Business and Economics Journal

ISSN: 2151-6219

Open Access

Articles in press and Articles in process

    Review Article Pages: 1 - 3

    The Impact of Exchange Rate Fluctuations and Money Supply on Inflation in Sierra Leone (1986-2019)

    Justice Ganawah

    This paper aims at providing quantitative analysis of the impact of money Supply and exchange rate fluctuations on inflation in Sierra Leone. The paper utilizes secondary data that were obtained from the International Financial Statistics (IFS), of all variables investigated in the model. The sample covers quarterly data from 1986:01 to 2019:04. The model was estimated using Vector Error Correction Mechanism (VECM). The empirical results confirm that in the long run, money supply and exchange rate have significant inverse effects on inflationary pressure, while real output growth and foreign price changes have direct effects on inflationary pressure. The possible justification for the inverse effect of money supply on price level is that inflation may not be due to aggregate demand pressure but rather due to hiccups in the supply chain of goods both from the domestic and foreign supply outlets. Empirical deductions also signify the presence of significant feedback from the long run to short run disequilibrium. However, there exists a causal linkage between inflation, money supply and exchange rate in Sierra Leone.

    Research Pages: 1 - 8

    Empirical Review of Food Crop Technologies Adoption inEthiopia: Meta Analysis

    Zekarias Bassa* and Abule Mechare

    Adoption of improved climate smart food crop technologies is known to be the prerequisite for productivity improvement, assuring food security and enabling small scale farmers to widen income opportunities. However, due to different socioeconomic, demographic and institutional; factors the level of food crop technology adoption and utilization is not optimal. A meta-analysis is performed to review empirical estimates of Adoption factors of improved food crop technologies in Ethiopia. The objective of the study is to contribute to a better understanding of the factors that influence adoption of improved food crop technologies. A Critical review was done from data set of 150 significantly influential variables that merged in to 48 observations at different articles from 48 case studies. The synthesized data used in order to test if specific characteristics of the data and econometric specifications account for systematic differences in the adoption influencing factors. The data processed using Multinomial Logit model for estimating probability of food crop technology adoption choices that defined as higher, moderate and lower rate as dependant variable and study period, model type used, study district, sample size, data type and technology type introduced as explanatory variable. From these data and reviewed articles the results showed that using low adoption as bench mark, higher and moderate estimate of Adoption probability of food crop technology significantly affected by Sample size and technology type introduced. The synthesized information implies that larger sample size cannot be ultimate solution for accurate information and different technologies disseminated owned different value across small scale farmers that demands full packaged technologies and awareness creation. Using low adoption rate as base category (<40% adoption),the Results also showed that using the other than Probit model procedure indicate decrease in estimate of adoption probability that pointed out that model selection can play detrimental role in estimating the adoption probability, which also could result in wrong level of decision. The Meta analysis result also indicated that as number of sample size increase, the level of adoption decreases, which indicated existence of data management problem starting from data collection up to processing, which also could not be eased with increased sample size. Using low adoption as reference category, the result showed that Moderate adoption rate also significantly different across the study areas and affected by technology type and Model type applied. Other factors, including the study period and data type do not seem to significantly affect estimates of food crop technology adoption probability. The analysis result also confirmed that the mean size effect of food crop technology adoption estimate is function of training, extension service and credit access, oxen holding, TLU, labor force and income. This implied that through awareness creation, improving and credit, infrastructural development, livestock ownership and income earning opportunity improving, there is an opportunity for accelerating the speed of food crop technologies. The study result also justified that food crop technologies only focused on the specific technology type and quantity, not on how the technology implemented by farmers and how it scaled up, these assumed to be one of the most probable reason for low adoption of improved practices that resulted in low agricultural production and productivity the sector

      Review Article Pages: 1 - 4

      The Impact of Adoption of Agricultural Production Technology in Chiro Woreda, West Harerghe, Ethiopia

      Getaye Gizaw

      This study was designed to assess the impact of adoption of Agricultural production technology on households’ Agricultural production
      in Chiro Woreda using cross sectional data obtained from 191 Agricultural farmers selected from four kebeles to represent major
      Agricultural producers. The study used propensity score matching to assess impact of adoption of Agricultural production technology on
      household production levels. The result showed adoption of Agricultural production technology has a robust and positive effect on farmers’
      Agricultural production in quintal per hectare. The average treatment effect on the treated (ATT) was about 9.48 quintal yield per-hectare
      increase for adopters as compared to non-adopters. The result of sensitivity analysis also shows average treatment effect on treated is not
      sensitive to external change.

