Socioeconomic Challenges in the Defence Sector: Interlinkages Between Defence Budgeting, Sectoral Growth, and Dividend Yield

This research analyzes determinants of corporate dividend policy in Indonesia Stock Exchange (IDX). This research hypothesizes that four financial ratios, which are dividend yield, ROA (return on assets), leverage and PBV (price-to-book value ratio) are determinants of corporate dividend policy. Samples of 25 firms, which are included in many sectors, are all fulfilling data completeness criteria. Research periods are from 2002 until 2006. A balanced panel data study technique is employed to analyze determinants of corporate dividend policy in Indonesia Stock Exchange (IDX). There are two models to estimate regression model used in this research, that is usual Ordinary Least Square (OLS) regression model and the Fixed Effects (FE) or Least Squares Dummy Variable (LSDV) regression model. The study documented that dividend yield, return on assets and leverage have positive effect to dividend payment significantly based on OLS model. Otherwise FE model found dividend yield is the only variable that statistically significant influence dividend payment. The better model to predict determinants of corporate dividend policy is FE model. FE model has higher R-squared value and Durbin-Watson d value than OLS model. In addition, FE model can explain this issue clearly and specifically. Keywords: dividend policy, dividend yield, ROA, leverage, PBV.

This study examines the impact of stock market liquidity on dividend policy of Nepalese commercial banks. Dividend payout ratio and dividend yield are selected as the dependent variables. The selected independent variables are capitalization, non-performing loan, profitability, liquidity, firm size and lagged market price. The study is based on secondary data of 16 commercial banks with 112 observations for the study period from 2015/16 to 2021/22. The data were collected from Banking and Financial Statistics published by Nepal Rastra Bank, publications and websites of Nepal Rastra Bank (NRB) and annual reports of the selected commercial banks. The correlation coefficients and regression models are estimated to test the significance and importance of stock market liquidity on dividend policy of Nepalese commercial banks. The study showed that liquidity has a positive impact on dividend payout ratio and dividend yield. It means that increase in liquidity leads to increase in dividend payout ratio and dividend yield. Furthermore, profitability has a positive impact on dividend payout ratio and dividend yield. It indicates that increase in profitability leads to increase in dividend payout ratio and dividend yield. Likewise, firm size has positive impact on dividend payout ratio and dividend yield. It means that larger the firm size, higher would be the dividend payout ratio and dividend yield. Similarly, lagged market price has a positive impact on dividend payout ratio. It indicates that increase in lagged market price leads to increase in dividend payout ratio. Further, market capitalization has a positive impact on dividend payout ratio. It means higher the market capitalization, higher would be the dividend payout ratio. Likewise, non performing loan has a negative impact on dividend payout ratio. It indicates that increase in non-performing loan leads to decrease in dividend payout ratio.

The main objective of this study is to determine the impact of dividend policy on stock price in Kuwait Firms. the study adopts the quantitative technique, gathering data from official listed Kuwaiti companies. All non-financial firms listed in Kuwait Stock Exchange from 1994 to 2003 This study will be based on a cross-sectional regression analysis of the relationship between stock price volatility and dividend policy after controlling for firm size, earning volatility, leverage and asset growth. Both dividend policy measures (dividend yield and payout ratio) have significant impact on the share price volatility.and examines the influence of dividend policy on stock price volatility and suggests the use of the following control variables in testing the significance of the relationship between dividend yield and price volatility: operating earnings; size of the firm; level of debt financing; payout ratio; and level of growth. These variables have a clear impact on stock returns but also impact on dividend yield. ‘SPSS’ statistical package to run statistical tests and answer study questions. Basic descriptive statistics (Mean, Standard Deviations) and frequency distribution were computed for each variable/question. Ordinary Least Squares (OLS) coefficient estimates are used in this study. F-tests are used to test for the relationship between stock price volatility and dividend policy. The results show that preference for dividends is larger amongst older investors, compared to younger investors. Old investors and investors without university education all have a preference for dividends because of transaction costs. On the other hand, young investors and investors with a university education have less interest in dividends based on transaction costs. The results also suggest that the watch for dividends as a safeguard measure is still “old-fashioned”, even in light of the recent accounting scandals.The results also indicate that individual investors believe that dividend payments contain a signal about the profitability of the firm

