THE EFFECTS OF SOUTH AFRICA’S MACROECONOMIC FACTORS ON YOUTH ENTREPRENEURSHIP

This paper provides new empirical evidence of the bank stability in relation to the macroeconomic indicator of Indonesia. The bank stability is first calculated using Z-score, and then regressed using Autoregressive distributive lag (ARDL) model on the macroeconomic variables i.e. Gross Domestic Product (GDP) in US dollar, Interest rates (IR) in percentage and Consumer Price Index (CPI). To analyse further the long run relationship and the impact of bank stability, Cholesky standard deviation shock to the model, ARDL and Impulse Response Function (IRF) are used. These ARDL and IRF are carried out independently and repeated over data for three different models: (i) the commercial banks model, (ii) Islamic banks model, and (iii) the overall banking industry model. The empirical findings suggest long run relationship between the stability of commercial banks and macroeconomic factors. The findings also suggest the long run relationship between the stability of overall banking industry and macroeconomic factors. However, there is no evidence of long run relationship between the stability of Islamic banks and macroeconomics factors. Nevertheless, this finding is subject to the limitation of data, on the number of Islamic banks included in the test. The sample of Islamic banks was 5 banks from a total of 10 Islamic banks, due to insufficient data, as compared to the larger number of commercial banks taken into, as the sample.

In spite of the vital roles performed by the stock exchange market for the overall national development, it is still performing below expectations in Nigeria owing to several macroeconomic factors. Accordingly, the main objective of this study is to investigate the effects of selected macroeconomic variables on returns of stock prices in Nigeria. The study employed time series data obtained from the Central Bank of Nigeria statistical bulletin and World Development Indicators. Returns of stock price was measured using all-share index while the identified macroeconomic variables include GDP growth, broad money supply, exchange rate, interest rate and inflation rate. Autoregressive Distributive Lag (ARDL) estimation technique was used to establish the long run relationship among the variables and it was revealed that long run relationship exists among the variables in the estimated model. The result of the Error Correction Mechanism (ECM) within the framework of the ARDL shows that macroeconomic variables such as gross domestic product, broad money supply, exchange rate and interest rate have positive effect on returns of stock prices in Nigeria. On the other hand, the results showed that inflation rate has negative effect on stock prices in Nigeria. Predicated on the result, the study recommended that policies to increase gross domestic product, exchange rate, interest rate and money supply should be implemented because they can lead to improvement in the returns of stock prices, while inflation rate should be maintained at single digit to prevent its negative effect on the performance of the stock market in Nigeria.

This paper examines co-integrating relationship between macroeconomic factors and stock market performance in Nepal using time series data for the period 1987/88 to 2019/20. This study has used Autoregressive Distributed Lag (ARDL) bounds testing approach to identify the co-integrating relationship between macroeconomic variables and stock market performance. The stock market performance is measured by market capitalization which is considered as dependent variable and selected macroeconomic factors such as broad money supply measured by M2, economic growth measured by gross domestic product (GDP) and interest rate measured by 91-days Treasury bill rate are considered as explanatory variables. ARDL bounds test reveals that stock market performance is co-integrated with macroeconomic variables. Similarly, result of this paper shows the significant positive impact of economic growth. Further, finding reports a significant negative effect of broad money supply and interest rate on performance of Nepalese stock market in long-run. Finally, this paper concludes that disequilibrium of stock market performance in short-run is corrected by GDP, M2 and IR in the long-run. The policy implication of this paper is in formulation of capital market policy, monetary policy, financial policy and economic policy. Stock market policy makers should consider macroeconomic variables while formulating capital market policy for the better performance of stock market in Nepal.

