Relationship Between Stock Prices and Macroeconomic Variables (A Case Study Of Karachi Stock Exchange)
The intention of this study is to investigate the relationship between the stock prices of Karachi Stock Exchange and macroeconomic variables in Pakistan. The monthly data of all macroeconomic variables and stock prices was taken from January 2001 to May 2012. In this study, the variables which have not been previously studied by the researchers in Pakistan were also included. This study also incorporated the effect of market crash 2008 and its implicationsfor Karachi Stock Exchange. The statistical techniques, which were employed in this study, include Johansen Co-integration test, Vector Error Correction Model (VECM) and Granger Causality test. The results of the study revealed the presence of long-run association between macroeconomics variables and stock prices.
Exports, Exchange Rate and Money Supply showed a positive and significant relationship with stock prices, Inflation and Discount Rate indicated a negative and significant impact on stock prices whereas index of industrial production had a positive but insignificant relationship with stock prices. Market crash had a significant negative relationship with stock prices and prolonged crises affected the stock prices significantly. The error correction term was resulted from VECM which was significant and indicated short term adjustments towards the equilibrium path. The results of Granger Causality Test showed a unidirectional relationship between CPI, ER, D and KSE, no causal relationship between EX, i and KSE, unidirectional causal relationship between KSE and IIP as only KSE granger cause IIP where as a bidirectional causal relationship exhibited between M2 and KSE as both the KSE and M2 granger cause each other.
Effect of climate change on Agriculture Production of Punjab (Pakistan)
Climate changes became international problem. These changes affect the agriculture sector badly. Basic purpose of this study to check the effect of climate changes on the rice, wheat, Sugar Cane and Cotton production of Punjab. Secondary data of rice, wheat, Sugar Cane and Cotton crops were used. Seven districts of Punjab were selected for analysis. These districts are Multan, Bahawalpur, Faisalabad, Lahore, Jhelum, Sialkot and Sargodha. Panel data are used from period 1980 to 2010. Data is taken from Pakistan Bureau of Statistic and Pakistan Meteorological development. Fixed Effect model used to analysis the data. Annual Productions of rice, wheat, Sugar Cane and Cotton crops were used as a dependent variable and temperature and rainfall used as independent variables. The finding shows that temperature has positive effect on agricultural production but it became harmful after the optimum point .Rainfall do not affect significantly to the Agriculture production of Punjab. Deficiency of water fulfill through Tube-well and Cannel.
Key Word: Agriculture Production, Temperature, Rainfall, fixed effect model, climate, Punjab
External Debt Economic Growth and Employment in Pakistan
The main objective of the study is to reinvestigate the impact of external debt on economic growth and employment in different time horizon for Pakistan. The rapid structural shift provides rationale for the consideration of time varying growth and employment relationship of external debt. For this reason, study takes into account the assumption of non-constancy of parameter over the time to identify the most likely misleading constant relationship over the years. Study used auto regressive distributed lags technique to gauge the long run and short run relationships, while rolling window regressions are employed to answer about the instability of dynamic parameters. We also analyse causality inferences with the help of multivariate VARs system following Toda and Yomemto (1995) procedures. Further, we extended our work to investigate the time varying Granger (non)-causality for sub-samples and full-samples in order to capture any structural shift in causality inferences. Empirical findings confirm the parameter shift in both models and indicate that external debt dissuades economic growth and employment at different time horizons.
Globalization and Employment: Evidence from Pakistan
Globalization is one of the main contemporary issues. No country can survive in isolation. Globalization has both benefits and costs and the effects depend on the host country’s socioeconomic and politicalfactors. Present study investigates the impact of globalization on employment in Pakistan. Globalization is represented by proxy variables such as trade openness, inflow of foreign direct investment and workers remittances. In addition to these proxy variables globalization index is also used. Empirical analysis is done by using time series data for the period of 1973-2009 by employing Johansen co-integration technique and ECM for short run analysis. Results show that foreign direct investment, workers remittances and economic dimension of globalization are creating employment opportunities not only in short run but also in long run in Pakistan, while trade openness and social and political dimension of globalization negatively affects the employment due to some external and internal imbalances in the country.