This research analyzes determinants of corporate dividend policy in Indonesia Stock Exchange (IDX). This research hypothesizes that four financial ratios, which are dividend yield, ROA (return on assets), leverage and PBV (price-to-book value ratio) are determinants of corporate dividend policy.Samples of 25 firms, which are included in many sectors, are all fulfilling data completeness criteria. Research periods are from 2002 until 2006. A balanced panel data study technique is employed to analyze determinants of corporate dividend policy in Indonesia Stock Exchange (IDX). There are two models to estimate regression model used in this research, that is usual Ordinary Least Square (OLS) regression model and the Fixed Effects (FE) or Least Squares Dummy Variable (LSDV) regression model.The study documented that dividend yield, return on assets and leverage have positive effect to dividend payment significantly based on OLS model. Otherwise FE model found dividend yield is the only variable that statistically significant influence dividend payment. The better model to predict determinants of corporate dividend policy is FE model. FE model has higher R-squared value and Durbin-Watson d value than OLS model. In addition, FE model can explain this issue clearly and specifically.Keywords: dividend policy, dividend yield, ROA, leverage, PBV.

This study aims to obtain empirical evidence on the effect of stock trading volume, earning volatility, dividend yield, and firm size on stock price volatility. This research was conducted on companies listed in index LQ 45 in Indonesia Stock Exchange 2012 until 2016. This research took the population of 45 companies with the number of samples of 21 companies selected through purposive sampling, so the number of samples observation for 5 years to 105 companies. The analysis technique in this research is multiple linear regression analysis. Based on the analysis results found that the stock trading volume does not affect the stock price volatility. Earning volatility has a negative effect on stock price volatility. This shows the higher volatility of profits owned by the company tends to reduce the interest of investors to invest or can reduce the volatility of stock prices. Dividend yield has a positive effect on stock price volatility. Which means that the higher dividend rate can affect the high investor interest to invest in the capital market, causing a stock price reaction. The firm size has a negative affects on stock price volatility. This proves the greater the size of the company indicates a stable corporate condition and able to reduce the volatility of stock prices.
 Keywords: Stock Trading Volume, Earning Volatility, Dividend Yield, Firm Size, Stock Price Volatility.

Purpose This study aims to contribute to the ongoing assessment of executive compensation by investigating the nexus between managerial entrenchment factors, adopting a multifaceted perspective encompassing both economic and non-economic dimensions. Design/methodology/approach This research employs pooled cross-sectional Ordinary Least Squares (OLS) regression and Least Squares with Dummy Variables (LSDV) models with fixed effects to examine the determinants of Chief Executive Officer (CEO) compensation. Findings This research identifies firm size, performance (via ROA and Tobin’s Q), and CEO characteristics (age, tenure, stock ownership, MBA degree) as significant determinants of executive compensation at the 0.05 level. In contrast, the prestige of educational institutions, doctoral degrees, and the MBA’s relevance to short-term performance, along with CEO tenure, do not significantly affect pay. Additionally, the study highlights the significance of industry type (manufacturing vs technology) in shaping compensation, emphasizing the role of firm metrics and CEO credentials in designing executive pay packages. Originality/value This research introduces an innovative approach to controlling unobserved heterogeneity and adjusting for the dynamic nature of CEO compensation attributes across diverse CEO characteristics. By integrating both pooled Ordinary Least Squares (OLS) and Least Squares Dummy Variable (LSDV) models, the study addresses the challenges posed by time-invariant variables and unobservable heterogeneity. Such issues have historically skewed the accuracy of traditional OLS models in identifying the comprehensive array of factors—both economic and non-economic—that influence CEO compensation. This novel methodological framework significantly advances the examination of unobservable variables that may vary not only across the firms selected for analysis but also over time periods, thereby offering a more detailed understanding of the determinants of CEO pay.

