Feasible Generalized Least Squares Research Articles

The importance of digitalization in powering environmental innovation performance of European countries

We empirically examine the influences of the digital business and digital public services on environmental innovation (EI) performance in the European region during the 2011-2019 period. We use four diverse measures to capture the performance of EIs of 24 European countries, including the percentage of enterprises implementing EI investment (% of surveyed firms); the percentage of enterprises implementing EI activities (e.g., implementation of resource efficiency actions, sustainable products, or ISO 14001 certificates) measured, a number of enterprises having new ISO 14001 registration and a number of EI related patents. There are four measures of e-Commerce, including online selling, e-Commerce sales, e-Commerce web sales, e-Commerce turnover, and two measures of e-Business, including CRM usage and cloud usage. Digital public service performance is captured by three indicators, including user centricity, business mobility and key enabler. Our study provides the theoretical framework to explain the link between digitalization and environmental performance. The nexus between digitalization and environmental innovations is empirically analyzed by using the panel corrected standard error (PCSE) model and the feasible generalized least squares (FGLS) model for the panel data featuring the cross-sectional dependency. Our estimation results highlight the importance of digital businesses, including e-commerce sales, e-commerce turnover, e-business (including CRP and cloud usage), in improving the EI investments, EI activities, EI related patents, and the number of enterprises with new ISO 14001 registration during the 2011-2019 period in the European region. Digital public services are less crucial in promoting EI performance as compared to digital businesses as these variables are not statistically significant in some cases. We also provide empirical evidence on the mechanism to explain the improvements in EI. Digitalization appears to have favorable impacts on EI investments of firms and government's financial support, and the public's awareness regarding the importance of EI.

International Remittances and International Tourism Development in South Asia: The Moderating Role of Political Stability

The increasing dependence of South Asian countries on international remittances (IRM) and international tourism development (ITR) in the presence of political uncertainties has attracted scholars' attention. Although the largest receiver of IRM, South Asia fails to channel these funds to the tourism industry, which continues to operate below its potential. This study estimates the impact of IRM, political stability (PS), and their interaction with foreign direct investment (FDI) and relative price (RP) on ITR in South Asia. We used a balanced panel dataset of six South Asian countries from 1996 to 2020. We applied the pooled ordinary least squares (POLS), fixed effects (FE), feasible generalized least squares (FGLS), and Prais-Winsten regression with panel-corrected standard errors (PCSE), to estimate the results. The study discovered quite interesting and surprising results between IRM and ITR. The results suggest a statistically significant negative impact of IRM on ITR in South Asia, implying that the recipients of IRM tend to spend most of it on their basic level consumption needs and do not have incentives to save and invest. Further, the results suggest that PS positively moderates the relationship between IRM and ITR, suggesting that IRM will be channelized to the tourism sector if domestic investors expect low political risks in the region. In addition, the results indicate that PS and FDI have a statistically significant positive effect on ITR in South Asia. Moreover, RP has a negative and significant impact on ITR, implying that international tourists prefer cheaper destinations. This study provides crucial implications for South Asian economies. First, effective public policies are specifically designed for channelling IRM and FDI, focusing on enhancing the tourism industry's infrastructure. Second, PS is necessary for ITR and domestic investors to invest IRM in the tourism sector. Thus, policymakers must consider political factors while designing tourism policies and strategies. Third, the findings highlight the significance of price competitiveness for developing the tourism industry. Hence, we argue that policymakers should implement effective economic policies to stabilize regional prices to attract international tourists.