Purpose This study aims to comprehensively examine the relationship between initial public offering (IPO) activities and macroeconomic factors in Sri Lanka. Design/methodology/approach This study uses principal component analysis (PCA) and autoregressive distributed lag (ARDL) techniques to examine the relationship between IPO activities and macroeconomic factors. Ten macroeconomic variables are transformed into principal components (factors) using PCA. Then, ARDL is applied to investigate the long- and short-term relationships between IPO activities and the transformed macroeconomic factors. Findings The empirical investigation identifies three principal factors from the ten macroeconomic variables, of which two factors have a significant long-run association with IPO activities: “return on investment (RTOI)” and “economic and market development (ECMD).” In the short run, “trade openness and banking sector development (TOBD)” and RTOI are significantly associated with IPO activities. Research limitations/implications The study was based on 30 years of observations, which passed all diagnostic tests but may be insufficient for generalizing the findings. Future studies could use high-frequency data (monthly or quarterly) to increase the number of observations and repeat the method and analysis. Also, while the symmetrical ARDL method was used in this study, an asymmetrical ARDL method may provide more insightful results and interpretations. Practical implications The study highlights the importance of considering both long- and short-term associations when analyzing the impact of macroeconomic variables on IPO activities. Originality/value This study is the first to comprehensively examine the relationship between IPO activities and macroeconomic variables using PCA and the ARDL technique. The study provides insight into the macroeconomic factors that influence IPO activities in Sri Lanka and highlights the importance of considering long- and short-term associations.

The youth unemployment rate in Malaysia is three times higher than the total population. Unemployment among youth can have negative effects on the economy and social landscape if not curbed. It is widely accepted that entrepreneurship is capable to reduce unemployment rate as well as stimulate economic growth. However, new business entry in Malaysia has stagnated in the past 10 years and remained lower than the OECD average. Access to financing is one of the most prominent challenges facing by SMEs. The situation becomes worse for youth entrepreneurs as they are considered high risk profile and unable to secure financing especially from financial institutions. A survey by Khazanah Research Institute highlighted that only 6% of youth entrepreneurs in Malaysia are getting financing from financial institutions even though financial institutions are considered as predominant source of funds to SMEs. This study aims to understand the challenges facing youth entrepreneurs in Malaysia in accessing financing from financial institutions. In line with the present aims, an attempt is made to identify sources of financing used by youth entrepreneurs, challenges encountered in accessing financing and reasons for not applying for financing. The findings are based on a sample of 260 youth entrepreneurs in Malaysia through questionnaires. The results revealed that youth entrepreneurs use informal financing sources like personal savings. The most pressing problem among youth entrepreneurs who had experiences in accessing financing assistance from financial institutions is lack of track records while interest rate is the main reason for youth entrepreneurs who never had experience in accessing financing assistance from financial institutions.

The purpose of this study is to examine the impact of monthly time series data of macroeconomic variables from January 2005 to October 2021 on Iraqi’s stock market performance. The Iraqi Cen- tral Bank (ICB) was used to gather the information. This study used four macroeconomic factors as independent variables (money supply, interest rate, exchange rate and inflation rate), and market capitalization as a proxy for stock market performance as a dependent variable. All of the variables were stationary at a (level) according to the Augmented Dickey-Fuller (ADF) test. Money supply has a significant positive effect by nearly 0.50; interest rates have a significant negative effect 0.53; exchange rate has a significant positive effect by0.62; while the inflation rate has a negative but sta- tistically nonsignificant on stock market performance by 0.002, according to the Autoregressive Dis- tributed Lag (ARDL) regression results. Analysis of long-term macroeconomic variables and stock market performance shows that there is a long-term correlation. The true determinants of the Iraqi stock market’s success are money supply, exchange rate and interest rate, as all have a major impact.

