The existing literature concerning governance-value
Manufacturing sector of Pakistan accounts for 19.1 percent of GDP and is the second largest sector of the economy. It grew by 8.4 percent during 2007 as against 10 percent last year. In the manufacturing sector, large scale manufacturing (LSM), plays a vital role and accounts for approximately 70 percent of overall manufacturing [Economic Survey of Pakistan (2006-07)]. During 2006-07 relatively slower pace of expansion exhibits signs of moderation on accounts of higher capacity utilisation, difficulties in the textile sector and lower than expected scale of operations of oil refineries. A number of other factors have also contributed to the low pace of expansion in manufacturing including zero percent growth in raw cotton production which is a critical input for the textile industry, vegetable ghee and cooking oil which comprise about 5.5 percent of the LSM sector, showed uninspiring performance due to unparalleled rise in international palm and soybean oil prices. The performance of the automobile sector has been far less impressive this year as compared to previous five years due to a fall in domestic demand for cars on account of increasing auto financing rates. The higher imports of used cars in the beginning of fiscal year 2006-07 also affected the performance of domestic auto mobile sector.
In this study the risk-adjusted performance of IPO firms listed on the KSE from 2000 to 2012 is analyzed. The objective is to provide insights of the underpricing (first trading day) of IPOs and to find out the determinants of underpricing in the light of asymmetric information and signaling theories. The results indicate that underpricing prevails on the KSE. The level of underpricing with regard to the marked adjusted model is found to be 28.28 percent for the full sample of 83 IPOs, which shows that investors can make a market adjusted profit of 28.28 percent by investing in new issues of IPO firms. The profit opportunity for the day traders is also observed. The year-wise analysis of the level of underpricing shows that the overall amount of level of underpricing decreased over the succeeding years. Furthermore, the level of underpricing is observed in all sectors except equity investment instruments, technology hardware and equipment and personal goods. The risk adjusted performance of IPO firms is also measured with the help of five models by using matched firm techniques. The level of underpricing is observed to be 39.64 percent for the market adjusted model, 42.63 percent for market model, 42.31 percent for CAPM, 42.84 percent for the Fama-French three-factor model and 42.99 percent for the four-factor model. The results indicate that the choice of model does not matter while measuring the risk adjusted returns of IPO firms on the first trading day.
Pakistan is the 15th largest producer of sugar in the world, 5th largest in terms of area under sugar cultivation and 60th in yield. The sugar industry is the 2nd largest agro based industry which comprises of 81 sugar mills. With this scenario, Pakistan has to import sugar which exposes it to the effects of shortage and rising prices in the world. The present sugar crisis has opened up new avenues for researcher to analyse the performance and efficiency of the firms in this sector. Total factor productivity plays a significant role in measuring the performance of a firm which ultimately affects the shareholder’s value. This paper analyses the performance of sugar firms in Pakistan and estimate/calculate the Malmquist total factor productivity growth indices using non-parametric approach. TFP growth is further decomposed into technical, scale and managerial efficiency change using balanced panel data of 20 sugar firms listed on Karachi Stock Exchange for the period 1998 to 2007. The results reflect a tormenting picture for the sugar industry. Overall sugar industry improved technological progress by 0.8 percent while managerial efficiency change put a negative effect on the productivity by a same percentage; as a result the overall total factor productivity during 1998-2007 remained almost static with a decline of 0.1 percent. The analysis of TFP and its sources in individual year for overall sugar industry also presents divergent trend. The research suggests that sugar industry is facing serious productivity growth problems where no increase is recorded in total factor productivity during 1998 to 2007. The sugar industry is lacking in terms of managerial efficiency which could be explained by a general reduction in the quality of managerial decision-making among the best practice firms. Regardless of the reason for this decline, it has potentially serious implications for the longer-term financial viability of these sugar firms. The pattern of TFP growth tends to be driven more by technical change (or technical progress) rather than improvements in technical efficiency.
Purpose This study aims to estimate the amount of money laundering (ML) with multiple proxy approaches and measure the effects of ML on various indicators of the economic and financial sectors. Theoretical justifications are recruited from the parasite theory of organised crime. Design/methodology/approach A quantitative research methodology was used on a balanced panel data set to test the study’s hypothesis through generalised method of moment (GMM). The study sample consisted of 77 countries, and the data was collected for 15 years (2005–2019). Findings A study has found that 1.23% of global gross domestic product is laundered yearly, and there is no noticeable decline in ML activities. Further study has also found that ML has devastating effects on countries, government revenue, foreign investment, economic development, political and peace conditions, bank liquidity, interest rate volatility and exchange rate volatility. The study has not witnessed the negative consequence of ML on countries’ inflation rates. Practical implications Estimates of the study guide policymakers about the volume of resources fleeing and helps them to decide the level of response needed. Further findings help them prioritise the response system according to the area most affected. Originality/value This study is an original contribution by the authors and has studied the effects of ML by computing the amount of ML by four different proxies.
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