Effects of Corporate Governance Mechanisms on Climate Change Disclosures: Evidence from Listed Banks in an Emerging Economy

This study examines the effects of corporate governance mechanisms on climate change disclosure in Bangladeshi-listed banks. The corporate governance mechanisms used in the study were board size, board meetings, board independence, audit committee size, audit committee independence and audit committee meetings. A climate change disclosure index (CCDI) was developed to assess the sample banks’ climate change disclosures. From 2013 to 2018, data on climate change disclosures and corporate governance mechanisms were collected from the annual reports of all 30 listed banks. Employing a feasible GLS (FGLS) model for panel data, the findings demonstrated that increasing audit committee meetings, independent directors on the board and audit committee size positively and significantly increased climate change disclosures of listed banks in Bangladesh. Unlike prior climate change research on listed banks in Bangladesh, this study has included the audit committee attributes and the sponsor-directors’ ownership as determinants of climate change disclosures. This research offered a novel viewpoint on the significant positive impact of sponsor-directors’ ownership on climate change information disclosure. These findings have practical implications for governments, regulatory authorities, investors, green groups and other organisations working on climate change issues in the country.

The nexus between climate change risk and financial policy uncertainty

AbstractWe investigate the role of financial policy uncertainty in climate change risk. We use the financial policies uncertainty index to estimate its composite effectiveness on climate change. We test the financial development role from two perspectives covering the credit channel and market liquidation facilities for climate change. We also test the role of financial policy uncertainty through moderating channels of renewable energy production and financial development. Our sample comprises 42 developing economies from 1991 to 2020. We apply the fixed‐effects estimation, feasible generalized least squares (FGLS) method and bootstrap quantile to analyze the results. The empirical results reveal that financial policy uncertainty plays a significant role in climate change risk. We conclude that climate change risk management policies and financial policy uncertainties should be considered as key indicators of financial development.

Level of Corporate Social Responsibility Disclosure and Financial Performance: A Case Study in Ho Chi Minh City, Vietnam

Research aims: This study examines the influence of firm size, firm age, current ratio, and type of audit company on the corporate social responsibility disclosure level and its impact on the financial performance of listed enterprises in Vietnam.Design/Methodology/Approach: Financial data were collected from the annual reports of 109 enterprises listed on the Ho Chi Minh City Stock Exchange, Vietnam, from 2016 to 2020. This research employed the Random Effects Model (REM), Fixed Effects Model (FEM), and Feasible Generalized Least Squares (FGLS) to deal with the drawbacks of the regression models, as mentioned.Research findings: The findings support the positive influence of firm size, firm age, and the type of auditing firm on the level of CSR information disclosure of listed manufacturing enterprises. Also, the extent of CSR disclosure positively affected financial performance, confirming the positive relationship between CSR disclosure level and financial performance.Theoretical contribution/Originality: This study contributes to governance theory by expanding and combining stakeholder and legitimacy theories with criteria for measuring the level of CSR disclosure in the Vietnamese context. Therefore, the study results are a valuable reference for theorists who tirelessly pursue the CSR topic.Practitioner/Policy implication: This study proposes recommendations for practitioners who should focus on enhancing the level of CSR disclosure to generate more benefits and result in better financial performance. Also, policy implications should be raising the senior managers’ awareness of the level of CSR disclosure, firm size, firm age, and type of audit and establishing a stable legal framework for the level of CSR disclosure in line with international standards and practices.Research limitation/Implication: The sample data were only collected from manufacturing companies listed on Ho Chi Minh Stock Exchange, and the analyzed content and measurement of the level of CSR disclosure primely relied on the enterprises’ annual reports.

Encirclement of Natural Resources, Green Investment, and Economic Complexity for Mitigation of Ecological Footprints in BRI Countries