      Research Article Pages: 1 - 5

      Effect of Work-Life Balance on Job Satisfaction of Female Employee in Health Sector, Mogadishu, Somalia

      Fartun Ahmed Sheikh Mohamud

      Recently there has been growing attention on the standardization of personal, family, and work-life by the global economy and the associated social changes such as technological development and the growing number of double-earner families. As a consequence, many women have reported having stress and work-life imbalances. The purpose of this research is to examine women's work satisfaction and work-life balance. It helps identify the simplest ways of woman’s job satisfaction and work-life balance in achieving both individual and organizational interest.

      Research Article Pages: 1 - 10

      Asymmetric Effect, Non-Linear ARDL and the J-Curve Analysis among EAC Members

      Masoud Mohammed Albiman

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      Until recently, the empirical evidence on asymmetric effect of exchange rate and its transmission channels on trade balance is still very scarce, especially for least developed countries. This article attempts to explore symmetric effect of exchange rate and its transmission channels on trade balance. The recently developed method of Non-linear ARDL were utilized for Quarterly data from 1990 Q1 to 2017 Q4 in unexplored areas of East African Community (EAC-5) members. The study found presence of robust symmetric and asymmetric negative effect of exchange rate changes to trade balance only in Uganda, both in short run and long run. Meanwhile, there was no evidence of robust J-curve phenomena within EAC members. In addition to that, exchange rate changes (depreciation and appreciation) improve the trade balance only in Tanzania through domestic income level. Generally, the application of exchange rate policy in improving trade imbalance is doubted within EAC region.

        Research Article Pages: 1 - 9

        An Exploratory Study on the Viability of Corporate Social Responsibility Practice in Ethiopian Universities: Bule Hora University

        Mesay Ayele*

        Purpose: The aim of this research is to develop a theory, model and terminology that fit the Ethiopian Universities; by exploring facts from the CSR practice that held in Bule Hora University since its establishment.

        Methods: The researcher adopts qualitative research approach to attain its objective. The relevant data collected through in-depth-interview from the respondents of the research. These are the University V/ Presidents, college deans, HoDs, students and community members addressed for the data collection purpose. The respondents are plotted by using the combination of the purposive and simple random sampling techniques. The data analysis has been done through the software called QDA light version 12.2.with Constant Comparative Analysis (CCA) to build the substantive theory and model.

        Results: The research finding yield major results with regard to the practice of CSR in BHU. The results are focused on six different categories. These themes are knowledge meaning of CSR, practicability of CSR (various sub themes), CSR expectation, the changing scenarios in CSR practice, types and role of stakeholders, and terminology. The study reveals that there are bottleneck in the implementation of the concept CSR in BHU context such as lack of awareness, absence of comprehensive guideline to lead the tasks, there is no specific theory and model for the universities, etc. As a result, this study proposes three models. These are model for the USSR pyramid, USSR stakeholders’ model and USSR model.

        Practical Implications: The studies have various implications for different stakeholders of the concept. The study addresses for policy makers, regulators, MoSHE, Ethiopian Universities, etc. It implies to formulate policy, regulation framework, procedures, rules, and policy implication framework. Moreover, for the Ethiopian Universities it has shown to maintain synchronized effort to use and disseminate the new CSR model and terminology.

        Originality/Value: The study has its own original features other than prior researches that have conducted in the area. Newness of this specific article is new CSR terminology, CSR model, CSR stakeholders’ model and CSR pyramid that fit to the Ethiopian Universities.

