Capital markets
yazdan gudarzi farahani; Mansour Haghtalab; ghazal ghalvazi
Abstract
Capital structure has been one of the most important topics in modern financial theory. Financial resources can have both short-term and long-term effects on financial performance. The timing theory of the company market based on the stock price has specified the time of stock release. When the ratio ...
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Capital structure has been one of the most important topics in modern financial theory. Financial resources can have both short-term and long-term effects on financial performance. The timing theory of the company market based on the stock price has specified the time of stock release. When the ratio of the market value to the book value of the company's shares is high, the management has issued shares. The purpose of this paper was to investigate the role of stock market timing theory on capital structure. Therefore, for this purpose, the effect of the company's past market values, fixed assets ratio, profitability and company size on the capital structure index has been evaluated. In this regard, statistical information has been used in the period of 2013-2021 and panel data method. The statistical sample of the research included companies active in the electricity industry and power plants. In this study, the capital structure of the company is considered based on the ratio of equity and changes. The results obtained from three fitted regression models show that the company's past values (the ratio of market value to book value) had a negative and significant effect on the capital structure, capital structure changes and share issuance. According to the obtained results, it is suggested that due to the dependence of the capital structure of the companies active in the electricity industry on the ratio of debt and bank financing, long-term and short-term planning in the financial sector of the company through the analysis of the market value of the company and Also, the profitability of the company should be done.
Financial Economics
Ahmad Agheli; Seyyed Ali Paytakhti Oskooe; Nader Mehregan; Monireh Dizaji
Abstract
1- INTRODUCTION
Considering the role of the capital market in the economy of countries and studying the performance of this market has a particular importance. One of the factors that affect the performance of the capital market is the decisions made regarding the financial structure of companies’ ...
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1- INTRODUCTION
Considering the role of the capital market in the economy of countries and studying the performance of this market has a particular importance. One of the factors that affect the performance of the capital market is the decisions made regarding the financial structure of companies’ performance in this market. Today, in fact, the credit rating of companies is largely dependent on their financial structure, or in other words, their capital structure, and in fact, the basis of production and service provision depends on the way financial funds are provided and used. On the other hand, the financial structure of each company is an early warning regarding the number of financial resources of the company, and it is necessary to determine the factors affecting their financial structure in the strategic planning of companies. Many variables affect the financial structures of stock companies, among which we can mention financing with Islamic instruments. Sukuk is one of the important financial instruments and conforms with the Islamic Shari'ah, which provide an alternative source of funding, especially for large (very active) companies, and more efficient sources compared to conventional bonds.
2- THEORETICAL FRAMEWORK
In financial field, the way in which the company invests is called financial structure. Financial structure, or in other words capital structure, describes the long-term capital financing of a company, which represents debt and equity, and is a type of permanent financing that supports the growth of the company and related assets. One of the most important functions of the Islamic financial system is to facilitate financial flow and guide it towards the most efficient type of investment, and as a facilitator of financial flow, it gives producers the opportunity to move economic resources with greater speed and accuracy by relying on monetary and financial resources. The existence of these types of financial instruments increases capital efficiency and optimal allocation of resources in companies. Since Islamic financing can lead to global financial stability and economic growth; Therefore, wider access to financial services improves social participation and increases market power, and ultimately strengthens protective laws and solves problems and issues of financial development, and increases profitability and improves the financing process of companies.
3- METHODOLOGY
This research is considered as applied research in terms of its objective; Because it examines the relationships between variables, the subject of the research is the Tehran Stock Exchange Organization in terms of location, and the time scope of the research is from the fiscal year 2010 to 2019 by using the annual data of the companies. The 83 companies were selected as the statistical sample used in the research. In order to estimate the effects of the variables, the panel data technique with Johnssen's approach is used. In this research, the variable of financial structure is used as dependent variable and the variables of ejare sukuk, murabaha sukuk, sode sukuk, istisna sukuk and mosharekat sukuk are used as explanatory variables.
4- RESULTS & DISCUSSION
According to the empirical results of this study, all new Islamic financing instruments had a positive effect on the financial structure index (ratio of capital to assets). In the long run, ejare sukuk, murabaha sukuk, sode sukuk, istisna sukuk and mosharekat sukuk explain 7.06, 20.32, 0.07, 3.32 and 0.84 percent respectively, of the changes in the financial structure index.
