“…for monthly data and could be recorded as up to 20% for annual data as long as the single security asset rather than portfolios of assets are considered as required by the CAPM (Levy, 1974). Mengyun et al (2017) conclude that along with economic and financial factors, non-economic factors also cause volatility of stock return and equity premium. They consider terrorism and political instability in Pakistan as major non-economic factors of volatility in Pakistan stock market.…”
Since the inception of prospects theory of Markowitz (1952) which leads to the development of CAPM has been studied and applied in many ways. Some researchers conclude that CAPM is valid and could be used for valuation of securities and cost of equity. However, critiques arise that CAPM is a single risk factor and remark that a single factor model cannot be generalized in the overall capital markets because the capital market absorbs many other risk factors. The CAPM has been applied to the Pakistan's Stock Exchange to check the validity of CAPM for a sample of 306 individual firms and 18 industrial portfolios. Two pass regression has been applied to check the applicability of CAPM in Pakistan's stock exchange. The results show that CAPM, single factor model is not valid for the technical analysis in Pakistan's capital market. The investors need to use other type of factor models which include other economic and non economic kind of variables for valuation of securities.
“…for monthly data and could be recorded as up to 20% for annual data as long as the single security asset rather than portfolios of assets are considered as required by the CAPM (Levy, 1974). Mengyun et al (2017) conclude that along with economic and financial factors, non-economic factors also cause volatility of stock return and equity premium. They consider terrorism and political instability in Pakistan as major non-economic factors of volatility in Pakistan stock market.…”
Since the inception of prospects theory of Markowitz (1952) which leads to the development of CAPM has been studied and applied in many ways. Some researchers conclude that CAPM is valid and could be used for valuation of securities and cost of equity. However, critiques arise that CAPM is a single risk factor and remark that a single factor model cannot be generalized in the overall capital markets because the capital market absorbs many other risk factors. The CAPM has been applied to the Pakistan's Stock Exchange to check the validity of CAPM for a sample of 306 individual firms and 18 industrial portfolios. Two pass regression has been applied to check the applicability of CAPM in Pakistan's stock exchange. The results show that CAPM, single factor model is not valid for the technical analysis in Pakistan's capital market. The investors need to use other type of factor models which include other economic and non economic kind of variables for valuation of securities.
“…Figure 9 in Appendix 1 displays provinces in percentage affected by terrorist attacks from 1970 to 2018. Figure 9. Province wise terrorist attacks (GTD, 2018). The previous studies regarding Pakistan have revealed that renewable and non-renewable energies determinants have a significant impact on economic growth, for instance, (Mirza et al., 2012; Muhammad and Muhammad, 2012; Shaikh et al., 2015; Shakeel et al., 2016; Wang et al., 2018; Younas et al., 2016), and some studies also highlighted terrorism effect on economic instability, such as (Bashir et al., 2013; Ismail and Amjad, 2014; Malik et al., 2018; Malik and Zaman, 2013; MengYun et al., 2018; Shahbaz, 2013). Figure 10 in Appendix 1 depicts the year-wise terrorist attacks in Pakistan. Figure 10. Terrorist attacks in Pakistan (GTD, 2018).…”
Section: Appendix 1 Terrorism In Pakistanmentioning
This paper explores the asymmetric relationship between renewable energy consumption, non-renewable energy, and terrorism on economic growth of Pakistan. We applied a novel econometric cointegration method known as a nonlinear autoregressive distributed lag modeling (NARDL). Our empirical findings indicate that positive and negative changes have a significant long-run asymmetric relationship between renewable energy, and terrorism on economic growth. We also found a negative and significant effect of non-renewable energy consumption on economic growth. To keep our environment clean and free of emissions, the study specifies policies that rely on renewable energy sources to boost economic growth. However, reduces terrorism has a positive impact on economic growth in the long-run and shows as an influential tool to combat terrorism in Pakistan. These novel results will help policy-makers and government officials to understand better the role of renewable energy and economic growth in Pakistan's development.
“…The risks are integrated into financial flows as the cost of equity and/or cost of debt. Conflict increases downside risks; therefore, projects in fragile areas are induced to higher costs of capital [68,69]. These values affect, in turn, the weighted average cost of capital (WACC) [66].…”
Roughly two billion people live in areas that regularly suffer from conflict, violence, and instability. Infrastructure development in those areas is very difficult to implement and fund. As an example, electrification systems face major challenges such as ensuring the security of the workforce or reliability of power supply. This paper presents electrification results from an explorative methodology, where the costs and risks of conflict are explicitly considered in a geo-spatial, least cost electrification model. Discount factor and risk premium adjustments are introduced per technology and location in order to examine changes in electrification outlooks in Afghanistan. Findings indicate that the cost optimal electrification mix is very sensitive to the local context; yet, certain patterns emerge. Urban populations create a strong consumer base for grid electricity, in some cases even under higher risk. For peri-urban and rural areas, electrification options are more sensitive to conflict-induced risk variation. In this paper, we identify these inflection points, quantify key decision parameters, and present policy recommendations for universal electrification of Afghanistan by 2030.
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