Purpose: One of the known global consequences of inflation is increasing and causing poverty. Most studies follow suit and empirically investigated the effect of inflation on poverty without taking into cognizance that poverty might as well cause inflation. The main aim of this study is to investigate the nature of causality between inflation and poverty in Nigeria.
Methodology This research work employs the famous Toda-Yamamoto causality test to investigate the nature of causality between inflation and poverty in Nigeria for the period 1980-2016, with money supply and exchange rate as control variables.
Findings: The results reveal that there is bidirectional causality between inflation and poverty, none of the variables cause money supply and none of them cause exchanges rate.
Implication: Even though the money supply does not cause poverty directly, it does cause inflation, and inflation in turns causes poverty. Also, the exchange rate does not cause inflation directly, but it does cause poverty, and at the same time, poverty causes inflation. Therefore, the study calls the attention of the policymakers to be cautious in making policies concerning money supply and local currency devaluations (exchange rate) as they cause both inflation and poverty directly and indirectly, consequently, they affect the societal welfare in general.
In recent decades, off-balance sheet activities have emerged as an innovation in banking and finance as it is the easiest source of additional fee income that is beyond a bank's balance sheet activities that avoids regulatory costs, and so they are increasingly popular in banking industries around the world. This paper presents a discussion of the determinants of using off-balance sheet activity in commercial banks in South Asia. The paper also presents an in-depth insight of different theoretical justifications, and empirical literature answers the whys and wherefores of off-balance sheet usage in commercial banks of south Asia. The conceptual model considers the impact of capital size, profitability, loan, credit risk, market concentration, capital adequacy, reserve requirement, real GDP, interest rate spread and inflation on off-balance sheet activities of banks. The Fixed effect and Arellano-Bond GMM method are used on the balance panel of 81 banks to achieve the research objectives of the current study. The results of the bank-specific factors on the off-balance sheet activities (OBSA) support the Market Power Theory. However, the positive and significant relationship between loan ratio and OBSA also supports the market portfolio theory, which argues that the increasing loans offer a continuous risk and can enhance credit risk. Therefore, banks must diversify their portfolios. The positive relationship between the reserve ratio and OBSA provides support for the regulatory and tax hypothesis.
Contribution/ Originality:This study is a pioneer study, providing details about the factors that determine the off-balance sheet activities of South Asian commercial banks. The study has taken a comprehensive set of factors to determine the effects of these bank specific regulatory factors on the bank's off-balance sheet engagement decisions.This study would help in policy building to improve asset quality and optimal portfolio selection for income generation.
Purpose-The prime objective of the current study is to investigate the interdepended of financial decision. In addition to that the impact of different level of managerial ownership on the interdepended of financial decisions is also examined agency theory, pecking order theory and the signaling theory are used as the theoretical lenses to draw the theocratical framework.Design/methodology/approach-The balance panel of 161 nonfinancial firm over the period of five years from 2013 to 2017 is used to achieve the research objectives. Polled OLS, Fixed effect and Random effect estimates are employed to answer the reach questions Findings-The managerial ownership with an average mean ownership of 39 is appeared at the top. Interestingly more than 75 percent firms are being controlled by mangers and in more than 60 percent firms of our sample the controlling managers hold more than 40 percent of shares. The Wu Hausman test is performed to determine the existence of the endogeneity problem. The results indicates that the financial decisions namely cash holding decisions, financing decisions and investment decisions has significant impact on each other. Where the managerial ownership is in nonlinear relationship with financial decisions. The results of the study are also providing support to agency theory, pecking order theory and the signaling theory Research implications-The study will be helpful for policymakers, researchers, corporate personals and financial institutions in understanding the interrelationship between financing decisions and the role of managerial ownership in there interdepended.Originality/value-The study is among the pioneering studies on the issue and will provide policy guideline on the said issues
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