5- CONCLUSIONS & SUGGESTIONS
The present study investigates effectiveness of the financial structure of listed companies from new Islamic financing instruments (Sukuk) by using the panel data technique with the Johanssen approach. For this purpose, the data of 83 listed companies on the Tehran Stock Exchange has been used during the years 2010 to 2019. According to the research results, instruments had a positive effect on the financial structure index (ratio of capital to assets). Accordingly, the issue of sukuk can significantly improve the financial structure of companies. Companies should use a complete combination of modern financing tools (Sukuk) to achieve benefits such as increasing liquidity, increasing shareholders' wealth and increasing diversity in financing sources.
alireza karami; Majid Sameti; Komail Tayyebi; leila torki
Abstract
Based on the list released by the international organization for standardization (ISO) on January 1st, 2014, there are almost 250 types of currencies in the world for product/service trade and financial flows. The most obvious types of currency are the US dollar, Canadian dollar, Euro, British pound ...
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Based on the list released by the international organization for standardization (ISO) on January 1st, 2014, there are almost 250 types of currencies in the world for product/service trade and financial flows. The most obvious types of currency are the US dollar, Canadian dollar, Euro, British pound , Japanese Yen, Switzerland Frank, Chinese Yuan, etc. (Evans, 2014).
Exchange rate is determined by its supply and demand while the governments can affect it through different ways. The amount and nature of government involvement in the exchange rate markets define the exchange rate systems. In fact, the exchange rate systems are a framework for determination of the price. There are generally three groups of exchange rate systems including floating, fixed, and managed system. In the floating exchange rate system, the exchange rate is only determined by the market forces without the involvement of the government. The exchanges change continuously because the exchange supply and demand have volatility. In the managed exchange rate system, the exchange rate can be changed while the governments participate in the exchange markets to affect the exchange rates. In the fixed exchange rate system, the governments demand for stabilizing the exchange rates through participation in the market or regulating systems (Rittenberg, 2012).
Theoretical Framework
Selecting an appropriate exchange rate system is of great importance for an economy because it affects the exchange rate and other economic variables of a country (e.g. the general level of prices and production). Determination of the exchange rate system after the collapse of Bretton Woods system became more important because there was already a kind of fixed and somewhat adjustable exchange rate system in the countries. After the collapse of Bretton Woods system, the countries such as the petroleum exporting countries questioned which exchange rate system is more important for their economies. In such countries, the petroleum export was considered as a main factor affecting the exchange rate because this factor affects both export and government revenues as well as the exchange rate system in such countries. One of the important frameworks to select the exchange rate system was the exchange rate protective property. Based on this framework, each exchange rate system protecting the economy of the country against the entered shocks is appropriate for its economy (Komijani&Arabi, 2002).
Methodology
The main purpose of this study was to determine the framework exchange rate system for OPEC member countries during 1990-2015. By using the method and results of this study, the exchange rate markets and policymakers can select an appropriate system for their countries to have the minimum volatility for the exchange rate resulting in no negative effect on the economy of their country.
In this study, the models of Argy, Multiple-criteria and decision-making were used to select the proper exchange rate system in OPEC member countries.
In the first model, after explaining the Argy model and presenting six price and production functions for all fixed, floating, and managed exchange rate systems, Chow, Hausman, Breusch and Pagan, Heteroscedasticity of variance, and autocorrelation tests were performed by STATA software. Then, based on the data collected for 1990-2015, the parameters of the above six parameters were estimated by GLS method and the production and price values were calculated by Excel software. Finally, the loss function was obtained for each country and exchange rate system by calculating and adding the numerical value of production and price variance.
Results and Discussion
The results showed that the managed rate system was selected as an appropriate system for all OPEC member countries except Ecuador, Qatar, and Nigeria because the loss function value for this type of exchange rate system was less than the other exchange rate systems. The appropriate exchange rate system for all above mentioned countries was the fixed exchange rate system. As a general result in the studied period, the proper exchange rate system for OPEC member countries was the managed exchange rate system. In the second model, the analytical hierarchy model was used. so that, the factors affecting the evaluation and selection of an appropriate exchange rate system were categorized in three groups of fixed, managed, floating, and 33 sub criteria. The results obtained from by using the weight of qualitative data in Expert Choice software showed that the managed exchange rate system with the weight of 70.1% was the most appropriate exchange rate system and floating exchange rate system with the weight of 19.6 and fixed exchange rate system with the weight of 10.6 were respectively after the managed exchange rate system. In addition, in the managed exchange rate system, the export with the weight of 29.8%, general level of prices and production with the weight of 22.5, and economic efficiency with the weight of 13.3% were the most effective sub criteria for the managed exchange rate system.