The stock market of a country can be used to explain the behavior of its economy. This study examines the impact of macroeconomic stability variables on stock price volatility in the long term, with reference to the Colombo Stock Exchange (CSE). Previous empirical evidence has shown that the CSE exhibits stock price volatility characteristics similar to those of developed equity markets, even though the CSE has been categorized as a developing equity market. Therefore, it is important to examine the factors influencing this abnormal stock price volatility in the CSE. There is a lack of research examining the long-term impact of macroeconomic stability factors on stock price volatility in the Sri Lankan context. This study employed the Autoregressive Distributed Lag (ARDL) model, as many similar studies have used the ARDL model to identify the impact of macroeconomic stability factors on CSE stock price volatility from a long-term perspective. Five macroeconomic variables-GDP, inflation, money supply, interest rate, and exchange rate were analyzed over a 10-year period from 2010 to 2019. Findings revealed that CSE price volatility does not show a long-term impact from macroeconomic stability variables. However, it shows a considerably less short-term impact on interest rates and exchange rates. Further, these findings suggest that stock price volatility in the CSE may be driven more by market specific factors. Furthermore, due to the absence of strong macroeconomic influence, it can be suggested that there is information asymmetry, investor sentiment, and irrational market behavior in the CSE which affects stock price volatility.

Stock prices are usually analysed and explained in terms of underlying financial indicators, such as earnings per share or dividend payout ratios. Nevertheless, fluctuations in the conditions of the economy can result in changes in demand, which can impact on profits and dividends. Since macroeconomic variables affect financial indicators it follows that macroeconomic variables affect stock prices. If markets are rational and efficient, then stock prices will reflect all known information regarding macroeconomic factors that are perceived to affect stock prices. It follows that stock prices should not change significantly unless there is a surprise or news about the state of the economy (as reflected in unexpected changes in macroeconomic variables). Intuitively, this implies that models of stock price determination based on news ought to be superior to conventional models that use the levels or changes in variables. The utilisation of news in research on stock prices is very limited. Two approaches have been traditionally used to represent the news in the absence of surveys of expectations: either by assuming announcements are news such as those in event studies or by using an econometric time series approach to extract the news components from total changes in the variables, as is the case with the news model. The majority of studies involving news models have been in the foreign exchange market using news estimated econometrically—very little has been done in estimating and testing a macro news model of stock prices and certainly nothing has been done on stock prices in developed economies such as Australia. Thus this research is motivated by the significant gaps in the literature with respect to the development, estimation and testing of a news model of stock prices. Most of the studies that investigate the relations between macro variables and stock prices have been carried out using conventional approaches by estimating models that use the variables in their levels. Some of the multivariable models of stock prices arise as a result of anomalies found in implementing the capital asset pricing model. Other multivariable approaches such as the arbitrage pricing theory (APT), due to Ross (1976), suggest that macro variables are useful, but APT is silent on the appropriate macroeconomic explanatory variables. Furthermore, there have been limited attempts to examine macroeconomic variables collectively, but not with the aim of developing a macro model of stock prices. This thesis presents the results of research that uses comprehensive econometric procedures to investigate which macroeconomic variables have significant effects on Australian stock prices and whether news about such variables can enhance the performance of conventional stock price determination models. Seven macroeconomic variables are examined: interest rates, inflation, the money supply, economic activity, commodity prices, exchange rates and a foreign stock market index to account for spill-over effects. This provides a valuable contribution to the understanding of the individual effects of macroeconomic variables on stock prices and adds to the limited literature regarding the usefulness of news in models of stock price determination. The results from this research demonstrate that although news is a theoretically sound and intuitively plausible basis for improving macro models of stock prices, in practice there is no ex-ante exploitation possible by estimating news utilising econometric methods. Simply put, news cannot be predicted—this is established by using three comprehensive methods of estimating news, which is the residual of a model fitted to the time series data of a particular variable.

In spite of the vital role played by the stock exchange market in the overall national development, it is still performing below expectations in Nigeria owing to several macroeconomic factors. The main objective of this study is to investigate the effects of selected macroeconomic variables on stock market performance in Nigeria. The study employed time-series data obtained from the Central Bank of Nigeria's statistical bulletin and World Development Indicators. Stock market performance was measured using the all-shares index while the identified macroeconomic variables included GDP growth, broad money supply, exchange rate, savings interest rate, and inflation rate. An Autoregressive Distributive Lag (ARDL) estimation technique was used to establish the long run relationship among the variables, and it was revealed that a long run relationship existed among the variables in the estimated model. The result shows that macroeconomic variables such as gross domestic product, broad money supply, exchange rate, and savings interest rate have a positive effect on stock market performance in Nigeria. On the other hand, the results showed that the inflation rate has a negative effect on stock market performance in Nigeria. Predicated on the result, the study recommended that policies to increase gross domestic product, exchange rate, interest rate, and money supply should be implemented because they can lead to an improvement in the performance of the stock market, while the inflation rate should be maintained at a single digit to prevent its negative effect on the performance of the stock market in Nigeria.