Dynamics of Microfinance Growth in Multan District
The aim of this study is to assess the efficiency of microfinance institutions in Pakistan using quarterly data from microfinance connect of second quarter of 2001 and second quarter of 2006 for comparison of two different time span. To estimate efficiency of microfinance institutions in Pakistan, the Data Envelopment Analysis are employee. Out of 52 microfinance providers in Pakistan, only 15 microfinance institutions is sample across the industry based on profile of gross loan portfolio of each microfinance provider. To find out the technical efficiency (i.e constant returns to scale, variable returns to scale and scale efficiency), Malmquist productivity Index and total factor productivity of the microfinance institutions, two input variables (loan amount disbursed, total staff) and output variables (gross loan portfolio and number of active borrowers) are used to estimate the efficiency of microfinance providers in Pakistan. The results of the study conclude that MFIs in Pakistan are working below their optimum scales measurements and only one microfinance provider (Khushali Bank) out of 15 in our sample in 2002 and (Thardeep rural support program) in 2006 works on efficient frontier and while others are inefficient. It recommended that the institutions should increase loan amount disbursed and invest resources to the train thier staff. Moreover, microfinance providers should expand by increasing number of offices to assist community.
Key Words: Microfinance, Microfinance Efficiency, Technical Efficiency, Scale efficiency, Total Factor Productivity, Malmquist Productivity Index, CRS, VRS.
Impact Of Microfinance On Income Generation And Living Standards:
This thesis analyzes the role of microfinance in poverty alleviation and improving the living standard of poor households. A survey of 400 active clients of the Khushhali Bank (a Microfinance Bank) in Dera Ghazi Khan and Layyah districts of the Punjab (Pakistan) has been undertaken for this purpose. Statistical and econometric techniques are used to explore the impact of the microfinance. It is found that microfinance credit positively affects income generation and consumption level of poor; and the impact on productive activities is higher than the consumption
The Contribution of Trade Openness and Political Stability in Promoting Inclusive Growth in Case of Pakistan
The main objective of the study is to find the impact of trade openness and political stability in promoting inclusive growth of Pakistan. The study draws the attention of policy-makers towards the new development pattern that emphasizes on income as well as non-income dimensions of reducing poverty and inequality. The increasing political restlessness in the country and declining exports in the recent years have attracted the attention of many policy makers. Therefore, the impact of trade openness and political stability on inclusive growth is examined for the period of 1980-2016 using Auto Regressive Distributed Lag (ARDL). The relationship among variables: inclusive growth, trade openness, political stability, human capital and gross fixed capital formation is analyzed. To find the presence of long run relationship among variables, the bound testing approach is applied whereas Error Correction Model (ECM) is used to find out the short-run relationship among variables. The impact of trade openness on inclusive growth of Pakistan is weak due to exports of raw materials and imports of capital goods or finished goods along with weak conflict management and low quality institutions in the country. The results of long-run relationship indicate that trade openness has a significant negative relationship while human capital has a significant positive relationship with inclusive growth. However, gross fixed capital formation and political stability both have a positive relationship with inclusive growth but it is not statistically significant. The findings recommend that exports of final products can give rise to economic growth and quality conflict management institutions will be helpful for promotion of inclusive growth in society and beneficial for the betterment of the economy of Pakistan.
Key Words: Inclusive Growth, Trade Openness, Human Capital
Socio-Economic Determinants of Child Labor in Pakistan
The child labor is defined as “the children who neglect their childhood and are not able to have critical conveniences that a child must have”. The United Nations Children Fund classified the child labor according to the child age and number of hours worked per week: “Age five to eleven, at least one hour of economic work or twenty eight hours of domestic work; Ages twelve to fourteen, at least fourteen hours of economic work or twenty eight hours of domestic work and Ages fifteen to seventeen at least forty three hours of economic work or domestic work”. Child labor entails “work which is of such a character that it is harmful to children’s schooling or destructive to their health and development”. This study examines the socio-economic determinants of child labor in Pakistan. The data have been taken from Pakistan Labor Force Survey 2014-15. The determinants of child labor are divided in characteristics such as (i) personal characteristics (age and gender of children), (ii) social characteristics (child’s enrollment in school, child education and education of household head), (iii) economic characteristics (wages of household head and occupation of household head), and finally (iv) household characteristics (household type, province and region). Child labor is of binary nature: that is whether a child participates in labor market or does not participate. Logit and Probit model have been used to find out the determinants of child labor in Pakistan. The results show that male children are working more as compared to female children. It is found that child enrollment in school has negative and significant impact on child labor. Child’s years of education as well as household head’s years of education have negative and significant impact on child labor. Wages of household head also have negative and significant impact on child labor. Child labor is found to be higher where household head belongs to unskilled occupation, agriculture work and sales work as compared to when the household head is assistant professional or professional worker. Household type of joint family system has strong negative effect on child labor. Child labor found to be higher in Punjab, Sindh and Khyber Pakhtunkhwa as compared to Baluchistan. It is found that urban children work less as compared to rural children.