Conclusions and Suggestions
As the results of both models indicated, the proper exchange rate system for OPEC member countries was the managed exchange rate system.
Based on the important role of exchange rate system in determination of exchange rate and its effectiveness on macroeconomic variables and helping the policymakers to better select the exchange rate system, considering the managed floating exchange rate system is suggested.
fatemeh khani; mahmod hoshmand
Abstract
In recent years, global warming has increased with greenhouse gases such as methane, carbon dioxide, water vapor and nitrogen oxide, causing unhealthy changes in the environment. In this regard, this paper consists of five sections. After the introduction in the second part, we describe the studies carried ...
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In recent years, global warming has increased with greenhouse gases such as methane, carbon dioxide, water vapor and nitrogen oxide, causing unhealthy changes in the environment. In this regard, this paper consists of five sections. After the introduction in the second part, we describe the studies carried out on the subject of the research. Then, in the third part, the topic is discussed. In the fourth section, the model used and the variables of the model have been introduced and the results of the estimation of the model have been presented. In the fifth part, we have also discussed the conclusion. Empirical studies on the topic of research have been divided into two categories (external studies and internal studies). In each of these divisions, the studies that have examined the impact of financial development on environmental pollution, as well as studies that have examined the role of governance on environmental pollution are mentioned. Since the study of the effect of financial development on the environment has recently been considered, this section is part of a series of studies that refer to the relationship between financial development and the environment, and also based on the few studies that link the financial and environmental development have analyzed the different channels of the impact of financial development on the environment. Since this study is an inter-country study, data panel information in the studied country group (selected countries of the oil exporter) was used during the period 1996-1996. Also, the 16 selected oil exporting countries include Algeria, Bahrain, Ecuador, Egypt, Iran, Jordan, Kuwait, Libya, Nigeria, Oman, Qatar, Saudi Arabia, Syria, UAE, Venezuela and Yemen. Before presenting the results of model estimation, descriptive statistics of the variables used in the model (carbon dioxide emissions, per capita income, per capita energy consumption, good governance index, financial development index) have been presented. The innovation of the present study can be argued that this study, taking into account simultaneously two important variables and the effect of financial and governance development on the environment in one of the models with comprehensive and low probability of error (data panel), and also, by choosing the appropriate country group (which has a very high degree of homogeneity according to the subject matter), it has tried to speak with greater confidence about the effect of financial development on the environment. Based on the estimates of the present research, the coefficients related to economic growth, energy consumption with a positive sign, suggest that there is a direct relationship between these variables and environmental pollution. In other words, economic growth in these countries has been accompanied by further environmental degradation, and excessive consumption of energy in the economic growth process has caused more environmental damage. Now, if economic growth is accompanied by financial development, it can be argued that financial development in the long run will lead to technological advancement, resulting in less energy consumption and less pollution. On the other hand, the coefficient of good governance is negative, indicating that good governance is one of the factors that improve the quality of the environment. Improving the governance index reduces the gap between the people and the state in environmental issues and reduces environmental pollution. In order to develop financial market and reduce environmental pollution it is recommended:
Adoption of appropriate policies for the development of the financial sector and reduction of environmental pollution
Provision of resources for the implementation of environmental protection projects, which are often run by the government and other social and economic institutions and require financing.
Due to the lack of capital in low-quality institutions, the reform of financial and institutional infrastructure in order to attract and inflate capital (by regulating environmental regulations and prioritizing more environmentally friendly technologies) is recommended to these countries so that they improve through the level of financial development.
Policy makers should note that financial sector reforms must be implemented step by step with great care in order to prevent financial instability and its impact on environmental degradation.
The positive relationship between GDP per capita and the per capita GDP of carbon dioxide in the selected countries of the oil exporter can be attributed to the inefficiency of the production sector and the lack of access to advanced technology in this section, given these cases with the advancement of production technology and the modernization of the production sector, it is possible to prevent high pollution from high tech contamination.