        Review Article Pages: 1 - 4

        The Role of GST in the Indian Automotive Sector Slowdown

        Rineet Shetty*

        The Goods and Services Tax (GST) is the biggest tax reform of India. It has been adopted in over 160 countries and has now been implemented in India with the aim to replace all the indirect taxes such as service tax, VAT, luxury taxes, excise tax, etc., and bring them under a single taxation system. It has been introduced with the intent of reducing the burden of taxation on the manufacturer, brings transparency, eliminates the cascading of taxes and thereby help increase the country’s economic growth. However, since its inception, the Indian economy has been facing a slowdown in some key sectors. The following research tries to reason whether GST has played any major role in the current economic slowdown with a focus on the automotive industry.

        Mini Review Pages: 1 - 4

        Macroeconomic Consequences of COVID-19 for the U.S. Economy: Implications for Fiscal Policy

        Nahid Kalbasi Anaraki

        The COVID-19 outbreak hit the world economy with unprecedented consequences, which induced governments to intervene in the market and facilitate the recovery process. The bailout plans of advanced economies, though appropriate for short-term recovery, may have long-term adverse effects on budget discipline and inflationary expectations. Indeed, massive government interventions and bailouts will lead to huge amount of fiscal deficits, which may create inflationary expectations. The goal of this paper is twofold. First, it tries to estimate the effects of COVID-19 on economic growth, unemployment rate, consumption expenditures, industrial production, and GDP growth. Second, it tries to measure the long-term effects on budget deficit, and expected inflation, using Vector Error Correction (VEC) model with quarterly data for the period of 2009:1-2020:4 for the U.S. economy. The VEC model used in this study is superior to the VAR models used in previous studies. The estimated results in this study indicate that the budget deficit effect of this bailout will last at least for a period of five years and inflationary expectations will be lingering in the medium-term.

        Review Pages: 1 - 3

        Bilateral Foreign Direct Investment between GCC Countries and Developed Economies, using a Gravity Model

        Sahar Hassan Khayat*

        The study analyzed the bilateral foreign direct investment between GCC countries and developed economies using a Gravity Model. The study has applied a new approach to the panel data set on bilateral foreign direct investment flows between 6 GCC countries and 8 developed countries, from 2001 and 2012. GDP per capita for source countries and population of the source, and destination economies were almost positive and significant determinants of bilateral Foreign Direct Investment flows. Geographical proximity has exerted a significant positive influence on bilateral foreign investments. Investors may seek diversity in the investments and support GCC countries for foreign investment.

          Review Article Pages: 1 - 8

          CENTRE PERIPHERY RELATIONSHIP: An Analysis About BRICS In Two Last Decades

          Jorge Italo de Lima*

          DOI: 10.37421/2151-6219.2022.13.410

          The major goal of this study is to look at the profile and potential implications of capital flows into BRICS nations Brazil, Russia, India, China, and South Africa from 2010 to 2021, using Ral Prebisch's viewpoint on the centre periphery system. The technique utilised is hypothetical deductive, and the methodological procedure entails bibliographic research from articles, books, and scientific works on the subjective, in addition to the descriptive method and data analysis. In this way, it aimed to comprehend the concept of the centre-periphery system, which was first proposed in the 1950’s, as well as its characteristics; an overview macroeconomic panorama of countries from the BRICS is presented, followed by data from the international monetary fund, and finally, data from the world bank, analysis the capital flow profile transacted among the BRICS countries, above all from the financial account from balance of payments. It was verified that the peripheral countries have large speculative capital flows, short-term, compared to direct long-term investments. In addition, it was possible to determine the economic policy of these countries and their financial assets. Analyse the capital flow profile among the BRICS nations, particularly from the perspective of the financial account and the balance of payments. It was confirmed that the periphery nations had a high level of short-term speculative capital flows relative to direct long-term investments. It was also able to establish these countries' economic policies as well as their financial assets.

          Research Article Pages: 1 - 20

          Foreign Direct Investment, Institutions and Economic Growth.