Health is defined as a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity. Basic objective of health is to enhance the quality of human life. Healthy people are better able to learn, work and contribute in economic growth. Good health is important to improve the standards of living of a nation. Healthy people prefer to work rather than sit idle. Barro and Lee (1996) analyzed that improvements in health reveals higher growth rate. Similarly Holyachi and Kengnal (2017) found positive relation between health expenditure and economic growth. A number of studies analyzed the impact of education on economic growth. However, the present study has incorporated the various health indicators like life expectancy, infant mortality rate and health expenditure in order to analyze the impact of health on economic growth. The study uses per capita GDP as proxy for dependent variable. The study employs econometric techniques like autoregressive distributed lag model (ARDL) on time series data for empirical analysis. The study found an important impact of various health indicators (life expectancy, infant mortality rate and health expenditure) on the economic growth in Pakistan. A positive effect in terms of life expectancy on economic growth led to an improvement of economic activity through additional years on longevity of the working age population. Expenditure on health was found to exert positive impact on economic growth in the long run. This shows that investment in individual’s health is important for a sustainable economic growth of the country.
Effect of Foreign Direct Investment on Trade: A Comparative Analysis of Pakistan and China
Present study analysis the causal links of FDI with trade in Pakistan and China using time series data of both countries from 1972 to 2016 duration.. The sources of data are World Bank and Ministry of Finance Pakistan. The impact of FDI on trade in case of Pakistan and China have been analyzed by employing ARDL Model as variables have mixed order of integration i.e., I(1) and I(0). The results show that there exists the relationship of co-integration among the variables. In the first model, the relationship between the trade and FDI, employed labor force, Inflation, and current account deficit exist. The results show that there exist the relationship among trade volume, exchange rate, FDI and employed labor force. It is evident from the results that the co-integration can be confirmed from the F-stats, which is going to exceed the upper bound limit. The value of estimator of FDI for trade which shows that there is significant and positive impact of FDI on trade which means FDI is going to increase the trade in case of Pakistan. While the impact of exchange rate on trade is also positive and significant. Inflation has also positive impact on the trade. the short run impact indicate that exchange rate has positive associated with trade. The size of the economy proxies by the RGDP is also has significant and positive impact on the trade in case of Pakistan. The mixed findings revealed by the past studies, in addition to the findings of this study. The coefficient of foreign direct investment is 3.2143 which show positive impact of FDI on trade for Pakistan. The coefficient of CEt-1 is (-.39822) for short run model, means that it will take half of the ear around to reach lng run from short run. The coefficient of FDI in case of china is positive on trade (TR). Beside this the impact of inflation is also positive and significant. The impact of ER for the export of china is also positive and significant. The research findings show that the relationship between these two can be treated as complimentary as well as substitute. But depending on the circumstances, these can be treated as compliment as well as substitute. The government should focus on macroeconomic environment, like that of exchange rate, current account, the size of the economy, and the FDI in order to increase the trade in the both counties, and to formulate the policy to enhance the bilateral trade among the countries.
An Analysis Of Oil Price Fluctuations And Macro Economics Performance Of Pakistan
Abstract of the Study
The present work is an attempt to investigate the impact of oil price fluctuations on Macroeconomic Performance in Pakistan. The study currently used the time series data from 1976 to 2015 and Johansen co integration test is used to shows the results of analysis. The empirical results explore that Macroeconomic Performance indicator in a powerful tool to measure the cause of oil price fluctuations in Pakistan.Economic Performance Index (EPI) an intuitive tool for finding a country’s economic performance, which is presented by Khramov and Lee (2013). More importantly, all the variables which are used in Macroeconomic Performance indicator like unemployment rate, real effective exchange rate, government spending, government deficit, trade Balance play a very vital role to find the outcome of oil price fluctuations in Pakistan.The ARCHGARCH models are designed to deal with fluctuation problems. ARCH model formed by Engle (1982) and GARCH model is presented by Bollerslev (1986). It was also found that the larger fluctuations of oil prices cause negative collision on the Macroeconomic Performance of Pakistan, because of this negative impact the Macroeconomic performance become statistically insignificant. Finally the study suggest that to faster the Macroeconomic Performance of a Pakistan we should control the fluctuations of oil prices as it is the main indicator to boost the Performance of a country. It is also suggested that the Macroeconomic Performance may also supportive for the other countries to check the impact of Oil price fluctuate
Impact of Trade Liberation on Economics Growth of Pakistan
In this study the relationship between trade liberalization and economic growth is assessed for Pakistan from the 1980 to 2016. The study estimated three equations: First, the impact of labor force growth and physical capital growth is analyzed on GDP; Second, the labor force growth is effected by trade liberalization, inflation, FDI, government expenditures and human capital; Third, physical capital is affected by the same variables which affect the labor force growth. The estimation is carried out using the Generalized Method of Moment technique (GMM). The results obtained from this study show that trade liberalization does not affect the GDP directly. It works through the channel of labor force growth and physical capital growth. The results of this study also indicate that trade liberalization positively impacted the labor force growth and the physical capital growth and in turn these two variables positively impact the economic growth of the country. The results of the study show that besides trade liberalization, foreign direct investment, human capital and government expenditures are the main contributors in economic growth. The finding recommended that government should make export oriented trade policies and should formulate FDI-led policies and direct the government expenditure to education sector to achieve the objective of higher economic growth.
