Analysing the Impact of Economic Variables on Hang Seng Sub-Indexes Performance in Hong Kong | Chapter 5 | Bubbles and Behavioral Finance

 

In the literature, the relationship between stock price and economic variables was examined in different countries. The findings confirmed the existence of fundamental variables in the Hong Kong stock market. This paper focuses on the case of Hong Kong and extends this issue to the Hang Seng sub-indexes, which include the Commerce and Industry Sub-index, the Finance Sub-index, the Properties Sub-index and the Utilities Sub-index, by applying the Vector Error Correction Model based on the sample from January 2004 to August 2014. Applying Johansen’s (1991) method, cointegration is found between each of the sub-indexes and different sets of economic variables, including price level, money supply, effective exchange rate, long-term interest rate, China stock market and industry-related variables. The results show that the long-run coefficients of some economic variables vary in size and sign in the cointegrating vectors in different sub-index models. Granger causality results conclude that all four sub-indexes are long-run Granger-caused by the economic variables with different speeds of adjustment. The paper also finds that industry-specific variables, relative to the macroeconomic fundamentals, are playing modest roles in determining the long-run equilibrium of the stock indexes. In addition, impulse responses and variance decomposition analysis are performed to show the relative strength of the causal chain between the sub-indexes and economic variables. This paper could draw implications for investors in their decision-making process about how the stock performance in various sectors is affected by different economic fundamentals.

 

Author(s)details:-

 

Hok-Fu Wu
Crowe (HK) Global Corporate Advisory Limited, Hong Kong.

 

Kai-Yin Woo
Department of Economics and Finance, Hong Kong Shue Yan University, Hong Kong.

 

Please See the book here :- https://doi.org/10.9734/bpi/mono/978-81-973195-8-7/CH5

Do Foreign Direct Investment (FDI) Inflows Stimulate Export Performance in Bangladesh? | Chapter 2 | Current Topics on Business, Economics and Finance Vol. 4

 Considering FDI inflows as an main factor to enhance the smuggle performance in developing savings, this study attempts to investigate the connection between FDI inflows and export accomplishment in Bangladesh using historical dossier from 1995 to 2020. The empirical analysis is transported by applying Johansen cointegration approach and Vector Error Correction Mechanism (VECM) in checking the long run relationship in addition to the short run dynamics between FDI inflows and dump receipts. According to the study's findings, the dump receipts have statistically significant definite relationship accompanying FDI inflows in the long run. As the error discipline mechanism indicates that the vital convergence towards long run evenness has not been about a consistent way, therefore the short-term dynamic adaptations are not statistically established. However, this study suggests that the administration should take decent initiatives through infrastructure happening in exporting industries to attract bigger FDI inflows for accelerating improving smuggle performance.

Author(s) Details:

Mohammad Mohidul Islam,
School of Economics, Huazhong University of Science and Technology, Wuhan, China.

Please see the link here: https://stm.bookpi.org/CTBEF-V4/article/view/10180

Determining the Effects of Primary Budget Deficits on Economic Growth in Kenya | Chapter 11 | New Innovations in Economics, Business and Management Vol. 2

 The purpose of this article is to investigate the effects of primary budget deficits on economic growth. The nature and direction of causality between the primary budget deficit and economic growth are examined. These have been contested in both rich and developing countries in recent years. The paper examines the case of Kenya from 1980 to 2016 in order to contribute to the ongoing debate. The data is meant to help policymakers in Kenya achieve macroeconomic stability and long-term economic growth for shared prosperity.

Introduction: A non-interest budget shortfall is referred to as a primary budget deficit. By eliminating non-interest payments from the budget, it assesses the discretionary budgetary posture.

Study Design: The study uses Stata econometrics software to create a quantitative time-series research design.

Study Location and Duration: Evidence from Kenya between 1980 and 2016.

Unit root tests, Johansen cointegration analysis, a dynamic vector error correction model, and a multivariate Toda-Yamamoto Granger-causality representation are all used in the study.

The primary budget deficit, gross fixed capital creation, real interest rate, terms of trade, inflation growth, and financial innovation all have substantial effects on GDP per capita growth in Kenya, according to the research. In both the short and long run, the primary budget deficit has a major impact on GDP per capita growth. The results showed that the main budget deficit had a favourable influence on economic growth in the short term, but that this effect turned negative in the long run. From the primary budget deficit to economic growth, there was a one-way causality.

Conclusion: The primary budget deficit has strong and significant causal effects on economic growth in Kenya, both in the short and long run, according to the study. The data emphasises the necessity for Kenyan authorities to decrease significant primary budget deficits, interest payments, and domestic borrowings, as well as adhere to the golden rule of public finance, in order to promote long-term inclusive growth.

Author(S) Details

Patrick Mugendi Mugo
School of Economics, University of Nairobi, Kenya.

Wafula Masai
School of Economics, University of Nairobi, Kenya.

Kennedy Osoro
School of Economics, University of Nairobi, Kenya.

View Book:- https://stm.bookpi.org/NIEBM-V2/article/view/4747

Determinants of Money Demand in Algeria: An Empirical Study during the Period (1980-2017) | Chapter 1 | Current Research in Science and Technology Vol. 4

This investigation aims primarily to estimate the determinants of the demand function of money in its broad sense, in Algeria during the period 1980-2017. To accomplish this study, Cointegration and Error Correction Model (ECM) have been used. Thus, these tests proved the no stationary of time series which led us to apply the cointegration tests, so in the end we estimate the model with error correction and investigate the impact of shocks on demand for money over the same period. The results of this estimation show that the importance of determinants of money demand in the short and long term are ordered as follows: Real income, the velocity of circulation of money (VM2) in the short and long term, the long-term exchange rate; in the short term its importance diminishes in favor of inflation, which has a decisive effect on the demand for money in the short term. The findings reveal that the money demand function is insensitive to the interest rate, which explains why speculation is generally regarded as a less important reason in Algeria

Author(s) Details
Mohammed Djebbouri
Department of Finance and Banking, Moulay Tahar University, Saida, Algeria

Abdelkarim Mansouri
Department of Finance and Banking, Moulay Tahar University, Saida, Algeria.

Abderrahmane Tahi
Department of Finance and Banking, Moulay Tahar University, Saida, Algeria.

View Book :- http://bp.bookpi.org/index.php/bpi/catalog/book/176