The study investigates the short and long-run relationship between the Philippine Stock Exchange Index and macroeconomic variables interest rate, foreign direct investment (FDI), and exchange rate. Specifically, the paper analyzed annual secondary data from the inception of PSEi in 1985 to 2019. This study's theoretical and empirical research finds diverse perspectives on how each macroeconomic variable factors into the stock market price levels. The Philippine stock market has also grown remarkably during the past few decades. However, there is little to no comparable study in Philippine literature. So, by employing the ARDL bounds testing approach, the research adds to the body of literature by examining the macroeconomic factors influencing the growth of the Philippine stock market. The study adopted the Autoregressive Distributed Lag (ARDL) model to estimate the causality function, F-Bounds Test to establish long-run causal significance, and Error Correction Term (ECT) to determine how long until the adjustment of short-run errors to re-equilibrate to the long-run equilibrium. The results show that FDI has a positive cointegration in both the short and long run, the exchange rate has a positive cointegration both in the short and long run, and the lag of interest rate is positively significant in the short run and negatively significant in the long run.

Examining the effects of GDP, FDI, inflation, interest rates and currency rates on Pakistan’s economic growth is the primary goal of this research. Pakistan’s capacity to lower poverty and raise living standards has been hampered by its erratic economic growth in recent decades. The macroeconomic factors (GDP, FDI, inflation, interest rate and exchange rate) and their effects on Pakistan’s economic growth between 1970 and 2022 are examined in this paper. The study investigated the short and long term impacts of macroeconomic factors on Pakistan’s economic growth using an Auto Regressive Distributed Lag (ARDL) model. In this model, the Augmented Dickey-Fuller (ADF) unit root test is utilized for Stationarity. The ARDL bond test validated the variables long-term association. The findings indicate that, over the long run, FDI and the exchange rate have a positive and large impact on economic growth, while inflation and the real interest rate have a negative and negligible impact. Additionally, this study shows a strong long-term correlation between the factors. In order to achieve sustainable economic growth, the study’s findings suggest that policymakers should prioritize keeping inflation low and promoting investment through advantageous interest rate.

PurposeThis paper studies the dynamic effects of selected macroeconomic factors on the performance of the housing market in Kenya using Autoregressive Distributed Lag (ARDL) Models. This study aims to explain the dynamic effects of the macroeconomic factors on the three indicators of the housing market performance: housing prices growth, sales index and rent index.Design/methodology/approachThis study used ARDL Models on time series data from 1975 to 2020 of the selected macroeconomic factors sourced from Kenya National Bureau of Statistics, Central Bank of Kenya and Hass Consult Limited.FindingsThe results indicate that household income, gross domestic product (GDP), inflation rates and exchange rates have both short-run and long-run effects on housing prices while interest rates, diaspora remittance, construction output and urban population have no significant effects on housing prices both in the short and long run. However, only household income, interest rates, private capital inflows and exchange rates have a significant effect on housing sales both in the short and long run. Furthermore, household income, GDP, interest rates and exchange rates significantly affect housing rental growth in the short and long run. The findings are key for policymaking, especially at the appraisal stages of real estate investments by the developers.Practical implicationsThe authors recommend the use of both the traditional hedonic models in conjunction with the dynamic models during real estate project appraisals as this would ensure that developers only invest in the right projects in the right economic situations.Originality/valueThe imbalance between housing demand and supply has prompted an investigation into the role of macroeconomic variables on the housing market in Kenya. Although the effects of the variables have been documented, there is a need to document the short-run and long-term effects of the factors to precisely understand the behavior of the housing market as a way of shielding developers from economic losses.

