Journal of Economic Impact

Estimation of Digital Transformation in South Asian Economies: An Application of Broad-Spectrum Approach

2022-10-04T18:04:58+00:00

The study aims to estimate the status of digital transformation (DT) in developing economies. Since there has been a gap in the measurement of digital transformation, this study will help in improving the economic performances of SAARC countries in the future. Herein, a study of the rankings of Digital transformation is being presented by the South Asian Association for Regional Cooperation SAARC (Bangladesh, Bhutan, India, Nepal, the Maldives, Pakistan and Sri Lanka) using a set of indicators under the prevailing scenarios of digital transformation. Composite digital transformation indicators can primarily be grouped into three dimensions: the financial sector digital transformation, industrial sector digital transformation, and services sector digital transformation. Each identified indicator happens to be independent of the other, which could be easily used to put value (individual) based on accurate statistics coupled with the available observation for each country by using PCA (Principal of Component Analysis). The exercise brought about the results that showed that Bangladesh stands at the top of being the most DT country insofar as SAARC nations are being considered. Subsequently, Bangladesh is followed by Sri Lanka. The Maldives has been found to be at the lowest echelon of digital transformation. However, other countries of the SAARC region have been found to lie in the middle of this research’s spectrum. India and Pakistan have consistently been at the centre slot after considering the results of all four scenarios. This framework provides new vistas of opportunities for the policymakers to put their might regarding digital transformation to good use with a view to bringing other regions up insofar as digital transformation is considered.

Impact of Audit Quality on Stock Price Crash Risk: Evidence from Pakistan Stock Exchange

2022-08-15T15:07:15+00:00

Stock price crash risk is an unfavourable event in business that may decrease the shareholder’s wealth and hurt stability and capital market growth. This study investigates the impact of audit quality measured by auditor industry specialization (AIS), audit tenure (AT), audit committee independence (ACI), audit firm size(AFS)) on stock value crash (measured by down-to-up unpredictability) for a sample of 70 non-financial firms listed in Pakistan Stock Exchange during from 2009 to 2018. Efficient governance enriches financial and operational directness, which cuts down the stock value crashes in rotation. Facing crash risk difficulties, traders impart more funds to stocks of well-regime organizations. The fixed effect model results show that AIS and ACI have a negative and significant impact on crash risk, while there is a positive impact of AFS on stock price crash risk. Moreover, it concludes that it has an insignificant impact on stock price crash risk in Pakistan. It is concluded that effective audit quality lessens the difficulty of data abnormality and improves stock price crash risk. This study has importance for investors to help them identify the most liquid stock and will enable them to decide which stocks to acquire and which to dispose of. This study will also be helpful for academics and scholars to bridge this gap on the influence of audit quality practices on the economic consequences of Pakistan. It will be useful for future research as well as because it will become part of the empirical literature on the economic consequence of stock markets.

Effects of Agricultural Commodity Prices on Agricultural Output in Nigeria

2022-07-29T18:17:17+00:00

In Nigeria, there is over-reliance on oil proceeds at the expense of revenue accrued to agriculture, which adversely affects the standard of living. The study examines the effect of commodity prices on agricultural output in Nigeria. In the empirical model, agricultural output depends on maize, wheat, soya beans, and oil prices. Data covering 1991 and 2017 from the Central Bank of Nigeria Statistical Bulletin and Food and Agricultural Organisation was analysed using a fully modified OLS (FMOLS) technique. The result shows that maize and soya bean prices positively affect agricultural output, while wheat prices and oil prices negatively affect agricultural output in Nigeria. This implies that agricultural output increases with increased agricultural commodity prices and falls with an increase in oil prices. The paper recommends the need to expand the production of agricultural commodities through a direct government partnership with farmers in the area of supply of expert knowledge, technology and credit. Also, to redirect the populace's focus from oil in favour of agriculture, there is a need to introduce a subsidy for agricultural output to make its pricing attractive and provide leverage for farmers' occasional shocks in their yield.

