JEFA is a peer-reviewed academic journal publishes high quality research studies, both empirical and theoretical, in the disciplines of economics and finance twice in annum. The journal employs three-stage double-blind peer review process and does not impose any fees at submission, review, and production stages. It adopts a BOAI-compliant open access policy providing an immediate public-free access to its contents and indexed at EconPapers, EconBiz, EconIS, IDEAS, RePEc, DOAJ, ROAD, OpenAIRE, and etc.
ISSN (Print): 2521-6627 | ISSN (Online): 2521-6619
This study investigates the effect of trade liberalization on international trade in China over the period 1980-2018. Trade openness is used as an indicator of trade liberalization. Unit root test, cointegration test, Granger causality tests, and IRFs were used in this study. The cointegration test shows that trade openness has a positive effect on exports and imports. Trade openness has a greater effect on exports than imports. Besides, export and import are positively related to gross fixed capital formation and inflation, but negatively related to oil price. Furthermore, the Granger causality test indicates that there are bidirectional short- and long-run causality relationships between trade openness and exports, and also between trade openness and imports.
The main aim of this study is to investigate the determinants of inflationary experience in Ethiopia. The study focused on economic and econometric criterion to examine the long run and short run impacts of macroeconomic variables on inflation in Ethiopia. In order to accomplish this paper, the study has employed time series data for the period from 1974/75 to 2014/15. To check for the stationarity of the variables, the researcher has used augmented dickey fuller and Phillips-Perron unit root test and all variables become stationary at first difference. Then, long run and short run estimates had been examined by using Johansen Co-integration methodology and Vector Error Correction approach with lag length of two. The data on macroeconomic variables were taken from National Bank of Ethiopia, Ethiopian Economic Association and World Bank database. The findings of the study indicated that in the long run consumer price index has found to be positively influenced by money supply, real gross domestic product and overall budget deficit in which these all variables are positive and statistically significant determinants of inflation. The growth of money supply should be continually kept in control, given its long run potential impact in accelerating inflationary pressure to ensure stable price level in an economy and keep on the growth of real gross domestic product with single digit inflation rate and displaying a high sense of transparency in fiscal operations bring about a realistic budget deficit that would serve as incentives to productivity and stable general price level.
We investigate the causal relationship between financial development and economic growth―the finance-growth nexus―in Brazil, India, Philippines, Thailand, and Turkey by controlling for the globalization indicators of trade openness, foreign direct investment (FDI), and portfolio investment, together with the structural break dummy. Our sample countries of different regions have various experiences of developing and liberalizing their financial systems and external sectors as well as financial crises. Time series data span over the period 1974-2017, and two financial indicators of size and efficiency are used in estimation. Implementing the cointegration and Granger causality tests in the framework of the vector error correction model (VECM), we find that: 1) financial size and economic growth are in a positive, bilateral relationship in all the sample countries, although that of Turkey is more inclining toward economic growth causing financial size; 2) when financial development is proxied by financial efficiency, the results are different among the five countries; and 3) although theoretically expected to be contributive, the globalization indicators of trade openness, FDI, and portfolio investment exhibit either a positive or negative impact on financial development and economic growth. Based on empirical findings, we argue that policy-makers should design and develop financial sector polices and growth strategies fully considering the nature of their countries’ own institutional and structural characteristics.
The study aims to examine the relationship between corporate governance and risk management in Kenyan non-financial companies. It samples 41 listed non-financial firms in Kenya for the period of 2010-2017. Utilising binary logistic regression analysis technique, the study finds out that board independence and CEO tenure have negative and significant effects on risk management at 1% statistical significance level; while board financial expertise has a positive and significant effect on risk management 5% statistical significance level.
The study concludes that the independence of board members is detrimental to hedging activities. Long-tenured CEOs are less likely to use financial derivatives tools to hedge risks while financially knowledgeable boards have a better understanding of the sophisticated financial tools involved in risk management mechanisms. The study recommends the reduction of board members' independence and CEO tenure in order to increase hedging activities. The board members must have financial expertise, so that they can ascertain risks which are valuable to shareholders.
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