Financial Inclusion between Financial Innovation and Economic Growth A Study of Lower Middle Income Economies

Financial inclusion is a key concern that has achieved much impulsion in the last two decades internationally. It has the scope of reporting of financial scheme and institutions to the underserved community in the economy. This study examined the effect of financial innovation on economic growth with the mediation of financial inclusion. To address the relationship researchers in this study have used measures from a dataset of low and lower middle income group economies over a sample period from 2010-2017. The results of this study shows that financial innovation creates opportunities for financially excluded segment of the society which results in financial inclusion that leads to economic growth of low and lower middle economies. Therefore, financial innovation is a way for creation of financial inclusion in low and lower middle economies.

The Endogeneity Quagmire Empirical Evidence from Telecommunication Industry of Pakistan

Purpose: The current research aims to analyze the particular quagmire of endogeneity by considering panel data with the renowned challenge of limited periods. Design/Methodology/Approach: More specifically, the empirical methodology is applied to a novel sector of Telecommunications in Pakistan by analyzing the possible relationship between Operational Risk and a Telecommunication company’s financial performance. The efficacy of the results is further tested by additional tests of GMM. Operational risk in the study is proxied with three variables. Performance is measured in terms of Returns with respect to Equity holders and Total Assets. From the point of view of management, Asset utilization is also used as a proxy for financial performance. Findings: Results show a presence of a significant and a negative relationship between operational risk and management performance and returns, thereby emphasizing the importance of operational risk management for enhanced performance in light of the theory of performance frontiers introduced by Schmenner and Swink in 1998. Implications/Originality/Value: The results suggest that the focus on operational risk management should be revitalized if the firms seek improved performance and a sustainable competitive advantage.

What Factors Drive the Banks Systemic Risk among South Asian Countries

Purpose: This study designs to examine the determinants (size, liquidity ratio, leverage ratio, deposit ratio, asset growth, net interest income ratio and return on asset ratio) of bank’s systemic risk. We use the data of listed commercial banks of the South Asian countries (Pakistan, Bangladesh, and India). Design/Methodology/Approach: The sample consists 30 banks from Bangladesh, 87 banks from India and 22 banks from Pakistan. This study covers the period from 2006 to 2018. The data is collected from the published annual reports of banks and stock exchanges of respective country. The panel data analysis is performed for the estimation of research models. Findings: The findings demonstrate that larger banks contribute lower in the systemic risk of banks. Additionally, highly liquid banks enhance the systemic risk of the banking system. Moreover, the banks with greater reliance on the deposits, net interest income and with high return on asset reduce the systemic risk contribution of the banks. Implications/Originality/Value: This study provides the justification to devise the banking policies like enhance the proportion of liquidity among assets, reliance on net interest income and promote the financing needs through deposits to limit the systemic risk contribution of the banking system.

Evaluating Moderating Effect of Growth Need Intent on Relationship between Job Characteristics and Job Satisfaction amongst Garments Industry Workers in Pakistan

Purpose: The purpose of this research is to analyze the correlation between the job characteristics and satisfaction among production workers in the garments sector assembly line and also to examine the moderating impact of growth need intent on both variables. The five job characteristics were employed in this research. Design/Methodology/Approach: This research was carried out in seven garment factories in Lahore. Data has been collected from production workers of different departments; cutting, sewing, pattern making, washing, pressing, packaging, and quality checking of randomly selected factories. A structured questionnaire was used for data collection. Considering the sample size estimation, the ratio has not to be below 1:5. (Hair, Black, Babin & Anderson, 2010) and 125 have been selected by a convenient method of sampling. Smart PLS has been used as a statistical tool for data processing and testing the hypothesis. Findings: The research suggests two important findings. Firstly, the job characteristics significantly affect job satisfaction. Secondly, it shows that the relationship between job characteristics and satisfaction is significantly moderated by growth need intent. Implications/Originality/Value: This research will add value to the existing knowledge base and serve as a guideline for HR policymakers in the textile & garments industry to recognize the needs for the development of their workers.

Impact of Service Quality and Price Fairness on Consumer Loyalty: The Moderating Role of Information Literacy

Purpose: Using data from 200 hotel guests in Multan, Pakistan, this research aims to evaluate the influence of service quality and pricing fairness on consumer loyalty while moderating the role of information literacy. Design/Methodology/Approach/Findings: The findings are estimated using partial least square (PLS). The variables service quality, pricing justice, and information literacy are all positively and substantially connected to customer loyalty, according to PLS estimations. Because the link between service quality and customer loyalty is statistically significant, the results of the moderated regression demonstrate that information literacy positively moderates it. On the other hand, while the link between price fairness and customer loyalty is statistically significant, the variable information literacy acts as a negative moderator. Implications/Originality/Value: Hotel management are advised to invest in and increase the quality of service. Managers must maintain control of all activities related to the concept of quality from the bottom to the top of their business.