International Remittances and International Tourism Development in South Asia: The Moderating Role of Political Stability

2022-10-09T13:30:46+00:00

The increasing dependence of South Asian countries on international remittances (IRM) and international tourism development (ITR) in the presence of political uncertainties has attracted scholars' attention. Although the largest receiver of IRM, South Asia fails to channel these funds to the tourism industry, which continues to operate below its potential. This study estimates the impact of IRM, political stability (PS), and their interaction with foreign direct investment (FDI) and relative price (RP) on ITR in South Asia. We used a balanced panel dataset of six South Asian countries from 1996 to 2020. We applied the pooled ordinary least squares (POLS), fixed effects (FE), feasible generalized least squares (FGLS), and Prais-Winsten regression with panel-corrected standard errors (PCSE), to estimate the results. The study discovered quite interesting and surprising results between IRM and ITR. The results suggest a statistically significant negative impact of IRM on ITR in South Asia, implying that the recipients of IRM tend to spend most of it on their basic level consumption needs and do not have incentives to save and invest. Further, the results suggest that PS positively moderates the relationship between IRM and ITR, suggesting that IRM will be channelized to the tourism sector if domestic investors expect low political risks in the region. In addition, the results indicate that PS and FDI have a statistically significant positive effect on ITR in South Asia. Moreover, RP has a negative and significant impact on ITR, implying that international tourists prefer cheaper destinations. This study provides crucial implications for South Asian economies. First, effective public policies are specifically designed for channelling IRM and FDI, focusing on enhancing the tourism industry's infrastructure. Second, PS is necessary for ITR and domestic investors to invest IRM in the tourism sector. Thus, policymakers must consider political factors while designing tourism policies and strategies. Third, the findings highlight the significance of price competitiveness for developing the tourism industry. Hence, we argue that policymakers should implement effective economic policies to stabilize regional prices to attract international tourists.

Energy Use, Financial Development and Pollution in Selected African Countries

2022-09-29T05:12:25+00:00

The consequences of environmental pollution on human life have continued to exacerbate in recent times, especially in African countries. This has spurred research interest among researchers to find out how nations can keep carbon emissions in check. In this regard, this study focuses on some selected African countries between 1981 and 2019 to investigate the effect of energy use, financial development and carbon emission. The study employs the Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) based on the framework of the co-integration regression method to analyze the panel data. The result reveals that energy use positively and significantly affects carbon emissions in energy-dependent African countries. Financial development positively affects carbon emissions, while the mediating role of financial development between energy use and carbon emission causes carbon emissions to reduce. Therefore, the study recommends that energy-dependent African countries strengthen their financial sector to ensure credit availability for green supportive investment.

Digital Divide in Pakistan: Barriers to ICT Usage among the Individuals of Pakistan

2022-12-12T10:02:50+00:00

The Information and Communications Technology (ICT) revolution has radically improved connectivity across the globe and pervaded into most aspects of modern human life. The fourth industrial revolution is currently taking place, and it will be digital. Pakistan has made significant progress in the last few years in IT, but currently, Pakistan is ranked 135 out of 144 in access to the internet. This low level of ICT usage depends on the multiple factors affecting the individual's decision to ICT usage. For this purpose, this study surveys the correlates of ICT use capabilities in Pakistan. ICT usage is composite of specified digital skills. The data sourced from PSLM – HIES survey (2018-2019) was used for empirical analysis. The empirical evidence is based on the Logit model. The marginal effects of the Logit model suggest that socioeconomic, demographic, regional, and supply-side factors well explain the variation in the ICT usage capabilities of the individuals. Moreover, the leading determinants of the digital divide are ICT infrastructure and access to focal technology. We found a sizeable digital divide among the individuals of Pakistan. This study is an implication of target 9c of the ninth goal of sustainable development goals related to increasing access to ICT and striving to provide universal and affordable access to the internet in least-developed countries. The study's findings help the researcher highlight the factors hindering the ICT use capabilities of individuals and bridging Pakistan's digital divide diffusion.