A positive relationship between per capita energy consumption and environmental pollution can be partly attributed due to the high energy use in the commercial and home sectors and in transportation, in which energy efficiency is not optimized in these sectors. With this in mind, energy consumption optimization policies and raising the level of people's awareness of environmental hazards can prevent energy consumption from contaminating the environment.
mohamad hasan fotros; mehdi ferdosi; saeed isazadeh; hamid sepehrdost
Abstract
Introduction
In most of countries, banks are one of the important parts of the financial system and have a considerable role as fiscal intermediates on getting economic growth and development.Generally, in every country, banks are the main basics of banking system especially in developing countries ...
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Introduction
In most of countries, banks are one of the important parts of the financial system and have a considerable role as fiscal intermediates on getting economic growth and development.Generally, in every country, banks are the main basics of banking system especially in developing countries where capital markets are not developed; hence, evaluating banks’ performance is important. Competition and risk are two important factors that have effect on performance. In Iran, along with entry of private banks, demands for different types of bank services has increased in that banks are looking for more proportion of market share and more profitability.
The goal of the present research is to analyze profitability, as a performance index, of banking system in Iran. This research can be distinguished from former studies in that it uses variables like diversification index of bank operations, capital market development, and manpower productivity.
Theoretical Framework
In general, there are three theories that explain the relationship between market structure and performance. These theories are SCP hypothesis, efficient-structure hypothesis, and quiet life hypothesis.
The SCP view represents a positive relationship between profitability and market concentration since banks can collude and get a more profit.
Efficient-structure theory was first coined by Demsetz in 1973. He said that bank profitability is extracted from efficiency. He maintained that more efficient banks have a more ability to increase its market shares and sizes that let them be more concentrated and gain higher profit.
The quiet-life hypothesis predicts a negative relation between concentration and profitability in which the firms with a higher market power tend to be inefficient so that its authorities and managers just charge the monopolistic profit and do not make an considerable effort.
Methodology
This research investigates profitability determinants of banking system in Iran during2003-2014.To this aim, 33 banks were selected. Two softwares, namely, Eviews.7 and Stata.14 were used. According to the Tan model (2015), the equation includes:
Where:
ROA: return on assets (profitability index)
Liq: liquidity index
Div: diversification index
Com: index of expenditure management
Pro: manpower productivity
Risk: risk index
HHI: concentration index (Herfindahl- Hirschman)
Cmd: development index of capital market
Results & Discussion
Before estimating the model, test of stationarity must be done. The results of four stationarity tests (LLC, IPS, ADF-Fischer and PP-Fischer) shows that all the variables are stationary.
Homogeneity test should be done in the next step.
Considering autocorrelation and heteroskedasticity problems in model, GLS method should be used for estimation.
The results show that all the coefficient are significant, statiscally. The probability of F-statistic represents that the regression is significant, generally. The R-squred statistic indicates 99 percent of dependent variable variations be explained by the regressors. Variables liquidity, diversification and risk have got a negative effect while the rest, have influenced profitability, positively. When the risk increases one unite, profitability would decreases 0.009 unit.With regard to concentration coefficient, it influences profitability,positively. In other words, SCP hypothesis be confirmed in banking system of Iran. The coefficient of HHI shows that if concentration in banking system increase one unit, profitability would increases 0.193.
Conclusion & Suggestions
This research investigated the determinants of banking profitability in Iran with respectto market structure and risk variables. The results gained using fixed effect and GLS procedures showed that both hypotheses were confirmed,and that concentration influenced profitability positively while risk had a negative effect on it.
Considering the results, the following suggestions are made:
1.Negative sign of the diversification index shows that it is better that banks focus on traditional activities (giving loans).
2.Concentration influences profitability positively; hence, banks should increase proportions from the market.
3.The sign of risk index shows that banks should pay attention to quality of loans or paying them back will be delayed.
4.The positive coefficient of productivity represents the importance of this factor in that banks should protect their staff through several ways like education, and issueslike peyments and salary so thatit can lead to productivity and finally profitability.
Nava Ramezanian Bajgiran; Mostafa Salimifar; Ali Akbar Naji Meydani; Mohammad Salimifar
Abstract
According to endogenous growth theories, knowledge, innovation and technology are the most important factors affecting economic growth. There is also the view that economic growth can in turn expand the innovation and inventions by facilitating access to the financial resources for the entrepreneurs. ...