Key words: Gross domestic product (GDP), trade liberalization/ trade openness (TO), Government expenditure (GE), foreign direct investment (FDI), Human capital (HC), Inflation (INF). Generalized Method of Moment estimation technique (GMM).
Impact Of Irrigation Water Supply On Agricultural Output In Pakistan: A Case Study Of Punjab Province
The current study was aimed to investigate the impact of irrigation water supply on agriculture output in Pakistan: A study case of Punjab province. Correlational research design was used in this study. Data was collected through secondary sources. It was analyzed through Statistical Package of Social Science (SPSS). Descriptive and inferential statistics were used to analyze the collected data, following tests were used to test hypothesis, Pearson Correlation, Multiple regression and Analysis of Variance (ANOVA). Findings of study show the significant positive correlation between Irrigation Water Supply (IWS) and Agriculture (AO). Impact of Irrigation Water Supply (IWS) on Agriculture output (AO) was founded significant. Differences were significant on numbers of years that were divided into groups on research variables (IWS and AO).
IMPACT OF REMITTANCES ON HOUSEHOLD WELFARE: A CASE STUDY OF DISTRICT LOWER DIR IN PAKISTAN
This research thesis examines the impact of foreign remittances on household welfare. Primary data are used for this purpose. Data have been collected through questionnaires from 403 households in district Lower Dir, Pakistan. Randomly 35 villages were selected from the entire district for survey. Stratified Sampling Technique has been used for further selection of remittances receiving and non-remittances receiving households. Both types of households (remittances receiving and non-receiving households) are given equal share in total sample size. The study covers information about five main determinants of household welfare, i.e. education, wealth, food, poverty and health. OLS model is used for first three determinants (i.e. education, wealth and food) and Logit & Probit models have been used for last two determinants (i.e. poverty and health).The results indicate that remittances have a positive and significant impact on household education, wealth status and food consumption. Remittances raise the income level of remittances receiving households, which is further used for educational expenditures. Consequently, remittances receiving households spend more income on education than non-receiving remittances households. Remittances and child’s enrolment in schools are positively correlated. In addition, remittances receiving households have been found with higher wealth status and having more assets than non-receiving households. Indeed, total monthly income has a positive and significant impact on household wealth score. The results show that increase in total monthly income leads to pushing up the wealth score of the household. A big share of incoming remittances is used for the purpose of food consumption. The results also conclude that remittances receiving households spend more than non-receiving households for food expenditures. On the other hand, results also show that 76% of the remittances receiving households are above the poverty line and only 8% non-receiving households are above the poverty line. It means that foreign remittances reduce household poverty level. If a household receives foreign remittances then it is more likely for them to be above the poverty line and less likely to be below poverty line. In other words, when a household turns from non-receiving to a receiving household its probability of being non-poor also rises. Results also concluded that 83% of remittances receiving households can fulfill the basic needs of healthcare (i.e. transportation cost on healthcare, hospital and doctor fee, diagnostic tests charges, medicine cost). On other hand, only 36% of remittances non-receiving households can afford the needs of healthcare. The results establish positive relationship between foreign remittances and household’s health status. Remittances receiving households can easily fulfill the needs of healthcare. Moreover, remittances receiving households prefer private hospitals to government hospitals for their treatment. Conversely, remittances non-receiving households prefer medical facilities provided by the government instead of private hospitals.
Keywords: Remittances and Welfare, Education, Wealth, Food, Poverty and Health
JEL Classification: F24, I31, I20, D31, I32, I10