Can Food Inflation Be Stabilized By Monetary Policy? A Quantile Regression Approach

2022-10-10T18:08:31+00:00

Theoretically, a consistent and well-defined monetary policy can stabilize food inflation. However, empirical findings have reported both positive and negative effects of monetary policy measures on food inflation. In the literature, several analytical techniques are used to grasp the impact of monetary policy tools on food inflation in developed and developing nations. Usually, VAR and ARDL approaches are employed to fulfill this task. However, these techniques do not capture the tail dynamics of food inflation. In countries like Pakistan, where food expenditures are a major chunk of the consumption basket and half of the population is either poor or on the verge of poverty, tackling food inflation has always been a major task for policymakers. To capture the effect of monetary policy on various quantiles of food inflation, we have employed the quantile regression approach in this study. We have used the time series data based on monthly observations from September 2005 to October 2020 of food inflation, monetary policy, and several other variables. We have found that monetary policy and transportation prices remain highly significant across all quantiles, exhibiting a positive impact on food inflation. Thus restrictive monetary policy leads to higher flood inflation in the country. In the case of Pakistan, governments usually provide subsidies to lower the impact of food inflation. It is suggested that a restrictive monetary policy is usually not required when a subsidies-focused fiscal policy is implemented.

Economical Olive Cultivation by Selection of Suitable Variety in Pothwar Region of Pakistan

2022-10-18T19:40:32+00:00

Olive (Olea europaea) is very popular for producing premium quality edible oil, though it is the main crop of the Mediterranean region, playing a pivotal role in the economies of those countries. Its cultivation is increasing in other countries, including Pakistan, due to its wide adoptability and easy propagation technology. The very wide genetic variability of the plant is a reason for its popularity. Olive varieties behave differently in different climatic zones of the world. Pakistan has adopted various varieties for their cultivation in different olive production pockets. These studies were conducted in the Centre of Excellence for Olive Research & Training (CEFORT), Chakwal, to prioritize suitable olive varieties for Pakistan's economical olive oil business. The highest yield (2652 Kg/acre), Net Profit/acre (Rs. 271386), Oil Recovery/acre (331.7652Ltr.), and Oil income (331765.2) was observed in BARI Zaitoon-I while Average Oil Recovery (13.48%), Total Expenditure /Acre (61335.01) was observed in Arbiquina olive variety. BARI Zaitoon-1, BARI Zaitoon-2, Arbequina, and Koroneiki proved most suitable for cultivation in sub-mountainous areas of Pakistan. These varieties are recommended for olive cultivation in the Pothwar region due to their growth behavior, olive oil content, and good economic return. The difference in the fruit ripening period among these varieties results in the prolonged supply of raw material to the olive oil extraction industry.

The Socio-Economic Impact of COVID-19 on Households in Punjab, Pakistan

2022-12-15T09:02:59+00:00

The COVID-19 pandemic affected the everyday life of human beings. This study investigates the impact of COVID-19 on six socio-economic dimensions (i.e., food availability, food quality, education, finance, non-payment of utility bills, and sale of assets/goods) in Punjab, Pakistan. Three districts were selected from Punjab province based on two criteria such as (a) geographical variability and (b) intensity of COVID-19. Thus, a total of 1200 respondents were interviewed via convenience sampling from selected Punjab districts (i.e., Faisalabad, Muzaffargarh, and Chakwal). Descriptive statistics showed that most respondents face the adverse socio-economic effects of COVID-19. However, the percentage of strongly agree/ agree was comparatively more for low-educated respondents, while it was comparatively less for high-educated respondents. The percentage of strongly agree/agree comparatively more for low-income respondents, while it was comparatively less for high-income respondents. The percentage of strongly agree/agree comparatively more for private job holders while it was comparatively less for public job holders. The percentage of strongly agree/agree comparatively more for urban households, while it was comparatively less for rural households. The percentage of strongly agree/agree comparatively more in Chakwal while it was comparatively less in Faisalabad. The chi-square () independence test showed a significant role of education, family income, job type, and area of residence on the socio-economic impacts of COVID-19. Therefore, it is recommended to increase educational opportunities and educational standards. Developing a Learning Management System is also suggested to continue education in emergencies. It is recommended to increase the family income through an increase in investment and employment opportunities. The protection of private-sector employees is necessary during the pandemic situation. The government should provide interest-free loans to businesses during an emergency. The government should ensure the vaccination of citizens to control the spread and intensity of the disease. Training of doctors and paramedical staff is necessary to perform duties during the pandemic.