          Ben Hassine Skander* and Aouadi Sami

          DOI: 10.37421/2151-6219.2022.13.411

          The importance of a favorable climate in determining FDI flows has been understood and emphasized in the economic literature for a long time. Thus, the inclusion of various measures of social and political attributes of host countries is not an aspect of recent literature for FDI. We can cite the studies of Basi who investigated the effects of political instability on FDI. However, in recent years there has been a resurgence of interest in this subject, with particular emphasis on the factors representative of the quality of institutions. A huge number of papers that address this will lead to a burgeoning literature on the effect of FDI on economic growth via the quality of institutions. Three factors contributed to the emergence of this interest. First, in North study, there has been widespread awareness of the important role played by institutions in shaping incentives for investment and economic activities in general. Second, there was a rapid growth in FDI flows in the 1990, and the growing interest of transition and developing countries in attracting a larger share of these flows. Third, foreign investors have shown a greater interest in the quality of institutions over access to conventional natural resources and view it as a potential location advantage in host countries.

          The purpose of our research is to try to explain theoretically and empirically how and to what extent the quality of institutions conditions the impact of Foreign Direct Investment (FDI) on economic growth? and this with the aim of drawing lessons for possible economic policies.

          The two panel data models involve a sample of 110 countries, further divided into two groups: 40 PD and 70 PVD, using GMM system, our results show that FDI alone plays an ambiguous role in contributing to economic growth during the period from 1996 to 2017.

          Review Article Pages: 1 - 8

          Analysis of Testing the Pricing Efficiency of Options Using Greeks and BSM in Nifty Index

          D. Subalakshmi* and K. Prabhakar Rajkumar

          DOI: 10.37421/2151-6219.2022.13.412

          The invariable development of the financial market in the contemporary world encourages advancements in different forms of financial instruments. While derivative trading has become an important element of the stock market in recent years, the significant volatility of option pricing has resulted from the massive increase in stock market activity. A derivative is a type of financial product that attracts investors from all over the world. When two or more buyers/sellers have a contract whose value is based on a fundamental asset, each change in the value of the underlying has a corresponding change in the value of the derivative contract. For fair value pricing of options contracts, the Black-Scholes option model is often used. The pricing efficiency of options is investigated in this study by utilizing Greeks and Black-Scholes model values in the Nifty Index. This study aim of this study is to determine the most significant association between BSOPM (Black-Scholes Options Pricing Model) and actual market pricing by using Greeks.

          Index options are tremendously risky and gainful derivatives, which are influenced by specific market variables like index value, time to expiration, strike price, interest rate, underlying index value, etc. We calculated the call option price, put option price, and Greeks of Nifty option using the Black Scholes model for November 2018. Greeks-delta, gamma, theta, vega, and rho are analyzed concerning their impact on options positions of each strike price, through which we tried to understand and measure different dimensions of risk involved in Nifty index option positions. The study concludes that the option values have an irrelevant consequence on the market values.

            Mini Review Pages: 1 - 4

            The Ugly Truth about Banking and Banks in in Lebanon

            Mohammad Ibrahim Fheili*

            DOI: 10.37421/2151-6219.2023.14.441

            Lebanon walked out of Paris II in November of 2002 with US $4.5 billion in soft loans from countries friends of Lebanon. This represented, at the time, 25 percentage of the country’s Gross Domestic Product (GDP). It must’ve been a much needed fund but it was not properly utilized. After that, political class’s appetite to spend grew stronger with little to no reforms to report or claim. The nature and magnitude of the debt problem couldn’t be made clearer with the statement of, then the chairman of the board or directors of the Association of Banks in Lebanon (ABL), in February of 2012, Dr. Francois Bassil, came out strong against banks continuing on the path of lending the government. It was utterly clear that Lebanon’s public debt is getting out of hands and it is no longer sustainable. With banks operating in Lebanon bearing half of the public debt in foreign currencies and over two-third of the debt denominated in domestic currency that put them in the eye of the storm.

