Journal of Economic Impact

Dynamic Effect of External Finance in Achieving Eco-efficiency and Sustainable Development Goals

2024-05-24T16:02:49+00:00

United Nations Agenda 2030 is a call to action for global issues, and sustainability is a challenge that faces everyone. The primary objective of this research is to offer first-hand insights about external financing for sustainability. In order to calculate the impact of foreign financing on eco-efficiency, the Sustainable Development Goals, and the Social, Economic, and Environmental Development of 46 Asian countries between 2000 and 2021, the study used auto-regressive distributed lag (ARDL) models. The estimation's results showed foreign direct investment failed to significantly impact any of the five models over the short- or long-term, remittances, official development assistance, foreign debt, and restriction are useful indicators for advancing social, economic, and environmental development toward eco-efficiency and sustainable development goals. The study also indicated Sustainable development Goals and Social Development are more significant as compared to the other three Models eco-efficiency, economic, and environmental development during the short run and long run. Further indicated South Eastern Asia and East Asia Region Countries have strong requirements for External finance as compared to other Asian regions and external finance had a highly significant relationship with eco-efficiency and Sustainable Development Goals in the short run and long run from 2000 to 2021. Study recommendations are cleared; the Government’s systems should be designed as UN Agenda-2030 that supports the direction toward World Future Sustainability.

Unlocking Pakistan's Debt Conundrum: A Deep Dive into the Dynamics of Debt Servicing and External Debt Stock

2024-05-20T16:43:36+00:00

Pakistan stands at a crossroads where the burgeoning debt servicing cost of Rs 7.3 trillion is going to swallow the lion’s share of the projected revenue of Rs 9.2 trillion. This revenue also includes the Rs 5.2 trillion share allocated to the provinces. It is essential to study the causes of such a high debt stock rate, which requires a large outflow of foreign reserves. This study took 50 years of data about Pakistan and analyzed certain determinants of debt stock including debt service cost, budget deficit, military expenditure, import bill, and population. ARDL was used after finding a mixed order for stationery. The short and long-run analysis is undertaken. The Result shows that debt cost has a significant negative impact on debt stock, whereas budget deficit, military expenditure, import, and population have a significant positive impact on national debt. Based on the results, this study suggests that military expenditure and imports should be decreased to control national debt. The population must be maintained at an optimal level. The government should not go for a budget deficit as it requires further loans. The Results were checked for robustness and the model was stable.

Ethics Redefined: A Comparative Study on Women on Boards vs. Attributes of Corporate Governance in the Light of Firm Performance

2024-05-31T14:16:21+00:00

This study is related to Corporate Governance (CG) and is an important research stream. One of the most noteworthy dimensions of CG is Board Gender Diversity (BGD). While there is a lot of study being done on BGD in developing and emerging market economies is still in the early stages of this field. This study attempts to answer the seminal question, of what matters most for Firm Performance (FP), CG attributes, or just BGD). So, this study investigates the relationship between BGD and CG attributes, on the FP. The existing literature lacks a comprehensive analysis of BGD and CG attributes on FP so this study fills this research gap. To meet the study's objective, data is collected for 50 non-financial firms listed on the Pakistan Stock Exchange, the data period is 2017-2022 which leads to a total of 300 firm-year observations. For data analysis, the technique of panel regression is used in this study. This study reveals that CG attributes employ mixed influence on FP, while BGD negatively impacts the FP, emphasizing the significance of border governance mechanisms. This research shows the need for the firm to prioritize more ethical governance practices, across different cultural and economic contexts instead of just diluting the board with more female directors. Exploring the role of other variables could provide deeper insights into the factors deriving these relationships.