Since the last quarter of 20th century the macroeconomic impact of defense spending on the economic growth have attracted the attention of many researchers, academician and policy makers. During the cold war the US defense strategy against the Soviet Union was the first time when it was derived. After the cold war a reduction in defense spending was observed which was named as “Peace Dividend”. Most of the developing and developed countries try to make peace and promote it but still it is seen that large portion of the overall global GDP is spent on the defense sector. This study surveys defense-growth nexus by incorporating openness to trade, external debt, gross capital formation and labor force in production function. The study uses annual time series data over the period 1972-2016. For estimation purposes, the study employed ADF unit root test and P-P unit root test for testing stationarity properties, ARDL Bound test to cointegration used for testing long run relationship. The empirical evidence of the study reveals that Economic growth is positively affected by spending on defense sector, capital investments, labor force, and openness to trade in long run while external debt has a negative effect on economic growth. Apart from this, empirical evidence also suggests that in short run; there is positive imperative role of capital investment, defense spending, and openness to trade in growth process, while external debt retards the pace of economic growth. Results of the study indicates that defense spending could be used as a fiscal tool for achieving sustainable growth, government should invest high R&D in defense sector in order to produce modernize defense products which would reduce high importation cost of expensive defense products, and through selling these defense products, not only the defense sector would be self-sufficient but would also contribute to growth process by exporting the defense products.

The study employed panel Ordinary Least Squares (OLS) model and panel Vector Autoregressive (VAR) model to examine the dynamic linkages among firm growth, liquidity and firm size. Specifically the study sought to: examine the key variables explaining the growth of firms in an emerging market; examine the reaction of one variable to innovations in another variable within the system and to identify the major drivers of changes in the main variable and the magnitude of the total effect over a certain period of time. Findings, using both panel VAR and panel OLS, showed that growth of firms is financially constrained by the availability of cash flows. There is a significant relationship between cash flows and firm growth which is consistent with theoretical prediction of imperfect capital markets. The panel VAR analysis further that the presence of financial constraints is sensitive to the measure of firm growth. The study shows the existence of causal relationship among firm size, liquidity and growth. Firm size, depending on measure adopted, is affected by availability of cash flows. Variations in investment expenditure were the main drivers of changes in firm growth, firm size and liquidity. The study suggests the need to improve and have a diversified access to finance. Policy makers should aim to develop the financial sector to guarantee sustainable access to bank and stock market finance. The development of strong institutions and reduction of information asymmetry is highly recommended.

The largest military conflict in Europe since the Second World War raises natural questions about the economic justification of its causes and its impact on various sectors of the economy. First of all, the defense sector comes under analysis, in which significant changes have taken place in all countries over the last decade. A significant critical review of the literature is carried out in the paper. It revealed how the degree of financing of the defense sector, the transparency of such financing, and its size affect the development of national security and defense resilience, and how deeply these issues were considered from a methodological point of view. The research examines the issue of defense spending in Ukraine, the Russian Federation, the EU, the USA, and China. It is shown that these countries observed different trends in the financing of the army, which was caused by different strategies and approaches to the probability of a high-intensity military conflict. Based on economic and mathematical analysis, the paper demonstrates that the highest level of militarization was observed precisely in the Russian Federation, which was purposefully preparing for war. While Ukraine's military spending was roughly at the same level. The EU and the US had similar dynamics and stable amplitude in military spending. China had a stable percentage of military spending in the state budget. Given the current geopolitical situation, it is supposed to expect further increases in defense expenditures in all of the analysed countries to modernize their armies. The paper emphasizes the importance of transparency and effective budgeting in ensuring a strong and well-equipped army that can defend the country and strengthen its international position. One way to achieve transparency and openness in budgeting is through the development of an appropriate open information system based on the concept of assessing openness and transparency in budgeting and financial management in the defense and security sector of Ukraine, which should be quantitatively measured and programmatically implemented.

A study of the impact of military expenditures on economic growth and development examines the differences in the results of previous studies which led to contradictory conclusions. The authors find that these differences are due to sample variations, specificational choices, and the different time periods examined. The data indicate that there is no consistent, statistically significant connection between military spending and economic growth. Augmentation of the models suggests that military expenditures neither help nor hurt economic growth to any significant extent. 2 tables.

This article attempts to study the patterns of China’s military capacity during the cold war era. We believe that this work will not only benefit us in better understanding what factors have contributed to China’s military expenditures over the past 30 years, but also be beneficial in the prediction of China’s future military establishment. The theory directing our work is Lewis F. Richardson’s action-reaction theory which describes military capacity build-up as a process in which changes in a nation’s defense expenditures are a function of its opponent’s defense expenditures and the hostility and the economic burden of producing and maintaining arms. Guided by this action-reaction model, we test whether or not China’s military expenditures are a function of its neighboring rival countries/regions for the period of 1963 to 1990. Sixteen different formulations of Richardson’s model are employed. We use the OLS (Ordinary Least Squares) linear regression technique to test our model. Our findings suggest that possibly in the case of Taiwan and Japan does an action-reaction process occur. In addition, models that employ time lags better illustrate whether an action-reaction process is going on.