            Review Article Pages: 1 - 11

            Long Memory Dependence over Cycles in Nigerian and South-African Stock Markets

            Ajibola Arewa*, Emmanuel Chukwuemeka Ejianya, Olufemi A Ajose, James Ayodele Owoputi, Solomon Omolade Ojediran and Joy Ejighomegba Omorojor

            DOI: 10.37421/2151-6219.2023.14.442

            The study adopts a time series data to investigate long memory dependence over stock market phases of some selected sub-Saharan African countries. The data for this study were collected from from 2012 to 2022. Data on stock index of Nigeria and South Africa were sourced from that site. The estimation techniques for this study are R/S (Rescale regression analysis) and ARFIMA (Autoregression Fractionally Integrated Moving Average) models. It is concluded that Nigeria stock market return has long memory in return that is current returns are correlating with future return. Similarly, in South Africa stock market current return correlate with future return in a short range. Thus, the results from this study can be used by investors to create risk and portfolio management methods because the fundamental element of anticipating return is present. Instead of using behavior patterns like herding, investors can make buy and sell choices using fully built trading algorithms.

            Review Article Pages: 1 - 8

            Herding Behavior and Investors? Irrationality in the Nigerian Equity Market

            Ajibola Arewa*, James Ayodele Owoputi Ejianya, Scholastica Chimdiya Osuji, Emmanuel Chukwuemeka Ejianya, Olufemi A Ajose and Joy Ejighomegba Omorojor

            DOI: 10.37421/2151-6219.2023.14.443

            In this study quantitative research design was utilized to test the herding behavior of investors in Nigerian equity market. A random technique was adopted to select the companies with sufficient observations that cover the scope of the study. In this study, stock price information from five companies is used. The data used in this analysis were gathered from over an 8 years period, from 2015 to 2022. The cross-sectional absolute standard deviation was determined using the data collected. It is concluded that there is market wide herding behavior of investors and when the market is up there is presence of significant herding behavior of investors. However, there is no significant herding behavior of investors when the market is down. When there is herding in the market, this suggests that the market is inefficient and as such it is recommended that there should be restriction on short sales in order to raised or increase market efficiency. Also, the efficiency of the market will likewise increase when the cost of information declines.

            Review Article Pages: 1 - 4

            Performance Evaluation of Employees Working In Manufacturing Organization by Taguchi Loss Function

            Rashmi Gupta*

            DOI: 10.37421/2151-6219.2023.14.440

            This study for the examination of the impact of performance evaluation of the employee working in the manufacturing organizations. Taguchi loss function was used a data analysis for optimization and simulation of the data and quantitative as well as qualitative method of research is used the main purpose of this research focuses on the employee performance enhancement and there betterment so that the organization can look upon the lagging area in quality assessment and enhance it for the attainment of the organization goal and employee development.

            Research Article Pages: 1 - 9

            The Effect of Liquidity Risk Management on Financial Performance of Ethiopian Commercial Banks (2010-2021)

            Tolera Tsegaye Benti and Ketema Sime Biru*

            Banks are major financial institutions that play a pivotal role in the economic system, diverting financial resources from surplus economic agents to deficit ones. The purpose of this study was to examine the impact of liquidity risk on the financial performance of Ethiopian commercial banks. Liquidity risk management and profitability are key issues in a competitive business environment. Fixed-effect balanced panel regressions were used for data from 13 commercial banks for the sample period of interest from 2010 to 2021. We have selected and analyzed six factors that affect the financial performance of commercial banks in Ethiopia. The results of panel data regression analysis showed that liquidity (LATA), leverage (TLA), and Gross Domestic Product (GDP) had statistically significant effects on financial performance of commercial banks. The Funding Gap Index (FGR), Cash Reserve Ratio (CRR), and Bank Size (SIZE) have no statistically significant impact on central bank financial performance. Liquidity risk has therefore adversely affected the financial performance of Ethiopian commercial banks. The recommendation is that commercial banks may need to review their credit rating methodologies to ensure that only worthy borrowers lend money to reduce the large number of nonperforming loans. Lending should provide borrowers with some form of financial education, guidance, and advice on how to allocate borrowed funds. Commercial banks are required to hold sufficient capital in accordance with bank operating rules. In order to increase the operational efficiency of banks, it is necessary to improve the capacity development of bankers. The recommendation is that commercial banks may need to review their credit rating methodologies to ensure that only worthy borrowers lend money to reduce the large number of non-performing loans. Lending should provide borrowers with some form of financial education, guidance, and advice on how to allocate borrowed funds. Commercial banks are required to hold sufficient capital in accordance with bank operating rules. In order to increase the operational efficiency of banks, it is necessary to improve the capacity development of bankers. Ethiopian commercial banks can achieve profitability by increasing the size of their banks. Banks therefore have an opportunity to benefit from economies of scale by increasing their market share in the Ethiopian banking industry.