Corporate Tax Operating Cash flow and Sales Growth and their Impact on Dividend Payout Ratio in Oil and Gas Companies Listed in Karachi Stock Exchange (KSE)

Purpose: The purpose of this study is to comprehend the dynamics of dividend payout in Pakistan’s oil and gas sector. This study is an attempt to differentiate that what are factors force firms to distribute dividends instead of enhancing retained earnings. To draw the required results 13 listed oil and gas companies have been incorporated in this study and their 5 years’ data has been studied. Design/Methodology/Approach: This study is quantitative and secondary data has been used to extract results. The sources of the data are financial statements of the companies under study. Fixed and random effects of regression were used for data analysis. Findings: Based on this study, it can be concluded that the independent variables selected in this model have the power to explain the dependent variable by 45%, which means the results generated through this study can be given importance accordingly in the oil and gas sector of Pakistan. The explanatory variables were identified from the prior literature and then their impact on dividend payout ratio was studied. Implications/Originality/Value: It is evident from the results of the study that management can take necessary steps to formulate a mutually beneficial dividend policy that can enhance the strength and effectiveness of these explanatory variables to enforce a dividend policy that fulfils the expectations of both the investors and the company. The investors can also evaluate different factors that might have an impact on dividend distribution and they can also get the ability to determine dividend payout ratio which made the basis for decision making for investment in the given sector.

Determinants of Foreign Capital Inflows in Emerging Markets: The Role of Institutional Quality

Purpose: The purpose of the study was to examine the key determinants of foreign direct investment (FDI) and foreign portfolio investment (FPI) in emerging market economies, with greater emphasis placed on the impact of institutional quality. Design/Methodology/Approach: The study applied a panel data system generalised method of moments (GMM) model using annual data spanning the period 2007 to 2017, in respect of 12 emerging market economies. To measure institutional quality, the study adopted the Worldwide Governance Indicators, and constructed a composite index for institutional quality using the Principal Components Analysis (PCA) method. Findings: The results revealed that FDI in the selected emerging markets was attracted by institutional quality and economic growth. Capital account openness, institutional quality and economic growth were positive determinants of FPI. However, stock market development stood out as the key determinant factor for foreign capital inflows. Implications/Originality/Value: The implications of these findings are that, in their pursuit of foreign capital inflows, these emerging markets should continue to liberalise their economies and develop their financial markets. Importantly, such developments must be coupled with the strengthening of the formal governance institutions. Robust institutions would not only curb institutional weaknesses that deter international capital inflows, but would also insulate emerging markets from unfavourable effects of volatile capital flows.

The Impact of Cash Flow Management Practices on Financial Performance of Cement Manufacturing Firms: A Comparative Study of Pakistan and India

Purpose: The study examined the impact of cash flow management practices on Pakistani cement firm’s financial performance with comparison of Indian cement sector’s selected firms. Methodology: The Pooled OLS Regression is applied with the Help of EViews software. The data collection is from official websites of the concerned companies from 2009 to 2018 with help of secondary source. The multiple regressions, Random Effect Model and Fixed effect models are used for the analysis of data and confirmed with Husman test. Findings: The finding of this study for both selected countries indicated the influence of cash flow management practices wherein both countries cement producing companies shows significant impact on firm’s performance but in terms of Pakistan Return on Assets have no impact on firm’s Profitability. Implications: Therefore, after a careful analysis study recommended that cement manufacturing companies must reevaluate their practices of managing cash flows in order to generate more profitability and generate enough cash to meet their obligations.

Influence of Capital Structure on Corporate Performance of Listed Firm in PSX: Role of External Factors

Purpose: A company’s capital structure is a blend of its equity and debt financing and is considered a significant factor in the valuation of any firm. The decisions related to capital structure formation play an integral role for the firms, therefore; this research tends to explore the factors of capital structure and their impact on firm performance. For this purpose, financial data for different listed companies in PSX has been gathered, and dividends and taxes are used as firm external factors. Design/Methodology/Approach: To examine the impact, the panel data has been used for the period 2016-2020 and panel least square has been applied. Findings: The findings suggest that among the variables current ratio, dividends, taxation, total debt to total equity ratio, and the firm size are statistically significant to profitability. The study also concludes that dividends and tax have a greater impact on capital structure and firm performance. Implications/Originality/Value: Managers and owners of the firms must make sure that their profits are used for future investments rather than payment of debts to avoid bankruptcy.

Corporate Governance Performance Relationship and the Role of Institutions and Culture: New Evidence from Asian Microfinance Institutions

Purpose: In a globalized world today, Microfinance Institutions (MFIs) are concerned about their corporate governance mechanism to enhance financial and social performance. However, it largely depends on the existing institutional, cultural and economic factors. This paper furthers the debate on the impact of corporate governance on the financial and social performance of Microfinance Institutions (MFIs) in Asian Context. Design/Methodology/Approach: The paper utilizes a panel cross-country data set comprised of 183 MFIs in 18 Asian countries over the period of 2010-2018. For empirical analysis, it applies GMM regression technique to control for the endogeniety issue. Findings: The results show that generally corporate governance mechanism contributes more towards social performance of MFIs than the financial performance and a conducive institutional environment enhances both financial and social performance. However, good cultural and economic values contribute only towards the social performance of MFIs. Implications/Originality/Value: Since majority of MFIs irrespective of their status are socially oriented. Therefore, good corporate governance mechanism is more effective in enhancing social performance in particular. Progress towards human development contributes to both financial and social performance of MFIs.