Research & Innovation Initiative Journals
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Approaches to the Application of Corporate Governance Regulations
Get PDFTo enhance good corporate governance practices, companies, as well as countries, have adopted and promulgated regulations and codes of best practices. To implement these regulations and practices, regulators adopt various approaches which can be broadly classified into voluntary, mandatory, and hybrid. This study examined the aforementioned approaches with particular attention to their strengths and weaknesses. The study employed a qualitative methodology using the doctrinal research method. The doctrinal method relied on primary and secondary sources. The primary sources included legislations and corporate governance codes while the secondary sources included books, e-books, journals, and articles. This methodology was deployed in appraising, interpreting, and applying these various sources of material used in the study. The study found that there are different variations and modifications to the approaches to the application of corporate governance regulations and practices. To facilitate a more efficient and effective corporate governance regime, a combination of the rule-based and principle-based approaches to the application of corporate governance is required.
Liquidity, Trading Activity, and Stock Price Volatility: Evidence from a Stressed Market
Get PDFPurpose: While the bulk of previous research focused on security-level volatility and the relationship of its determinants, the current study considers the relationship between the number of trades, lagged absolute returns, trading volume, bid-ask spread, and price volatility on the Zimbabwe stock market.
Methods: The study applied Hausman\u27s (1982) tests of the specification. The parameters and elasticity of explanatory variables have been estimated by utilizing the Generalized Method of Moments (GMM) procedure in a five-equation structural model. The data were obtained from a web-based financial market platform, Investing.com for the period between 2009 and 2021.
Results: Results show that inflation had a positive relationship with stock price volatility, which provided a hedge against inflation. There exists an indistinguishable difference between the random effects (RE) and fixed effects (FE) results and those obtained using the Pooled Ordinary Least Squares (POLS) on the total sample reflecting a cohesion of these findings.
Implications: Understanding the relationship between inflation and market risk (volatility) can be beneficial to the investor in selecting the appropriate and most convenient investment strategy. From a policy-making perspective, strategic policy measures employed towards reducing inflation would certainly reduce stock market volatility and boost investor confidence
Investigating the Relationship between Stock Liquidity and Firm Value
Get PDFPurpose: This paper aims to investigate the effect of stock liquidity on firm value (MV), operating income to price (OIP), market value of equity to market value of the asset (MVEA), and operating income to assets (OIA) ratios in Bangladesh. This paper also investigates whether firm size, leverage, or financial crisis have any moderating role to play on the liquidity-firm value relationship.
Method: The study used panel data on 159 nonfinancial firms listed in the Dhaka Stock Exchange for the period of 2006 to 2019. Ordinary Least Squares, Fixed Effect, and Two-Stage least Squares estimation methods are used to determine the desired relationship.
Results: The results show that stock liquidity has a positive and significant impact on firm value and the results are robust to alternative estimation techniques. The relationship is found more acute for small and less levered firms and more intense in the post-crisis (after the 2010 stock market crash) period in Bangladesh.
Implications: The role of firm size, leverage, or financial crisis on the liquidity-firm value relationship will help corporate managers to adopt policies and strategies for improving the stock liquidity, changing investors\u27 perceptions, and overall, increasing the depth and stability of the capital market in Bangladesh or elsewhere.
