Journal of Economic Impact

Unveiling The Effectiveness of Working Capital Management on Firm Performance: The Moderating Role of Firm Size

Asif Iqbal — 2023-06-28

Working capital management is critical to an organization's financial health and long-term performance. The relationship between working capital management and firm performance is uncertain, and research on firm size's moderating effect is scarce. The study investigates the impact of Working capital management (WCM) on firm performance and examines how the firm size moderates this relationship. Firms must efficiently manage working capital to stay financially stable and profitable. WCM procedures affect performance differently depending on the firm size. The research is conducted using the quantitative research design. For this research, we have gathered data from the annual reports of the firms belonging to the KMI-30 index listed at the Pakistan Stock Exchange. The period considered as the research sample is from 2012 to 2022, as it can provide a better analysis of different financial crises and long-term analysis. The quantile regression was used to evaluate the research objective since the data has the issue of heteroscedasticity and autocorrelation. We found that working capital significantly and positively influences the firm performance. However, the moderating role of firm size was found to be insignificant. The findings reveal that firms of all sizes should concentrate on ensuring good working capital management strategies to increase their performance. This requires monitoring and optimizing inventory, accounts receivable, and accounts payable while assuring sufficient liquidity to satisfy operating needs.

Modeling The Effects of Climate Change on Food Production in Ivory Coast: Evidence from ARDL Approach

Lucres Imelda Ke-Tindagbeme Dossa — 2023-06-28

There is a direct link between global warming and hunger in emerging West African nations like Ivory Coast, where the population is overgrowing, and food insecurity is rising. This work aims to examine and explore climate change's effects on agriculture production in Ivory Coast from 1990 to 2019. Various stationarity tests, including the Phillips-Perron (PP) and the Augmented Dickey-Fuller (ADF), are applied to determine the variables' order of integration. The autoregressive distributed lag (ARDL) approach is employed to model the long- and short-run relationships between temperature, rainfall, carbon dioxide emissions, domestic credit, gross capital formation, and agriculture sector and subsectors. The present study uses the Johansen cointegration test to verify the long-run cointegration of the ARDL estimation. The findings reveal that all the variables are integrated into order zero or one. Cointegration tests demonstrate a valid long-term association between the variables. Agriculture and related subsectors in Ivory Coast were found to benefit from increasing temperature over the long run, except for the fishery subsector, where the impact is negligible. In the short run, temperature’s effect is positive on aggregate agriculture, although it is not statistically significant. Its effect is beneficial to agriculture's subsectors, except for fishery production. In both runs, Ivory Coast’s aggregate agriculture sector and fishery subsector are negatively affected by rainfall. An insignificant favorable effect of rainfall is found on crop production in both runs. The estimated results indicated that the role of CO₂ is positive on agriculture and crop production in both run estimations. However, CO₂ does not impact livestock production. It has a long-term positive influence on fishery production but no effect in the short run. Domestic credit is found to have a beneficial influence on agriculture and its subsectors in both runs, except for crop and livestock production, where the effect is negative and insignificant in the short run. Gross capital formation negatively impacts agriculture and its subsectors in Ivory Coast, except crop production, where it only has an insignificant beneficial effect in the short run. The same is true for fishery production, which only had a significant favourable impact effect in the short run. For the government and policymakers, the findings guide the formulation of suitable policies to address global warming's effects on agriculture and guarantee sustainable food production for the increasing population.

Short and Long Run Effects of Monetary Policy on Food Inflation: A Study of Pakistan

Choudary Ihtasham Ali — 2023-06-28

Food plays a major role in the consumption basket of developing countries such as Pakistan, with a significant portion of the insufficient income of poor individuals spending on food. Therefore, higher food inflation severely affects the purchasing power of poor people. This study is designed to estimate the short and long-run impacts of monetary policy on food inflation in Pakistan. For this purpose, time series data from September 2005 to October 2020 was used through the Autoregressive Distributed Lag (ARDL) model. The findings indicate that food inflation can become stable by restrictive monetary policy in both the short and long run. The results show that the short-run shocks can be adjusted at the speed of 13.9% per month. To tackle food inflation, a balanced monetary policy is suggested. On the other hand, a fiscal policy providing subsidized food items to people can also be implemented to tackle food inflation in Pakistan.