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According to endogenous growth theories, knowledge, innovation and technology are the most important factors affecting economic growth. There is also the view that economic growth can in turn expand the innovation and inventions by facilitating access to the financial resources for the entrepreneurs. In other words, there may be a circular flow between innovation and economic growth. Despite the importance of innovation in the economy, little has been done about this subject, especially in developing countries. Hence, this study was designed to investigate the causal relationship and correlation between innovation and economic growth in selected MENA countries during 1995 to 2011, using a vector error correction model and panel data econometrics. The findings suggest that there is a one-way causal relationship from innovation to economic growth in both the short and long run; however, there is no correlation between innovation and high-tech exports with economic growth. Also, foreign direct investment, gross capital formation and GDP growth rate of the previous periods, unlike the government expenditure variable, have significant positive relationship with economic growth
Seyed Reza Miraskari; Hamid Hosseini Nesaz
Abstract
This study aimed to identify the relationship between macroeconomic variables and credit risk of Iran's banks using multiple regression analysis was performed based on panel data. For this purpose, the seasonal data of thirteen banks which were listed in Tehran Stock Exchange market and OTC were examined ...
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This study aimed to identify the relationship between macroeconomic variables and credit risk of Iran's banks using multiple regression analysis was performed based on panel data. For this purpose, the seasonal data of thirteen banks which were listed in Tehran Stock Exchange market and OTC were examined during 1388-1393.
The sensitivity analysis used to ensure the reliability of the variables. In this way, the economic variables that are expected to have similar effects, replaced with the original model's variables. It also uses a dummy variable for exchange rate jump effect in the model.
The results show that credit risk is significantly influenced by macroeconomic environment, as the increase in GDP and growth of the stock exchange, the bank's credit risk is reduced, but the unemployment rate and the exchange rate (US Dollar) and inflation has inverse relationship with the credit risk of banks.
Mahdi Khodaparast Mashhadi; Mohammad Ali Falahi; nahid rajabzadeh moghani
Abstract
One of the effective factors in economic growth and development is financial development. Indeed, today, the level of economic development is determined by the level of financial development in the countries. Economists emphasize on the importance of financial market and its key role in economic development ...
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One of the effective factors in economic growth and development is financial development. Indeed, today, the level of economic development is determined by the level of financial development in the countries. Economists emphasize on the importance of financial market and its key role in economic development (e.g., Schumpeter, 1912; Hicks, 1969; McKinnon, 1973; King, 1993; Beck & Levine, 2003). Therefore, identifying the determinant factors of financial development is really crucial. Many studies have been done to identify effective factors in financial development. However, most of them focus on the role of economic factors in financial development. Among all effective factors in financial development in countries, less attention has been given to the role of institutional quality. Hence, the aim of this paper is to study the effect of institutional quality on financial development with emphasis on banking sector in selected countries of Organization of Islamic Cooperation (OIC).
There are two popular theories that explain the role of institutions in financial development. According to Law and Finance Theory introduced by Laporta, Lopez-de-silabes, Shleifer, and Vishny (1997; 1998), differences in the legal protections of investor and creditors and the quality of contract enforcement can explain the different level of financial development between countries. Endowment Theory introduced by Acemoglu, Johnson, and Robinson (2001) explains the relationship between different formation of colonization and institutions during 17-19 centuries. Acemoglu et al. (2001) found that the origin of colonization has a permanent effect on formation of institutions. Beck & Levine (2003) apply both theories for explanting financial development and found that legal origin matters for financial development because legal traditions differ in their ability to adapt efficiently to evolving economic conditions. In addition, some other studies have been done on political economics of financial development (e.g., Pagano & Volpin, 2000; Rajan & Zingales, 2003; Girma & shortland, 2008; Singh, Kpodar & Chura, 2009; Anayitos & Toroyan, 2009; Hung, 2010). All studies in this area have found that quality of institutions play a key role in financial development.
In this study, using panel data method for selected countries of the Organization of Islamic Cooperation (OIC) over 1996-2010, the effect of institutional quality on financial development is examined. This paper investigates the effect of seven institutional quality indicators (i.e., voice & accountability, control of corruption, political stability, rule of law, government effectiveness, regulatory quality and weighed average of six institutional quality indicators) on two financial development indicators, namely, private credit by deposit money banks and other financial institutions/GDP. Information of governance indicators has taken from World Governance Indicators. Based on World Bank definitions, voice & accountability reflects perceptions of the extent to which a country's citizens are able to participate in selecting their government as well as freedom of expression, freedom of association, and a free media. Control of corruption reflects perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption as well as capturing of the state by elites and private interests. Political Stability measures perceptions of the likelihood of political instability and politically-motivated violence, including terrorism. Rule of law reflects perceptions of the extent to which agents have confidence in and abide by the rules of society, and, in particular, the quality of contract enforcement, property rights, the police, and the courts as well as the likelihood of crime and violence. Government effectiveness reflects perceptions of the quality of public services, the quality of the civil service, and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies. Regulatory quality reflects perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development.