            Mini-Review Pages: 1 - 3

            Analyzing the Comparative Advantage Theory and the Stages of Globalization in the 21st Century

            Yi Zhao

            In the fast-changing world, globalization is becoming a prevalent issue for many companies in the 21st century. Whether the comparative advantage theory is suitable for the current situation and how can the corporation achieve globalization within two stages, this paper may provide a reference in certain extent.

            Mini Review Pages: 1 - 4

            COVID 19 pandemic, Financial Markets and Government Policies Responses: A Review Article

            Sakine Owjimehr

            Knowing how financial markets are affected by pandemics like COVID-19 can be extremely helpful for economic activists and economic planners. Numerous studies have been conducted in this field, and in the present study we try to provide an overview. Reviewing the literature on COVID-19 and financial markets may be done from several perspectives. Here we focus on finding a common answer from among the various studies while emphasizing two points: first is the duration of the effect pandemics have on financial markets; Studies have shown that COVID-19 has a long-term effect on certain financial markets while its effect on others is only short-term. The second involves investigating the effectiveness of government policies regarding COVID-19. The available literature can be classified into two groups. First, studies conducted in countries where governments responded to COVID-19 more rapidly and managed to prevent the disease from spreading. In these cases, the negative effects of COVID-19 were less enduring but government intervention increases long-term uncertainty and causes long-term problems in financial markets. The second category comprises studies that have used the Oxford COVID-19 Government Response Tracker (OxCGRT) index or the Stringency Index (SI) and examined the impact of these indices on stock market returns and volatility. The predominant result in these studies is that government policy responses increase stock market volatility and decrease returns. For the most part, government intervention seems to have been an effective way to stop the COVID-19 pandemic, but policymakers have faced a trade-off between citizens' health and stock market disruptions.

            Research Article Pages: 1 - 9

            Globalization and the Manufacturing Sector in Nigeria

            Boma Cookey

            One of the arguments for the globalization is that it will efficient allocate resources in the world scale and especially make available capital and technology to the developing economies for industrialization and ultimately socio-economic development in the developing countries. Hence, the study took as its objective to examines the relationship between globalization and manufacturing sector development in Nigerian economy. To achieve this, the study adopted the ex-post experimental research design approach and annual time series data from 19986 to 2019. Overall globalization index, economic globalization index, trade openness and foreign direct investment were used as globalization variables, while Nigerian manufacturing sector output contribution to GDP served as proxy and indicator of manufacturing sector development. The analytical method followed the Paseran, Shin and Smith ARDL approach. The unit root test shows that all the variables, apart from FDI are integrated of order 1, that is, I(1) series, while FDI is I(0). Bound cointegration test revealed that there is a stable long run relationship among the variables. Estimate of the ARDL model shows that overall globalization, economic globalization, trade openness and exchange rate variations had negative and significant impact on manufacturing output growth in the long run. FDI had positive, but insignificant effect on manufacturing sector development in Nigerian economy during the period under review. Based on these findings, the study, therefore recommended that, the government should adopt proactive trade policies to protect and give competitive advantage to the domestic manufacturers in the domestic regional and markets.

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