Competitive Textile Exports: A Comparative Study of Pakistan and China in the United States of America Market

2024-06-12T08:33:35+00:00

The clothing and textile industry is crucial to Pakistan's economy, significantly contributing to GDP and employment. Pakistan, with its strong expertise in cotton manufacturing, faces intense competition from China in the lucrative United States market. This study aims to evaluate Pakistan's textile and clothing exports to the United States and analyze its competitive advantages against China. Utilizing two analytical techniques, the Trade Competitiveness Index and Revealed Comparative Advantage (RCA), this research assesses Pakistan's positioning in the US market relative to China. Secondary data from authoritative sources such as WITS and UN Comtrade, along with scholarly articles, serve as the basis for the analysis. The study focuses on three key textile divisions (SITC 26, SITC 65, and SITC 84) and examines their impact on US imports. Key findings indicate that while Pakistan has demonstrated growth in textile exports, particularly in textile fabrics (SITC 26) and clothing (SITC 84), it still lags behind China in overall export volume and market share. The RCA analysis reveals that Pakistan possesses a comparative advantage in specific textile categories, though China's market dominance remains unchallenged. The research identifies several challenges for Pakistan, including inefficient resource use, energy supply issues, high production costs, and outdated equipment. However, opportunities for improvement lie in enhancing quality standards, compliance with international trade requirements, and strategic policy enhancements. The study provides actionable recommendations to strengthen Pakistan’s competitiveness, such as modernizing production equipment, optimizing resource use, and exploring new markets. The findings of this study are crucial for policymakers, industry stakeholders, and businesses aiming to strengthen Pakistan's textile exports and navigate the highly competitive global textile landscape.

The Moderating Role of Institutional Quality in the Relationship between Foreign Capital Inflows and Stock Market Development: A Panel Data Analysis

2024-07-05T02:38:17+00:00

The study examines the impact of foreign capital inflows (FCI) on stock market development (SMD), with a specific focus on the moderating role of institutional quality (IQ). The study uses a panel dataset of 28 emerging economies for the period of 1998 to 2022. The findings reveal that both international remittances (REM) and foreign portfolio investment (FPI) have a significant positive impact on SMD. These findings imply that REM inflows enhance the availability of financial resources in the economy, promoting stock market growth and stability. Similarly, FPI increases market liquidity and fills the saving-investment gap in the host country, thereby increasing SMD. However, the results show that foreign direct investment (FDI) has a significant negative impact on SMD. This finding implies that FDI could negatively affect SMD in the host country due to the diversion of investments from the stock market to other business ventures, profit repatriation, and crowding-out effects on domestic investment by creating strong competition in the input market, making it difficult for listed domestic firms to operate. Moreover, the study reveals two unique and interesting findings. First, official development assistance (ODA) has a significant negative impact on SMD, suggesting that ODA reduces SMD due to the misallocation of resources due to aid conditions and economic instability, and the crowding-out effect on private investments. Second, IQ positively moderates the relationship between all forms of FCI and SMD in the sampled countries, implying that host countries with a good institutional framework and high IQ tend to experience high SMD.

Does Greylisting Affect the Workers’ Remittances to their Home Country? A Case Study of Pakistan

2024-07-05T02:36:07+00:00

Inward forward remittances are an important source of foreign reserves for Pakistan and they are also conducive in maintaining the current account deficit at a manageable level. In this article, the author has attempted to gauge the impact of FATF grey listing on the inward foreign remittances of Pakistani workers employed abroad. The time series data spanning from 2001-2022 has been used to estimate these effects using the ARDL time series estimation method and bounds testing technique for cointegration. It has been estimated that no statistically significant effect of greylisting on workers’ remittances exists either in the short or in the long run. This is in tandem with various studies that have found that FATF listing does not necessarily have a conclusive or negative effect on the economic variable(s). However, the estimates suggest that there exists a statistically significant relationship between the exchange rates and the workers’ migration stocks in the short and the long run. The result(s) of the study adds to the existing literature because to the author's knowledge, no prior work has been done regarding the impact of greylisting on the workers’ remittances sent to the home country and this effect has not been studied individually in the case of a developing country like Pakistan. Furthermore, the available literature suggests that in general, not much work has been done to estimate the impact of greylisting or blacklisting on the country’s economy; the results available in the existing literature are also mixed; where some studies report unconclusive impacts whereas other studies report a negative impact of greylisting on the economic aspects they analysed.

