Template-Type: ReDIF-Article 1.0 Title: Trade Liberalization and International Trade: A Case Study of China Author-Name: Adel Shakeeb MOHSEN Author-Workplace-Name: British Institute of Management and Technology Author-Email: adelmhsen@hotmail.com Classification-JEL: B17, C33, F00, F21. Keywords: Trade Liberalization; China; Cointegration; Causality Test; Trade Openness. Abstract: 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. Journal: Journal of Economics and Financial Analysis Year: 2020 Volume: 4 Issue: 1 Pages: 1-14 DOI: 10.1991/jefa.v4i1.a30 File-URL: https://ojs.tripaledu.com/index.php/jefa/article/download/51/63 File-Format: application/pdf Handle: RePEc:trp:01jefa:jefa0034 Template-Type: ReDIF-Article 1.0 Title: Determinants of Inflationary Experience in Ethiopia Author-Name: Teshale D. BEDADA Author-Name: Wondaferahu M. DEMISSIE Author-Name: Endeg T. WOLDE Author-Workplace-Name: Commercial Bank of Ethiopia Author-Workplace-Name: Jimma University Author-Workplace-Name: Jimma University, Author-Email: teshaledaba@gmail.com Author-Email: wondm2001@yahoo.com Author-Email: endookoo@gmail.com Classification-JEL: E31, E37, E41, E51. Keywords: Consumer Price Index; Broad Money; Johansen Co-integration; Vector Error Correction Model. Abstract: 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. Journal: Journal of Economics and Financial Analysis Year: 2020 Volume: 4 Issue: 1 Pages: 15-54 DOI: 10.1991/jefa.v4i1.a31 File-URL: https://ojs.tripaledu.com/index.php/jefa/article/download/52/64 File-Format: application/pdf Handle: RePEc:trp:01jefa:jefa0035 Template-Type: ReDIF-Article 1.0 Title: Finance-Growth Nexus and Globalization in Brazil, India, Philippines, Thailand, and Turkey: Evidence from VECM Cointegration Analysis Author-Name: Takashi FUKUDA Author-Workplace-Name: Independent researcher Author-Email: takashi@fukuda-kieg.com Classification-JEL: E44, F43, F62, O53, O54. Keywords: Economic Growth; Financial Development; Globalization; VECM; Cointegration; Granger Causality. Abstract: 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. Journal: Journal of Economics and Financial Analysis Year: 2020 Volume: 4 Issue: 1 Pages: 55-77 DOI: 10.1991/jefa.v4i1.a32 File-URL: https://ojs.tripaledu.com/index.php/jefa/article/download/53/65 File-Format: application/pdf Handle: RePEc:trp:01jefa:jefa0036 Template-Type: ReDIF-Article 1.0 Title: Does Corporate Governance Mechanisms Matter in Explaining Risk Management? Evidence from Non-Financial Kenyan Listed Firms Author-Name: Thomas Kiptanui TARUS Author-Workplace-Name: University of Kigali Author-Email: tarus9116@gmail.com Classification-JEL: G20, G30, G32. Keywords: Board Independence; CEO Tenure; Corporate Governance; Risk Management; Agency Theory. Abstract: 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. Journal: Journal of Economics and Financial Analysis Year: 2020 Volume: 4 Issue: 1 Pages: 79-97 DOI: 10.1991/jefa.v4i1.a33 File-URL: https://ojs.tripaledu.com/index.php/jefa/article/download/54/66 File-Format: application/pdf Handle: RePEc:trp:01jefa:jefa0037 Template-Type: ReDIF-Article 1.0 Title: The Impact of Macroeconomic and Institutional Factors on Economic Growth in the CEE-4 Countries Author-Name: Katarzyna Anna BARAN Author-Workplace-Name: Technical University of Darmstadt, Author-Email: kbaran64@gmail.com Classification-JEL: C11, C22, O43, O47. Keywords: Economic growth; Macroeconomic policies; Institutions; Central and Eastern European countries; Bayesian Model Averaging. Abstract: The aim of the study is to examine the main factors driving economic growth in the CEE-4 countries since the transition with the main focus on macroeconomic policies and institutions. The building of a market economy in the region required deep macroeconomic reforms and the creation of a wide range of institutions and business practices needed to support those reforms. Since the collapse of communist regimes, the CEE-4 countries have adopted in the early 1990s a set of policy principles focused on fiscal discipline, interest rate liberalisation, trade and financial liberalisation, privatisation, deregulation and openness to direct foreign investment. Macroeconomic stability by itself, however, does not ensure high rates of GDP growth. In most cases, sustained high rates of growth also depend upon key structural measures, such as regulatory reform, civil service reform, improved governance, and banking sector reform. Institutions of central planning in the CEE-4 region were one of the key barriers to growth prior to the transition. As the development of institutions has been necessary to support the well-functioning market economies in the CEE-4 region, the study also examines deep factors of production – institutions – in addition to the demand-side and the supply-side factors affecting output. Journal: Journal of Economics and Financial Analysis Year: 2020 Volume: 4 Issue: 2 Pages: 1-26 DOI: 10.1991/jefa.v4i2.a34 File-URL: http://ojs.tripaledu.com/index.php/jefa/article/download/55/67 File-Format: application/pdf Handle: RePEc:trp:01jefa:jefa0038 Template-Type: ReDIF-Article 1.0 Title: Drivers of Horticultural Exports in Kenya Author-Name: Silas Kiprono SAMOEI Author-Name: Edwin Kipyego KIPCHOGE Author-Workplace-Name: Moi University Author-Workplace-Name: University of Eldoret Author-Email: kipronosamoei@gmail.com Author-Email: edwinkipchoge@gmail.com Classification-JEL: C10, E10, E31, F00. Keywords: Horticultural Exports; Co-integration; Error Correction Model. Abstract: This study examines major drivers behind horticultural exports in Kenya for the period 2005-2017. Using co-integration model, the study finds out horticultural exports, interest rate, exchange rate, and inflation rate are co-integrated in long-run. These co-integrated series converge to their long-run equilibrium at a speed of 8.53% on each period at 1% statistically significance level. More specifically, the study explores that the interest rate has negative influence on horticultural exports of Kenya, while inflation and exchange rates have positive impact. Thus, the study recommends that the government in Kenya should reduce interest rates using their monetary policies and stabilize macroeconomic environment in order to increase horticultural exports such as targeted exchange rate through application of foreign reserves adjustments. Journal: Journal of Economics and Financial Analysis Year: 2020 Volume: 4 Issue: 2 Pages: 27-44 DOI: 10.1991/jefa.v4i2.a35 File-URL: http://ojs.tripaledu.com/index.php/jefa/article/download/56/68 File-Format: application/pdf Handle: RePEc:trp:01jefa:jefa0039 Template-Type: ReDIF-Article 1.0 Title: Relationship between Unemployment and Macroeconomics Aggregates: Evidence from Bangladesh Author-Name: Mohammad Mushfiqul Haque MUKIT Author-Name: Assim Ibrahim ABDEL-RAZZAQ Author-Name: Mohammad Safiqul ISLAM Author-Workplace-Name: Jahangirnagar University Author-Workplace-Name: Prince Mohammad Bin Fahd University Author-Workplace-Name: Jahangirnagar University Author-Email: mushfiq.mukit@gmail.com Author-Email: aiabdelrazzaq@gmail.com Author-Email: msislam@gmail.com Classification-JEL: B22, B23, E24, E26, E31, J24, R23. Keywords: Unemployment Rate; Economic Growth; FDI; Inflation Rate; Co-integration. Abstract: This paper examines relationship of unemployment rates with other macroeconomic aggregates in Bangladesh over 1991-2019 using robust econometric analyses. It sheds a light on the fact that GDP growth rate, inflation, and foreign direct investment flows have statistically significant impacts on unemployment rate both in short-run and long-run. More specifically, the paper documents that unemployment rate, GDP growth rate, inflation rate and foreign direct investment flows are co-integrated in long-run at 5% significance level. Using Vector Error Correction analysis, the paper finds that co-integrated series converge it their long-run equilbruim at a speed of 17.24% per annum at 1% significance level. In case short-run, the study finds that a unit increase in GDP growth rate decreases unemployment by approximately 0.0159 units in short-run at 1% statistically significance level. Likewise, a unit increase in inflation rate will lead approximately 0.004 units drop in unemployment rate at 10% significance level. Plus, it also observes that a unit in Foreign Direct Investment flows causes 0.005 units decrease in unemployment rate in short-run at 5% significance level. Journal: Journal of Economics and Financial Analysis Year: 2020 Volume: 4 Issue: 2 Pages: 45-61 DOI: 10.1991/jefa.v4i2.a36 File-URL: http://ojs.tripaledu.com/index.php/jefa/article/download/57/69 File-Format: application/pdf Handle: RePEc:trp:01jefa:jefa0040 Template-Type: ReDIF-Article 1.0 Title: Forecasting Value Added Tax Revenue in Ghana Author-Name: Michael Safo OFORI Author-Name: Abel FUMEY Author-Name: Edward NKETIAH-AMPONSAH Author-Workplace-Name: BlueCrest University College Author-Workplace-Name: University of Ghana Author-Workplace-Name: University of Ghana Author-Email: michael.ofori@bluecrest.edu.gh Author-Email: afumey@ug.edu.gh Author-Email: enamponsah@ug.edu.gh Classification-JEL: C53, H20. Keywords: Value Added Tax (VAT); Forecasting; ARIMA; Holt linear trend; Fiscal Policy Ghana. Abstract: Governments need accurate tax revenue forecast figures for good economic planning but there seems to be no consensus on which method is the most suitable to deliver reliable results leading to differences in the choice of technique from one country to another. This study therefore forecasts Ghana’s Value Added Tax (VAT) Revenue by comparing two methods, ARIMA with Intervention and Holt linear trend methods to establish the one with more precise predictive powers for VAT Revenue. Monthly VAT revenue data from the year 2002 to 2019 is used in the analysis. The findings show that ARIMA with Intervention method outperformed the Holt linear trend model in terms of accuracy and precision. A comparison of predicted results from the ARIMA with intervention model from 2017 to 2019 with Ghana Revenue Authority’s VAT revenue targets based on their in-house forecasting model for the same period reveals that the ARIMA with intervention approach performs better than the in-house forecasting model of the VAT authority. In this case, the study recommends the ARIMA with intervention method to the tax authority for consideration in its forecasting. Journal: Journal of Economics and Financial Analysis Year: 2020 Volume: 4 Issue: 2 Pages: 63-99 DOI: 10.1991/jefa.v4i2.a37 File-URL: http://ojs.tripaledu.com/index.php/jefa/article/download/58/70 File-Format: application/pdf Handle: RePEc:trp:01jefa:jefa0041