Data of two financial development indicators have been taken from World Bank and International Financial Statistics dataset. In this study, the overall governance indicator (weighed average of six institutional quality indicators) is calculated by principal component analysis approach. The results of poolabilty test and Chaw test indicate that panel approach should be applied in all models. In addition, the results obtained from Breusch-Pagn and Hausman tests show that using fixed effect model is appropriate for all seven models.
Among these seven models whose dependent variables are Private credit by deposit money banks and other financial institutions/GDP, two models are selected based on , namely, Akaike Info Criterion and Schwarz Criterion. The results of estimation suggest that overall governance indicators (weighted average of six indicators of institutional quality) and control of corruption have a significant and positive effect on Private credit by deposit money banks and other financial institutions/GDP. From these seven models whose dependent variable is M2/GDP, one model is selected based on related criteria, as the best model. In this model, government effectiveness indicator has a significant and positive effect on M2/GDP. Hence, improving institutional quality is a necessary and essential factor for enhancing financial development and policymakers should apply appropriate policies to improve governments' position in these countries. Through this way, one of the barriers of economic development would be removed.
Mojtaba Poustin chi; Hasan Tahsili; Mostafa Karim Zadeh
Abstract
Banking is one of the most important sectors in each economy. Not only can it affect economic activities but it can also have impact on the stability of economies. Hence, the stability of banking needs a remarkable supervision. Accurses of crises in banking will rapidly grow in other real sectors in ...
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Banking is one of the most important sectors in each economy. Not only can it affect economic activities but it can also have impact on the stability of economies. Hence, the stability of banking needs a remarkable supervision. Accurses of crises in banking will rapidly grow in other real sectors in economy, because the other sectors refer to banks for acquiring finance resources. Recent economic research focused more on factors that might induce banks to take more risks. Competition is one of these factors. Competition is desirable for maximization of social welfare and existence of Pareto efficiency. As in other industries, competition in banking system is also needed for efficiency and maximization of social welfare. However, banking sector has specific features that make it of particular importance to an economy and properties that may distinguish it from other industries. For example, there is a strong interrelationship between banks and other industries.
Theoretical Framework
Economic theory provides an ambiguous answer to the question how bank competition, bank concentration, and financial stability are related. There are two views about the effect of competition in banking sector on banks' stability: Competition – Fragility (Concentration – Stability) view and Competition – Stability (Concentration – Fragility) view. On the one hand, competition reduces the market power of banks, which reduces the discounted value of the profit that banks are expected to earn in the future. This enhances the incentives for banks to take more risk, because the opportunity costs of going bankrupt are lower (Competition – Fragility). On the other hand, market power in the loan market allows banks to charge higher interest rates. This increases moral hazard and adverse selection, which increases the probability of failure of banks (Competition – Stability). Hence, this paper tries to test correctness of these two views.
Methodology
The main purpose of this research is analyzing and evaluating the effect of competition in banking sector from 2005 to 2011. The most important variables of this research are bank stability as a function of market structure, control variables at bank level (loans on assets, size and returns on assets) and control variables at macroeconomic level (growth rate, economic freedom and inflation). In order to estimate this model, panel data method was used. When there are repeated observations in the same set of cross-section units, panel data technique is applied. Our model has balanced panel. That is, we have the same number of observations on each cross-section unit.
When a researcher wants to use panel data technique, he faces with three types of models, namely, pooled model, random effects model, and fixed effects model. The pooled estimation is the simplest case, which proceeds by essentially ignoring the panel structure of the data. Estimation of this model is straightforward. The assumptions we have made correspond to the classic linear model. Efficient estimation proceeds by stacking the data as already shown and using Ordinary Least Squares (OLS). The random effects model has this characteristic; individual effect is uncorrelated with explanatory variables. It is important to stress that the substantive assumption that distinguishes this model from the fixed effects model is that the time-invariant person specific effect is uncorrelated with independent variables. In essence, the random effects model is one way to deal with the fact that T observation on N individuals are not the same as observations on NT different individuals. The solution is straightforward. First, we derive an estimator of the covariance matrix of the error term. Second, we use this covariance structure in our estimator of parameters. While fixed effects model has this characteristic; individual effect is correlated with explanatory variables. Because the fixed effects model starts with this presumption, we must estimate the model conditionally on the presence of the fixed effects.