This paper investigates the effect of military spending on external debt in case of Pakistan for the period of 1973–2009. For this purpose, the autoregressive distributed lag bounds testing approach to cointegration is used to examine cointegration among the variables. The ADF, P-P, and ADF-GLS unit root tests are applied to test the integrating order of the variables. The Ordinary Least Square (OLS) and error correction method regressions are used to investigate the marginal impact of military spending on external debt in the long and short run. Our findings indicate the existence of cointegration that confirms the presence of a long-run relationship among military spending, external debt, economic growth, and investment. Further, our results reveal that a rise in military spending increases the stock of external debt; an increase in investment also increases external debt; however, there is an inverse effect of economic growth on external debt. An implication of the findings reported herein is that there is a need to formulate a comprehensive economic policy for curtailing external debt in case of Pakistan.

The purpose of this paper is to examine the determinants of firms’ dividend policy, measured by dividend yield, using a sample of firms that belong to the Euronext 100 index for a period between 2007 and 2016. We used OLS regression with the dividend yield as the dependent variable and a number of explanatory variables at the firm level. Results show that the dividend yield in this paper is not associated with firms’ profitability, although both higher growth expectations by investors and larger size of firms negatively influence firms’ dividend yield. We found some evidence that leverage is indirectly related to more dividends. An important additional finding of this paper is that the level of leverage shapes dividend yields differently in the presence of stable payouts and stable dividends per share. Furthermore, the dividend yield reflects a positive valuation of investors if the growth in dividends is linked to the growth in earnings for firms with higher growth expectations, as a policy of a stable payout appears to be viewed by investors as not jeopardizing future growth. As dividend policy is a key part of Finance research, our study contributes to the theory twofold. First, by focusing on a specific niche not developed by literature, and second by examining the indirect effects of the traditional determinants of dividend policy.

FEDERAL spending to maintain defense establishments and personnel is an important segment of the Hawaiian economy. Some idea of the magnitude and relative importance of this can be seen if we look at a breakdown of Hawaii's income from the mainland.' In I959, Hawaii earned $953 million in mainland dollars. Of this amount, $338 million, or 35 per cent, was in military expenditures.2 The importance of defense spending is also reflected in the data on employment shown in Table i. This table shows that the defense sector accounted for i8.i and 32.8 per cent of total employment in Hawaii in I939 and I955.3 This study was conducted to obtain a quantitative measure of the economic impact of changes in military spending on the Hawaiian economy. Findings as a result of this research and detailed support of them are presented below. The measure derived is the employment multiplier. This shows the change in the total employment of an economy which results from a change in the number employed in one sector of the economyin our case, changes in the defense sector. The employment multiplier was computed rather than the related and more commonly used measure, the income multiplier. The latter, which describes the change in income due to changes in expenditures in one sector of the economy, was not computed because certain data necessary to derive the income multiplier were not available in Hawaii. It will be shown that an increase in the number employed in the defense sector of IOO employees will lead to a further increase in total employment in Hawaii of 28 employees. That is, the employment multiplier for Hawaii is I.28. One can only conclude from this that the total level of employment in Hawaii is significantly affected by changes in the level of employment in the defense sector. We also find that there is little time lag between changes in military expenditures and induced changes in total employment. This is to say that the effect of an increase or decrease in defense spending on the over-all economy is mostly felt within one year from the time the initial change occurs.

Financial inclusion involves decreasing the number of unbanked population through series of activities that will enhance the participation in the financial system. The objective of this study is examining financial inclusion and its implications on growth of small and medium sized enterprises (SMEs) in Nigeria from 1992 to 2020 using data obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin. The study used the classical linear regression model using Ordinary least square (OLS) and Dynamic Ordinary Least Square (DOLS) to analyse the data. The outcome of the analysis revealed that the growth of small and medium sized enterprises (SMEs) in Nigeria is positively and significantly influenced by financial inclusion. The findings further revealed that government needs to steer up efforts in ensuring the dissemination of all banking services to reach everyone at affordability fees regardless of income group and location.