Fiscal and Monetary Policy Dilemma in Pakistan to Support Economic Growth

2022-12-13T16:50:18+00:00

Monetary and fiscal policy are both macroeconomic instruments used to govern and have a large impact on a country's economy, businesses, production and consumption. The objective of the study is to evaluate the comparative analysis of fiscal and monetary policy in Pakistan. For this purpose, an autoregressive distributed lag (ARDL) model was used, which showed the significant impact of monetary and fiscal policy on enhancing economic growth. Data was obtained from World Development Indicator (WDI) from 1990 to 2020. In this study, two models have been estimated using the Gross Domestic Product (GDP) as a dependent variable and Development Expenditures, Gross Fixed Capital Formation, Labor Force Participation, Corruption, Total Tax, Trade openness, Broad Money (M2), Governmental Consumption Expenditure as independent variables. The results showed that monetary policy positively impacts Pakistan’s economy. Also, the study found that fiscal policy affects Pakistan’s economy positively. But the study reveals that monetary policy is more powerful in promoting economic growth in Pakistan. So, we will suggest that promoting the monetary policy in the banking sector would provide a suitable investment atmosphere through the maintenance of inflationary rates, interest rates, and lending rates to endorse and confirm economic growth, sustainability, solidity, and progress in Pakistan.

The Impact of Financial Sector Development on Environmental Degradation (Carbon Dioxide Emission) in Pakistan

2022-12-13T08:38:31+00:00

The main purpose of this research article is to determine the impact of financial sector development on environmental degradation in Pakistan. The study used the time series data of the financial sector development on environmental degradation (CO₂ emission) in Pakistan during the period of 1974-2018. Due to the nature of the times series data, the Augmented Dicky Fuller test is used to detect the level of stationarity in the data. Mixed orders of the stationarity in the data are reported, and the Auto Regressive Distributed Lag model is the best technique to provide efficient results. The ADF result clearly shows that the variables except for Y, Y2, and Y3 are stationarity in the first order, while the mentioned variables are stationarity at a level. And Trade openness is stationary at first difference. The bound test results (the F-statistic value is 5.208 that exceeded the values of upper bounds value, i.e., 3.28 at a 5% significance level. Therefore, the co-integrational relationship is confirmed for the model of the study at a 5% significance level. The model depicts the impact of Financial Sector Development on environmental degradation regarding CO₂ emission. It was found that FSD negatively affected environmental degradation in Pakistan in both the long and short run during the period from 1974 to 2018. The impact of PG, EC and FDI is positive and statistically significant in the long run. The impact of TO on CO₂ emission is negative and significant in the long run. On the other hand side, negative shock can produce harmful effects on the environment. A positive and significant relationship is reported regarding economic growth and CO₂ emission. The impact of Population growth, Financial Development Index, Trade Openness, Energy Consumption, and Economic growth is also positive and significant to CO₂ emission. It is quite evident from the detailed examination of the above model. This study concluded that financial sector development efficiently contributes to long-term and short-term environmental degradation. Financial sector development negatively and significantly affects environmental quality as measured by CO₂. Therefore, it is concluded that the financial sector can be used as a policy tool to reduce CO₂ emission in Pakistan based on the data set from 1974-2018.