Results & Discussion
Our results show a significantly negative/positive relationship between competition (concentration) and banks' stability. Among the other variables, banks' assets has the most (significant) powerful effect on stability. Although this paper provides evidence for the competition – fragility hypothesis and the concentration – stability hypothesis, other studies need to be done to explore the mechanisms how competition and concentration in the banking sector affect financial stability. Furthermore, due to the rapid increase in financial interlink ages, measuring competition becomes harder because a single country might not be the relevant banking market.
Conclusion and Suggestion
Although this study provides evidence for the competition – fragility hypothesis and the concentration – stability hypothesis, other studies need to be done to explore the mechanisms through which competition and concentration in the banking sector affect financial stability. According to the results of this paper, the following suggestions are made for policy makers.
[1] Government and central bank should increase their supervision and control on banking.
[2] Policy makers must enact appropriate and effective rules on banks in which they regard minimum requirement of stability.
Hassan Ghalibafasl; Mohsen Izad
Abstract
In this study the aim is to test whether financial market anomalies such as market
risk premium, firm size, the book-to-market ratio, the turnover rate, and momentum
both with and without the inclusion of the market liquidity risk factor in the case of
the Tehran stock exchange can explain stock returns? ...
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In this study the aim is to test whether financial market anomalies such as market
risk premium, firm size, the book-to-market ratio, the turnover rate, and momentum
both with and without the inclusion of the market liquidity risk factor in the case of
the Tehran stock exchange can explain stock returns? To this end, a number of 67
listed companies of Tehran Stock Exchange, based on Criteria filtering method,
have been chosen as a sample. Data are collected on a monthly basis for the period
2008-2011 and by using EViews and panel data. finding indicate that during the
study period, factors such as market risk premium, the book-to-market ratio and
liquidity risk have meaningful correlation with excess return in Tehran Stock
Exchange.
Ali Akbar Naji Meidani; Sayedeh Zahra Shakeri; Fatemeh kobra Bata
Abstract
Stock is an item of financial assets portfolio. So, understanding the factors influencing its value concerns investors. Price changes in the stock Exchange is not only due to internal factors such as dividends, net profit and cash flows of the companies, but also external factors such as macroeconomic ...
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Stock is an item of financial assets portfolio. So, understanding the factors influencing its value concerns investors. Price changes in the stock Exchange is not only due to internal factors such as dividends, net profit and cash flows of the companies, but also external factors such as macroeconomic variables. Automotive industry, in the world, is one of most strategic industries and in Iran has the highest share in GDP after oil industry.
This paper investigates the relationship between stock price of automotive companies in Tehran Stock Exchange and monetary macro variables such as exchange rate and consumer price index by using panel data from 2004 - 2010.
Our results show direct and significant relationship between stock prices of the companies with their dividends and real incomes and so with the exchange rate ,while there is a negative relationship between stock price and consumer price index.
Zahra Nasrollahi; Somayeh Jaafary
Abstract
The effectiue factors on economic growth always have been considered by economic specialists and policy makers. Investment is an example of these factors.
This study examines the relationship between different kind of investment and economic growth in the context of endogenous growth model for target ...
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The effectiue factors on economic growth always have been considered by economic specialists and policy makers. Investment is an example of these factors.
This study examines the relationship between different kind of investment and economic growth in the context of endogenous growth model for target countries of twenty-year vision document over the period of 1990-2010 by using panel data approach.
The results indicate that population growth and the average number of subscribers in the stage of primary school education had a negative and significant impact on economic growth. Also, the effect of domestic investment and the annual inflation rate and export was positive and significant but the effect of exchange rate and FDI was not significant.
Mohmood Hoshmand; Mohammad Daneshnia; Ali Sotudeh; Azam Ghezelbash
Abstract
Always economic growth is one of the most important indicates for economic development. Thus, more production is important and effective way to achieve economic development. In The other hand energy production is considered as the one of the inputs. This study, examines the causality relationship between ...
