergers and Acquisitions on Taiwanese Corporations

2000 ◽  
Vol 03 (02) ◽  
pp. 183-199 ◽  
Author(s):  
Tsung-Ming Yeh ◽  
Yasuo Hoshino
Keyword(s):  
Stock Market ◽  
Mergers And Acquisitions ◽  
Stock Returns ◽  
Stock Prices ◽  
Corporate Performance ◽  
Accounting Performance ◽  
Acquiring Firms ◽  
The Impact

This paper investigated the impact of M&As on both the acquiring firms' stock prices and corporate performance by using evidence from 20 Taiwanese corporations. Our data suggest that the accounting performance of Taiwanese acquiring firms failed to meet the stock market's expectation of future improvements in the operations of the acquiring firms. The stock market reacted in favor of the announcements of M&As, however, there is a downward change in the acquiring firms' profitability from premerger to postmerger periods. However we do not find any significant correlation between stock returns and the change in accounting performance, which is different from some previous studies.

scholarly journals Impact of Agency Costs on Firm Performance: Evidence from Vietnam

2019 ◽  
Vol 10 (2) ◽  
pp. 294-309
Author(s):  
Le Duc Hoang ◽  
Tran Minh Tuan ◽  
Pham Van Tue Nha ◽  
Pham Van Tue Nha ◽  
Ta Thu Phuong
Keyword(s):  
Firm Performance ◽  
Instrumental Variables ◽  
Agency Costs ◽  
Negative Impact ◽  
Listed Companies ◽  
Econometric Models ◽  
Method Of Moment ◽  
Generalized Method Of Moment ◽  
The Impact

An assumption in agency costs theory is that agency costs can exert a negative impact on firm performance. In this study, we examine the impact of agency costs on firm performance of Vietnamese listed companies. Our sample includes 736 companies in Vietnam during the period om 2010 to 2015. We find that agency costs exert a negative impact on firm performance. Our results are robust to alternative econometric models, including an instrumental variables technique and a system generalized method of moment model. In addition, we show that a debt instrument can be a useful tool to reduce the negative impact of agency costs on firm performance.

scholarly journals Malaria and Natural Disasters: Evidence Using GMM Approach

2020 ◽  
Vol 21 (2) ◽  
pp. 703-716
Author(s):  
Harpaljit Kaur ◽  
Muzafar Shah Habibullah ◽  
Shalini Nagaratnam
Keyword(s):  
Natural Disasters ◽  
Capital Accumulation ◽  
Health Conditions ◽  
Human Capital Accumulation ◽  
Clean Water ◽  
Method Of Moment ◽  
Two Measures ◽  
Generalized Method Of Moment ◽  
The Impact ◽  
Robustness Check

Natural disasters not only disrupt accessibility to education, health care, food supplies and clean water, but causes outbreak of diseases. These issues deteriorate the health conditions among the victims of disasters and reduce human capital accumulation that adversely affects the economic development of the country. This paper examines the impact of total disasters and floods on malaria incidences using panel data over the period 2008 to 2014 for 79 countries. For robustness check, we use two measures on each of these natural disasters; the number of occurrences and number of people affected by these disasters. Employing the system Generalized Method of Moment (GMM) model, the findings show that the occurrences and the number of people affected by total disasters and flood, significantly increases cases of malaria. Income and education negatively impact the incidences of malaria whereas urbanization and deforestation increase the rates of malaria cases.

scholarly journals Effect of Trade Credit on Firms Growth: A Case Study of Pakistani Non-financial Firms

2019 ◽  
Vol 5 (2) ◽  
Author(s):  
Hafiz M. Adnan Hanif
Keyword(s):  
Panel Data ◽  
Firm Growth ◽  
Trade Credit ◽  
Panel Data Analysis ◽  
Method Of Moment ◽  
Listed Firms ◽  
Financial Firms ◽  
Generalized Method Of Moment ◽  
The Impact

This study attempts to investigate the impact of trade credit on the growth of non-financial firms of Pakistan. Most of the businesses move from traditional business transactions to automated and sophisticated credit transaction methods. As large firms have better access to financial institutions and markets but still, they are interested to seek firm growth by adopting the trade credit policies. This study collects information from non-financial firms of Pakistan. Panel data is used to explore the impact of trade credit on firms growth. The data collect from the year 2001- 2015 of 257 non-financial firms of Pakistan. A technique of panel data analysis, generalized method of moment used to analyze the data. The results suggest that the trade credit and GDP have a positive significant impact on firms’ growth. Moreover, Firm’s age, its size and inflation in the economy have also impacted the firm’s growth but in negative direction. Finally, the non-financial listed firms of Pakistan can achieve their growth targets by adopting trade credit policies

scholarly journals A Spatial Econometric Analysis on the Impact of COVID-19 on Mortality Outcome

2020 ◽  
Vol 34 (1) ◽  
pp. 179-200
Author(s):  
Olatunji Shobande ◽  
Lawrence Ogbeifun
Keyword(s):  
Virus Disease ◽  
Predictor Variable ◽  
Statistical Modelling ◽  
Method Of Moment ◽  
Daily Mortality ◽  
Spatial Econometric ◽  
Social Tension ◽  
Mortality Outcome ◽  
Generalized Method Of Moment ◽  
The Impact

Abstract The study develops and examines the spatial distribution of the Corona Virus Disease (COVID) on mortality outcomes using a global panel dataset of 79 countries. The empirical evidence is based on Fixed Effect (FE) and System Generalized Method of Moment (SGMM) estimator. The predicted variable is proxy with daily mortality outcomes, while the predictor variable is proxy with spatial COVID spread while controlling for social tension and average temperature. The global and regional findings of the study established that spatial variation in COVID spread had positive and significant relationships with mortality outcomes. Further results also indicate that social tension is a contributing factor to the rising daily mortality outcome from the COVD outbreak, whereas temperature variation reduces mortality outcome. Thus, the study recommends the use of statistical modelling to predict and manage the epidemic. Also, there is an urgent demand to deploy essential social need to the vulnerable proportion of the population to reduce the level of social unrest, while strengthening collaborative research among scientists to develop, produce and distribute vaccines that will put an end to the pandemic.

scholarly journals The convergence of financial sector in Asia

2021 ◽  
Vol 10 (6) ◽  
pp. 166-173
Author(s):  
Maria Pinita Angelia ◽  
Rudi Purwono
Keyword(s):  
Stock Market ◽  
Empirical Evidence ◽  
Financial Sector ◽  
Estimation Technique ◽  
Method Of Moment ◽  
Macroeconomic Variables ◽  
Financial Sector Development ◽  
Development Indicator ◽  
Private Credit ◽  
Generalized Method Of Moment

This study aims to identify the convergence of financial sector development and the effect of macroeconomic variables on each financial sector development indicator in Asia. The sample used consists of 24 countries in Asia during the period 2010-2018. Identification of convergence using ?-convergence absolute and conditional. Indicators are used to represent the development of the financial sector namely private credit, liquid liabilities, stock market capitalization, and stock market turnover. Empirical evidence was based on the Generalized Method of Moment (GMM) estimation technique. The results showed that there was convergence in Asia and that macroeconomic variables had a significant effect on the development of the financial sector.

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