Coffee as the second largest agricultural commodity export has contributed to the economies of various countries, including Indonesia. In addition to looking at the role of coffee commodity exports, an analysis of macroeconomic factors' impact on Indonesia's unemployment rate is also analyzed. Because it is known that the unemployment rate is not only caused by one sector but some things influence it, including macroeconomic factors. This study analyzes the role of coffee commodity exports and macroeconomic factors, including GDP, inflation, and interest rates, on Indonesia's unemployment rate. The data used in this study is interpolated secondary data for the period 2000 to 2021. The estimation method used in this study is Robust Least Square (ROBUSTLS) which will then be estimated again using the Autoregressive Distributed Lag (ARDL) method as a robustness test. The estimation results using the ROBUSTLS method prove that coffee commodity exports and macroeconomic factors significantly affect Indonesia's unemployment rate in aggregate. This form of influence is negative for coffee commodity exports (ExpCof), gross domestic product (GDP), and interest rate (IR). While inflation (Inf) has a positive impact on the unemployment rate (Ump). These findings are reinforced by the estimation results using the ARDL method with the result that ExpCof, GDP, and Inf have a significant relationship to Ump, while Inf is not as significant as the findings from the estimation results using the ROBUSTLS method.

This study contributes to the existing literature by combining the multiple methods to clarify the influence of the macroeconomic factors on the real estate investment trust (REIT) index in three Asian countries. The authors, first, use an autoregressive distributed lag (ARDL) bounds test to find that a long-run equilibrium exists between the REIT index and the interest rate, inflation rate, and stock index for China and Singapore. The authors, then, analyze the long- and short-run elasticity of the macroeconomic variables on the REIT index. Finally, using the Granger non-causality test, the authors demonstrate that a unidirectional relationship, in which inflation-rate shifts cause REIT index changes, exists in Japan and Singapore and that a wealth effect, in which stock index movements cause REIT index changes, exists in Singapore. The findings have economic implications for investors seeking to gain from REITs using macroeconomic factors. Keywords: REITs, macroeconomic factor, ARDL bounds test, ARDL long-run model, error-correction model, Granger non-causality test. JEL Classification: C22, G11, L85, D53, C58, F14

Per capita, income is a crucial factor in determining economic growth and productivity. However, statistics from 2015 to 2022 indicated that Nigeria has a low and declining per capita income even in the class of developing countries in Sub- Saharan Africa such as South Africa and a developing country of a similar population such as Brazil. Arguably, effective management of macroeconomic variables such as broad money supply, inflation rate, unemployment rate, and interest rate can lead to higher per capita income. This study investigated the influence of selected macroeconomic factors on the per capita income in Nigeria from 1990 to 2022. The study utilised time series data and Dynamic Ordinary Least Squares technique to analyse the influence of selected macroeconomic variables on per capita income in Nigeria. The results indicated among others that broad money supply in Nigeria has a substantial and positive effect on per capita income. This makes it a crucial variable among the macroeconomic factors that contribute to the growth of per capita income in Nigeria. Conversely, the unemployment rate, inflation rate, and interest rate impede per capita income. This is due to the adverse effect that the rise in these three macroeconomic variables has on per capita income in the country. The paper therefore, suggested that the Federal Government, through the Central Bank of Nigeria, should regulate the quantity of broad money supply to ensure its favourable influence on the enhancement of human capital in Nigeria. This could be done by allocating more resources towards education and healthcare services, thereby fostering human capital development. Also, lowering unemployment by implementing policies that stimulate aggregate demand and promote a conducive environment for private sector investors will enhance productivity and raise per capita income. Thus, the management of these significant macroeconomic variables is key to the growth of per capita income in Nigeria, hence, the paper also recommended that the Central Bank of Nigeria in collaboration with the Federal Ministry of Labour and Productivity, and the Federal Ministry of Finance should effectively manage these selected macroeconomic variables to enhance the growth of per capita income in Nigeria.