Public Health Care Services in Pakistan: An Empirical Analysis of Drivers of Utilisation

Saem Hussain — 2023-06-28

Extensive research has been conducted in the existing literature to examine the impact of health outcomes on macroeconomic indicators. The micro-level investigation of public healthcare services, particularly utilisation, is unexplored in Pakistan. This study aims to investigate the factors that influence the utilisation of public health care services in Pakistan. The utilisation of the public health care services was determined in this study by incorporating socioeconomic, demographic, and regional covariates. Data was sourced from the PSLM survey (2019-2020) for the empirical analysis. The empirical evidence is based on the Ordered Logit model. The findings of the OLogit model indicate a positive association between literacy rate and household income with a higher likelihood of frequent and consistent utilisation of public health care services. The study confirms the existence of urban-rural disparity in utilising public health services. The findings of this study reveal a notable difference regarding the participation of the poor household in using health care services frequently or regularly. This study's findings hold considerable implications concerning the urban-rural disparity, equitable distribution of health care, and the enhancement of health care accessibility through increased purchasing power.

The Economic Analysis of Cross-Border Migration: A Case Study of Lahore, Pakistan

Zerish Tasleem — 2023-06-29

The migrant entrepreneurs’ activities increasingly spread beyond national borders as they travel and move goods between countries. Yet, research still portrays a static and homogeneous picture of the phenomenon, which disregards complex biographies, evolving along multiple places over time, and cross-border activities beyond the origin and destination country. In response, this article uses a time-geographic and biographic approach, which allows for a more dynamic investigation of the different localities involved in migrants’ entrepreneurial projects and the evolution of cross-border resources throughout their history of migration. The presented study is based on quantitative research data collection through the distribution of 186 questionnaires among the educated faculty of the University of Management and Technology, Lahore. Because most research participants have multiple migration experiences and are female, it provides insights into understudied groups within the field. This article concludes that the lack of resource, poverty, and unemployment in Pakistan is the reason for the migration of educated people from Pakistan to abroad. In contrast to the classic literature, it highlights that the cross-border engagement of migrants often exceeds the origin–destination binary. Knowledge of economic and institutional environments, professional and intimate contacts, as well as other competencies that interviewees have developed within different localities and episodes of their mobile biographies, become important resources in this regard. Moreover, the study offers a nuanced view of the constraints experienced and strategies employed by different groups of migrants according to their position in society.

On the Link Between FDI, Political Risk and Economic Growth in Sub-Saharan Africa: A Panel VAR Approach

Abderrazek Ben Hamouda — 2023-08-30

This study looks at how foreign direct investment from other countries helps grow economies in Sub-Saharan Africa. But it not just about Foreign direct investment; the quality of institution in those countries also play a big role. We're exploring how foreign direct investment, political risks, and economic growth all connect. Using a Panel Vector Auto-Regressive (PVAR) approach with a sample of 28 sub-Saharan African countries over the period 1996–2016, the empirical results reveal that FDI positively relates to internal conflicts and political stability in Sub-Saharan African countries. However, the effects of economic growth and external conflicts are negative and significant. In addition, FDI and internal and external conflicts affect positively and significantly economic growth. However, the effect of political stability on economic growth is negative and significant. On the other hand, the interaction between foreign direct investment and political stability is negative and insignificant. Finally, the internal and external conflicts are negatively affected by foreign direct investment, yet they are positively influenced by political stability. These findings have important policy implications. If Sub-Saharan Africa is to realize its economic growth agenda, policymakers should promote FDI inflows to sub-Saharan African countries by improving their institutional quality by boosting political stability and reducing internal and external conflicts.