Limitations: Due to the unavailability of data, for the robustness check, we couldn\u27t use any alternative proxy of stock liquidity such as bid-ask spreads
Abolition of Capital Punishment in India: The Need of the Hour
Get PDFThis article is concerned with the penological perspective of capital punishment in India. It critically examines the contentious views of honorable courts, policymakers, commentators, human rights activists, and the Law Commission of India on whether capital punishment should be abolished or retained as earlier or whether there should be some alternative to it as it is practiced in other nations. In so doing, It has analyzed the penal provisions of different enactments provided in favor of Capital Punishment in India, including a critical examination of the lacuna in the enforcement and implementation of the death penalty. This article has referred to the contradictory landmark judgments of the hon\u27ble Courts of India. This article reviews the suggestions made by the Law Commission of India in its 262nd Reports to determine whether legislators have considered them for future adoption. It has also discussed the theories advocating capital punishment as well as systems of capital punishment in other countries
Directors’ Conflict of Interest and Its Implication for the Sustainability of a Company
Get PDFEvents on the Boards of directors in Nigeria have exposed diverse cases of conflict of interest and non-disclosure. Activities of some directors reveal that they do not know the boundaries of their allegiance to the companies that appointed them. This paper examined the role of directors\u27 viz-a-viz conflict of interest and how it affects the sustainability of the companies. The doctrinal method was used to analyze the principles of corporate governance as it is related to the conflict of interest of those who are involved in the management. With the use of primary and secondary sources, the authors discussed the legal provisions addressing issues on conflict of interest, and the impact and implication of conflict of interest related to the organizations, the economy, and corporate sustainability. The paper found that lack of adherence to the provision of corporate governance framework had led to the pervasive cases of non-disclosure, conflict of interest, criminal liability, and extinction of the companies in extreme cases. This paper also offers recommendations for curbing the menace of conflict of interest in order to ensure corporate sustainability
The Empirical Analysis of Exchange Rate Volatility in Emerging African Economies
No full textPurpose: The study examined the empirical nature of the exchange rates volatilities in a few selected African countries, viz. Botswana, Egypt, Morocco, and South Africa.
Method: The study used quarterly data (1990q to 2018q) source from the International Monetary Fund (IMF) financial archive through the Easy-Data website. Thus conducted trend analysis which includes descriptive statistics, autoregressive conditional heteroscedasticity based on the Lagrange Multiplier (ARCH-LM) test, the EGARCH model, and the Constant Conditional Correlation GARCH (CCC-GARCH) models. Additionally, test volatility and evaluate the effect of capital flows volatility on exchange rate volatility for all the countries. Further, examine the contagious effect of the exchange rates among the countries.
Result: The investigations revealed that throughout the study, Botswana experienced the highest rate of exchange rate volatility while Morocco was the least in the sample countries. Further, the series are all platykurtic, i.e. there is a reasonable level of fluctuation in the series throughout the study period. In other words, positive (appreciations) are more likely to occur in Morocco, while depreciation is more likely to occur in other countries. The trend analyses also revealed the presence of relative stability for Morocco\u27s exchange rate, while the exchange rate of the remaining countries varied significantly.
Implications: These fluctuations were acute during the period 2001-2018. In this regard, the study has concluded that the exchange rate volatility of these countries was independently determined. Thus, they can ignore monetary and fiscal policy and pursue internal goals, such as full employment, stable growth, and price stability
Modeling the Impact of Pandemic-Induced Shocks and Support Measures with an Emerging Market Economy: A GUI-Model Approach
Get PDFPurpose: This paper analyzes the impacts of COVID-19 shocks on an emerging market economy using a Graphical User Interface (GUI) model.
Methods: Event study analysis has been adopted using secondary data for measuring the impacts and impulse responses of different shocks.
Results: The paper shows how the shocks affect the economy using graphical presentations of impulse responses of major macroeconomic indicators. The shapes and movements of the impulse response curves indicate how the effects pass through from one sector to another; how long the effects may persist in the economy, and how much time will be required for recovery. All these simulations suggest that immediate supportive measures from both fiscal and monetary sides help recover the economy, although marginally due to the required higher costs stemming mainly from the higher exchange rate volatility.