Corporate Governance and Nonperforming Loans: Empirical Evidence from Pakistan

2024-03-17T08:10:05+00:00

Growing default loans in a financially troubled economy may further limit a bank's ability to finance economic growth. Financial institutions can effectively control the expansion of nonfinancial loans by implementing robust corporate governance practices and adherence to stringent banking regulations. The objective of this study is to analyze the influence of corporate governance on the occurrence of non-performing loans in commercial banks in Pakistan. A panel data set was developed by retrieving information about nonperforming loans, corporate governance attributes, and bank-level control variables from the audited annual reports of 20 commercial banks from 2009 to 2020. Fixed effect and random effect panel estimators were employed to regress the effect of corporate governance attributes on the nonperforming loans. The results of regression analysis revealed that the corporate governance structure had a mitigating effect on loans. The size of the directors' board and the size of the risk committee board were the only commercial corporate governance attributes of bank governance that controlled the nonperforming loans of Pakistani commercial banks. Policymakers and regulators should give due consideration to corporate governance attributes while developing strategies and mechanisms for controlling the persistent rise in nonperforming loans. The surprisingly insignificant effect of some attributes of corporate governance calls upon academics to consider other board attributes like qualifications and experience of board members in their future research agenda.

Investigating the Pattern and Determinants of Crop Diversification: Policy Recommendations for Sustainable Diversified Farming in Punjab, Pakistan

2024-08-12T06:28:36+00:00

Crop diversification is a crucial approach for promoting sustainable agriculture by allowing farmers to optimize yields, reduce inputs, conserve resources, and mitigate ecological and environmental risks. The main objectives of this study were to investigate the pattern and determinants of crop diversification in Punjab Pakistan. This research was carried out in four districts of mixed cropping zone of Punjab i.e. Faisalabad, Chiniot, Toba Tek Singh, and Jhang. A multistage sampling method was used to collect data from 200 farmers. Inferential statistics techniques such as the Tobit model and Simpson Diversity Index were employed to analyze the study objectives. The mean diversification index across the districts was 0.73, 0.75, 0.69, and 0.66 for Faisalabad, Chiniot, Toba Tek Singh, and Jhang. The mean diversification index for all the diversified farmers was 0.71. Tobit model analysis revealed that the age of farmers, education attainment, access to inputs, extension services, irrigation, and membership of farmers' associations have a major impact on the promotion of diversification of crops in the study area. This study suggests that there is a dire need to educate farmers about the production technologies of emerging crops, proper markets for fruits and vegetables, and easy availability of cheap interest loans.

The Relationship between the Value Relevance of Accounting Information and Stock Returns in Pakistan: A Case Study of Pre and Post IPO Performance

2024-08-07T03:28:24+00:00

This study analyzes the impact of value relevance of accounting information on stock returns of firms in the case of initial public offerings in Pakistan using the data of 92 firms conducting initial public offerings (IPOs) registered on the Pakistan Stock Exchange from 2000 to 2022. The data of all the variables has been collected from the annual published reports of firms and the PSX data stream. The study found that the variables earnings-per-share, change in earnings-per-share and book value are positively and significantly related to stock returns of firms before initial public offerings (IPOs). However, the variables net income, change in net income, and dividend per share are positively but insignificantly related to the stock returns of firms before initial public offerings. The study also found that the variables earnings-per-share and change in earnings-per-share are positively and significantly related to the stock returns of firms during IPOs. In contrast, the variables book value net income, change in net income, and dividend per share are found to be insignificant factors of stock returns of firms during IPOs. Lastly, the results also show that earnings-per-share, change in earnings-per-share, and book value are positively and significantly related to the stock returns of firms after five years of initial public offerings while the variables net income, change in net income and dividend per share are found to be insignificant factors of stock returns of firms after five years of initial public offerings. Keeping in view the outcomes, it is concluded that accounting information variables play an imperative role in influencing the stock returns of firms conducting initial public offerings in Pakistan.