Nexus between Price Earnings (P/E) Ratio and Financial Performance of Commercial Banks: Dynamic Panel Evidence from Bangladesh

This paper aims to reveal the relationship between the determinants of financial performance and stock performance measured with reference to the Price-Earnings (P/E) ratio. It examines Panel Data of 10 years covering from 2010 to 2019 of seven Private Commercial Banks (PCBs) of Bangladesh enlisted in the Dhaka Stock Exchange (DSE). Several hypotheses and econometric models have been estimated with the Pooled Ordinary Least Squares (Pooled OLS), Generalized Least Squares (GLS), Fixed-effect, and Random-effect, followed by various diagnostic tests to examine the validity of the models selected for this study. Finally, the One-step Generalized Method of Moments (GMM) method has been adopted. The empirical investigation shows that among the entire set of the variables, only the Net Profit Margin (NPM) ratio has a significant impact on the P/E ratio under Random-effect, GLS, and Pooled OLS. Finally, the model developed for the One-step GMM method has revealed that the inclusion of the Lagged P/E ratio, Leverage, NPM ratio, Net Interest Margin (NIM) ratio, Asset Utilization Ratio, and Non-Performing Loan (NPL) ratio have a statistically significant dynamic impact on the P/E ratios of the PCBs. However, the Liquidity ratio and the Loans to Asset ratio divulged no statistical significance under any of the estimated models.This paper aims to reveal how determinants of financial performance affect the stock performance measured with Price-earnings ratio of the commercial banks enlisted in Dhaka Stock Exchange considering Panel Data of 10 years covering from 2010 to 2019 of seven private commercial banks of Bangladesh listed with DSE. Several hypotheses along with econometric models estimated with the Pooled OLS, GLS, Fixed-effect, Random-effect, and finally, One-step GMM method have been adopted followed by various diagnostic tests to examine the validity of the models selected for this investigation. The empirical investigation shows that, among the entire set of variables only Net Profit Margin ratio has significant impact on the P/E ratio under Random-effect, GLS and Pooled-OLS. Finally, the model developed for One-step GMM method has revealed that including lagged P/E ratio, the Leverage, NPM ratio, NIM ratio, Asset Utilization Ratio, and NPL ratio have statistically significant dynamic impact on the Price-earnings ratios of the commercial banks. However, liquidity ratio and Loans to Asset ratio divulged no statistical significance under any of the aforesaid models.

Variation of Track Response to Wheel Forces with Bogie Axle Spacing: Apparent Track Stiffness and its Influence on Dynamic Impact Forces on Railway Tracks

Track stiffness is an important parameter that affects railway track response. Axle spacing influences the response of the track to wheel forces and has an effect on track stiffness. Track response to train wheels within a bogie or between neighboring bogies vary in relation to their mutual interference, depending on the mechanical characteristics of the layers composing the track, axle spacing and bogie spacing. This interference affects the force-deflection characteristic of the railway track under a wheel. Dynamic impact forces caused by track and wheel roughness relate to track stiffness. Therefore, everything else being the same, two trains with different bogie spacing may generate different dynamic impact forces on the railway track. As a result, the accumulated damage to a railway track over time can relate not only to cumulative tonnage but also to the axle spacing of the trains operating on the railway track. Through superposition of the estimated track deflections by the beam-on-elastic-foundation theorem and looking at it from a new perspective, this paper discovers a set of relations between the variations of track stiffness with bogie axle spacing. The paper introduces a new concept of apparent track stiffness and hypothesizes that dynamic impact forces on the railway tracks relate to axle spacing. The paper then presents a numerical study and an analytical study that analyzes wheel and track interaction along stiffness transition zones for different values of axle spacing and shows that bogie axle spacing has an effect on dynamic impact forces on railway tracks.

The Dynamic Impact of Government Expenditure in Education on Economic Growth

The focal aim of this study is to examine the validation of education-led economic growth hypothesis in Malaysia under the recovery period following the 2008 world economic crisis. Specifically, this study implemented the augmented Cobb-Douglas model in order to observe the dynamic relationship between selected variables including, industrial production index, gross fixed capital formation, employment, government spending on education and broad money supply. This study adopted the Vector Error Correction Model (VECM) in analysing the dynamic impact between variables and generally supports the education-led growth hypothesis in the short and long run. Specifically the study corroborates the bidirectional causality between education spending and economic growth, and vice versa, in the short run. The result also reveals that long-run equilibrium relationship exists between government expenditure in education and economic growth in Malaysia during post-crisis recovery regime. The education-led growth hypothesis can thus be inferred for the economy following crisis. The government should thus be advised that increasing education sector spending should increase post-crisis economic growth in both the short and long run. This is further strengthened by Granger causality test result which suggests unidirectional causality that runs from financial variable to economic growth. It is accordingly suggested that financial variable is a determinant of government spending on education in the aftermath of the economic crisis. Additionally, the study also supports the role of capital and employment on economic growth in the long term. By implication, the study suggests that financial planning as related to national education policies must be carefully and meticulously crafted, to ensure future success. This is linked to the investment in human capital which includes education expenditure at different levels that is essentially important to national long-term planning. The specific financial planning for human capital development is therefore very important to ensure the expenditure incurred contributes to sustainable economic development in Malaysia in the long term.

Dynamic Response of Electro-Mechanical Properties of Cement-Based Piezoelectric Composites

By employing ordinary Portland cement as a matrix and PZT-5H piezoelectric ceramic as the functional body, 1-3 and 2-2 cement-based piezoelectric composites were prepared. Quasi-static compression tests were performed along with dynamic impact loading tests to study the electro-mechanical response characteristics of 1-3 and 2-2 cement-based piezoelectric composites. The research results show that both composites exhibit strain rate effects under quasi-static compression and dynamic impact loading since they are strain-rate sensitive materials. The sensitivity of the two composites has a non-linear mutation point: in the quasi-static state, the sensitivity of 1-3 and 2-2 composites is 157 and 169 pC/N, respectively; in the dynamic state, the respective sensitivity is 323 and 296 pC/N. Although the sensitivity difference is not significant, the linear range of the 2-2 composite is 24.8% and 61.3% larger than that of the 1-3 composite under quasi-static compression and dynamic impact loading, respectively. Accordingly, the 2-2 composite exhibits certain advantages as a sensor material, irrespective of whether it is subjected to quasi-static or dynamic loading.