Implications: Several policy implications such as sector-specific support measures, prioritization of sectors, rationing of credit facilities, efficient exchange rate management, etc., can be followed by the countries regarding fiscal and monetary policy measures towards reducing COVID-19-induced similar shocks
Exploring the Impact of Sustainable Development on Social-economic, and Science and Technological Development in Selected Countries: A Panel Data Analysis
Get PDFThis study examined the construct and latent factors of social, economic, and environmentally sustainable development and Science & technological progress across 39 economies from 2000 to 2016 using a Confirmatory Factor Analysis (CFA). The linear production function model was used to explore the influence of sustainable development on social-economic development and Science & technological progress using country-wise panel data. The age dependency ratio, education expenditure, female labor force, life expectancy, and gender equality were detected as crucial factors of social development. Further, FDI net inflows, gross capital formation, per capita GDP, total employers, and labor force participation rate were found to be valuable variables for increasing economic development. The use of electricity, renewable energy, and green technology in production activities would be helpful in diminishing CO2 emissions and improving environmental sustainability. High-technology exports, ICT goods exports, and R&D expenditure were perceived as essential drivers of increasing Science & technological progress. Sustainable development, Science & technological progress, environmental technology, and job creation in all sectors appeared to be vital indicators to increase social-economic development. Science & technological progress was positively associated with social-economic development, sustainable development, the share of the industrial sector in GDP, and green technology. It was noticed that factors positively related to economic, social, environmental, Science & technological development seemed beneficial to increasing sustainable development. The global economies should implement integrated policy in the social, economic, Science & technology, and environmental sectors to achieve sustainable development. Otherwise, global economies cannot reach the 17 sustainable development goals of the United Nations by 2030
Tackling the Economic Challenges of COVID-19: A Look at the Federal Reserve System: History and Present Day
Get PDFIn this paper, we take a look at some of the measures taken by the central bank of the United States viz. the Federal Reserve System, to help businesses, both small and large, to weather the unprecedented economic challenges faced by managers and owners of businesses to survive through the crisis of shutdowns, lost sales, unemployment, and illness. One such step taken by the Federal Reserve was to lower the discount rate, the rate at which Federal Reserve gives loans (Discounts and Advances) to U.S. financial institutions. It may be taken as a standard response to economic slowdowns by central banks around the globe, but Federal Reserve\u27s action has more significant effects than any other central bank.
While there is no "one size fits all" economic measure that works in all countries in the wake of the pandemic, we believe that knowing and discussing what one central bank did – can lead to bankers, academics, politicians, business managers and owners from different countries share their experiences and tailor proposals and plans to fit the needs of an individual country. In this spirit, this proposed paper is an endeavor to examine the role of monetary policy in averting the forces of the pandemic. The paper is divided into three sections. Section 1 talks about the structure of the Federal Reserve System, surveys some historical behavior and examines the decision-making process in the system. Section 2 discusses the economic impacts of coronavirus on all economic aspects but focuses more on the monetary structure of the US economy. Section 3 makes the argument that expansionary monetary policy was a tremendous necessity of the time, but overdoing its activity in the same direction may bring back the threat of inflation. Summary and conclusion follow Section 3
Access to and Repayment of Agricultural Credit in the Face of COVID 19: A Gender Analysis in Selected Microfinance Institutions in Cameroon
Get PDFPurpose: Gender differences in access to and repayment of loans seem to be the reason behind the persistent subsistence and small-scale nature of most agribusinesses in Cameroon. This study examines access to and repayment of agricultural credit in the face of COVID 19 in the West Region of Cameroon building on evidence from selected microfinance institutions in the West Region of Cameroon. Specifically, the study mirrors gender differences in microfinance loan disbursements and repayments, determinants of loan repayment, and constraints to loan access and loan repayment during the period of COVID 19.
Method: The purposive sampling technique was employed to select 100 farmers who had access to agricultural credit in three villages in the West Region of Cameroon. A pre-tested questionnaire was used for primary data collection and secondary data was collected from microfinance institutions and the internet. Collected data were analyzed employing tables, frequencies, t-test, and regression analysis.
Results: Findings indicated that there was a positive insignificant difference in the amount of credit received and repaid by male farmers than that of the female farmers. The male and female have equal access to credit and the same repayment capacities (R2 = 0.55 or 55%). Loan repayment was statistically and significantly determined by loan amount, interest rate, and time lag for repayment at the 5% significance level. Serious constraints to loan access were lack of sensitization, lack of collateral security, and illiteracy while major constraints to loan repayment were family commitment, price fluctuation, crop failure, high cost of production, and interest payment.
Implications: Increasing the ceiling for loan amount approved for farmers and curbing excessive bureaucratic procedures would ensure minimal diversion of the loans, higher income for the farmers, and hence better repayment rates.
Originality: The distinctiveness of this study is viewed from the context of the COVID 19 pandemic within which data was collected, thus capturing how the pandemic situation played a role in access to and repayment of agricultural loans from the perspective of gender