Towards Green Growth: Monitoring Progress and Investigating Its Determinants in South Asia

2022-11-30T07:24:21+00:00

Keeping in view the global environmental emergency Green Growth assessment will show policymakers how to maximize economic outcomes while ensuring environmental sustainability. This study aims to construct a Green Growth (GG) Index and empirically test its long-run and short-run determinants for the time series data from 1990 to 2021 in the case of Bangladesh, India and Pakistan. A set of nineteen indicators covering three dimensions, including resource productivity, environmental quality and economic and social aspects, is used to develop the GG index through the principal component methodology. Given the mixed order of integration, Autoregressive Distributed Lag (ARDL) method is utilized to check the co-integration relationship of variables. The results of this study depict that in the case of Bangladesh, there are three significant determinants in which urbanization and forest area are positively associated with GG and trade openness negatively. In India, GG is significantly and positively influenced by urbanization and forest area, while socio-economic conditions impair it. For the third country, Pakistan, urbanization, trade openness, law and order have significant and positive associations with GG, while socio-economic conditions have significant but negative relationships. Based on the study's outcomes, dependent variables show divergence from their short-run equilibrium with error correction terms -0.726, -0.914 and -0.439 for Bangladesh, India and Pakistan, respectively. Therefore, this study suggests implementing policies related to urbanization, trade openness, forest area, law and order and socio-economic conditions to stimulate GG.

Impact of Socioeconomic Determinants on Infant Mortality in Pakistan

2021-10-21T06:29:02+00:00

The recent study was carried out to estimate the impact of socioeconomic, demographic and the aspect of health status on child mortality in Pakistan. The data for the study was collected from the PSLM (Pakistan Social and Living Standard measurement survey) for the year 2011-12. The data were analyzed through cross-tabulation and binary logistic model using MLE (Maximum likelihood estimation) technique. Overall, 13216 households were selected for the analysis. The result of the study of the cross-tabulation shows that the overall child mortality was low in Baluchistan province, the maximum number of children survived in Punjab province further, and the child mortality was low in an urban area where 290 children died out of 3984 houses as compared to rural area household in Pakistan. Child mortality was high among females than males in Pakistan. The result of binary logistics shows that out of the total independent variable, nine variables significantly affect child mortality in Pakistan, location of the household, gender, education of father, education of mother, income and mother feeding, positively associated the infant mortality; all these aspects reduce the chance of child mortality, while there was a less likely chance that child survives in Punjab, Sindh as compared to KPK in Pakistan. In the case of Baluchistan, there was also the same situation as KPK in terms of child mortality. Infant mortality was high in female children compared to male children, which means there is a less likely chance of surviving among the female child than the male child. All other variables were insignificant in Pakistan. It is suggested that the central authority provide basic children and mothers health facilities at minimum cost to the rural areas of Pakistan.

Validity of Environmental Kuznets Curve in the Malaysian Economy: A Fresh Evidence

2022-12-24T07:55:24+00:00

It is acknowledged that environmental degradation, climate change and the atmosphere's temperature are increasing due to the emission of greenhouse gasses. Therefore, a speedy response is required to lessen the severe effects of greenhouse gases. The present study has analyzed the influence of electric consumption, fiscal development, globalization, and trade openness on carbon emission using the latest dataset and modern econometric techniques. To accomplish the said objectives, the study has employed Johansen cointegration, autoregressive distributed lag model (ARDK), and block exogeneity. The results specify that with the 1% increase in electric consumption, fiscal development, globalization and trade openness, the carbon dioxide emission increases by 0.01%, 0.04%, 0.68%, and 0.25%, respectively. Moreover, the results also indicated that the environmental Kuznets curve is prevailing in the Malaysian economy because an inverted U-shape connection occurs between carbon and GDP². On the basis of data diagnostics, it is determined that the ARDL model is credible, stable, and reliable. Further, block exogeneity affirms the long-term affiliation among the factors and concludes that all the factors under analysis contribute to the environmental deterioration in the Malaysian economy. Therefore, the government may design an environmental or pollution tax policy to minimize carbon emissions. Green energy should be produced and consumed as it is environmental friendly and helps to reduce temperature and atmospheric pollution.