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Always economic growth is one of the most important indicates for economic development. Thus, more production is important and effective way to achieve economic development. In The other hand energy production is considered as the one of the inputs. This study, examines the causality relationship between energy consumption, economic growth and price among OPEC member countries.
This study uses annual data over the period 1978-2008 by using panel data technique.
Results Our show that a two-way Causality relationship are between the variables as energy consumption and economic growth in the long run ,while the one-way causality relationship is from economic growth to price increase. As well as two-way causality relationship are between the variables energy consumption, economic growth and prices in the short term.
mehdi moradi; amin Rostami
Abstract
In this study, the relationship between the some of corporate governance mechanisms and corporate financial performance after Initial Public Offerings (IPOs) in Tehran Stock Exchange (TSE), based on data from 70 companies during the years 1381–1387 (2003–2009) are examined. Corporate governance mechanisms ...
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In this study, the relationship between the some of corporate governance mechanisms and corporate financial performance after Initial Public Offerings (IPOs) in Tehran Stock Exchange (TSE), based on data from 70 companies during the years 1381–1387 (2003–2009) are examined. Corporate governance mechanisms includes Ownership structure (i.e., Institutional ownership, Managerial ownership), and Board composition (i.e., the percentage of Non executive director or Board independence, and CEO duality) in order to evaluation of the, return on asset and Tobin’s Q is used. Statistical method used to test hypotheses is panel data approach.
Findings show that institutional ownership and managerial ownership are positively related with firm performance after going public. Moreover, the percentage of non executive director improves firm performance. However, there is no relationship between CEO duality and firm performance.
Mohammad javad razmi; Seyed mahdi mostafavi; Mohadese Mahmoodi
Abstract
Economic growth is one of the goals any country that always been considered by policy makers and planners. In recent years researching the relationship between financial development and economic growth is of particular importance and intensive studies have been performed in this field. On the other hand, ...
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Economic growth is one of the goals any country that always been considered by policy makers and planners. In recent years researching the relationship between financial development and economic growth is of particular importance and intensive studies have been performed in this field. On the other hand, financial development is caused by a factor, such as trade liberalization. The usual view is that, trade liberalization with led securities to the efficient investment opportunities will lead to financial market development. But there is a different opinion about this theory they believe trade development is limited to financial economics.
In this regard, this study tries to investigate by using panel data for the group of developing countries that their financial system is the same (The indicators of financial development).
The results of this study show that trade openness policies for financial development that now is a major economy of the countries, is not appropriate, at least in the early stages.
Pourebadollahan Covich Mohsen; Hossein Asgharpur; Firouzi Fallah; Hassan Abdi
Abstract
Regarding the importance and high proportion of Iranian Manufacturing Industries'
export in nonoil export basket, and their impact on economic growth, it is essential
that effective factors on the Manufacturing Industries' export be investigated. This
paper investigates the impact of human capital ...
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Regarding the importance and high proportion of Iranian Manufacturing Industries'
export in nonoil export basket, and their impact on economic growth, it is essential
that effective factors on the Manufacturing Industries' export be investigated. This
paper investigates the impact of human capital on the export of Iranian industries,
using a panel data set of 2-digit ISIC manufacturing industries, over the period 2000-
2007.
Using the number of workers with higher education degree (as a proxy for human
capital), the results show that human capital, manufacturing value added and
nominal exchange rate have positive and significant effects on the export of the
manufacturing industries. In addition, the domestic demand of manufacturing goods
and terms of trade have significant negative effects on these industries export.
Therefore, any effort to expand the higher education is highly recommended.
Ahmad Sabahi; Zahra Dehghan Shabani; Rouhollah Shahnazi
Abstract
Distribution income show how national income divide between economic sectors and social groups. It effect on social justice and many factors effect on it, such as productivity of labor force and employment rate. In this paper, factors affecting distribution income, especially productivity of labor force ...
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Distribution income show how national income divide between economic sectors and social groups. It effect on social justice and many factors effect on it, such as productivity of labor force and employment rate. In this paper, factors affecting distribution income, especially productivity of labor force have been analyzed by Panel Data model for 32 countries during 1998-2005. The results show economic growth rate and inflation rate have positive effect on inequality of income. Distribution Productivity of labor force, Tax revenue and General government final consumption expenditure has negative effects on inequality of income distribution.