Environmental deterioration has been increasing constantly for many years and has become the major reason for climatic changes. Consequently, policy makers and researchers are enquiring into the factors affecting environmental quality. The earlier literature describes little about the impact of economic complexity, natural resources, and green investment on ecological footprint for countries participating in the Belt and Road Initiative (BRI), so this research is an effort to close this gap for the 45 BRI countries covering the time period 1995–2020. We applied a number of methods to address the issue of cross-sectional dependence, then cointegration is determined through the Lagrange multiplier bootstrap method. The Driscoll–Kraay standard error method is employed to find the long-run estimates while the robustness of the estimated findings is checked through panel-corrected standard errors (PCSE) and feasible generalized least squares (FGLS). The estimated outcomes suggest a significant negative effect of green investment on ecological footprint while natural resources, economic complexity, economic growth, and globalization have significant and positive effects on ecological footprint. These conclusions provide profound insight into natural resources, green investments, and economic complexity for sustainable development of the environment in BRI participating economies and provide a meaningful reference for ecological safety for other economies in the world. This study also highlights some necessary insights for policy makers and practitioners engaged in obtaining the target of sustainable development policies.

Rethinking social change: Does the permanent and transitory effects of electricity and solid fuel use predict health outcome in Africa?

One of the greatest global challenges of this 21st century is electricity deprivation, which involves extending access to electricity to hundreds of millions of people, while simultaneously trying to improve the quality of life and maintain their good health. Electricity deprivation combined with poor health systems and social circumstances can be a problem as it tends to expose the population to greater health risks. While the opponents of energy use almost never deny that electricity use is necessary for health, instead, they failed to admit that a lack of readily available electricity could mark the difference between life and death. This is because reliable electricity supply is required for basic socioeconomic needs such as home cooking and storage, water supply, lighting and reduction of indoor air pollution that may arise from solid fuel usage. This study examines the permanent and transitory effects of electricity and solid fuel use on health in Africa. The empirical strategy combines the van praag transformation and advanced econometrics based on Mundlak methodology. By using the Mundlak statistical procedure, the study breaks down the permanent and transitory effects of energy use (electricity and solid fuel use) on health. The study also corrects for potential endogeneity problem using the Hausman -Taylor statistical procedure. It further strengthened the analysis by correcting for cross panel correlation using the Feasible GLS methodology. The findings revealed that having access to electricity reduces health risks associated with burning solid fuels in Africa.

Green Total Factor Productivity and Its Saving Effect on the Green Factor in China's Strategic Minerals Industry from 1998-2017.

Improving green total factor productivity (GTFP) is a fundamental solution to help the strategic mineral industry to achieve green and sustainable development. This study incorporates the dual negative externalities of resource depletion and environmental pollution into the GTFP measurement to capture the 'green' elements. By employing a truncated third-order (TTO) translog cost function and the feasible generalized least squares (FGLS) approach, we evaluate the GTFP growth performance and its components in China's strategic minerals industry from 1998 to 2017. Moreover, we explore the bias of technological progress toward the resource and environmental factors to grasp the green factor saving effects. The results show that: (1) during the sample period, the average GTFP growth rate of China's strategic minerals industry was 0.46%, but there were variances between mineral sectors. Nevertheless, after 2012, the GTFP of all mineral sectors experienced different degrees of decrease. (2) The main driver of adjustments in GTFP growth shifted from technological progress to changes in scale efficiency, with technological progress contributing less to GTFP growth. This is particularly evident in the metal and energy minerals sectors. (3) Green technological progress is biased toward saving environmental factor input but enhancing resource extraction. Therefore, the current development of China's strategic minerals industry falls into a non-sustainable mode of being environmentally friendly but not resource-saving.

Can rural livelihood programs enhance capabilities and reduce vulnerability to poverty? Evidence from a tribal region of eastern India

Quantitative evidence on the impact of social protection such as livelihood programs (LPs) on reducing vulnerability to poverty (VtP) is scant. Therefore, this paper aims to estimate VtP and the ability of LPs to reduce it. The analysis is based on the primary data collected in 2018–19 from 479 households in a tribal region of eastern India. First, household VtP was estimated using the feasible generalized least squares (FGLS) method. Households were categorized into four groups based on their current and predicted future poverty status: chronic poor, transient poor, escaped poverty, and non-poor. Second, factors influencing this movement of households from current to future poverty states were determined using multinomial logistic regression. Third, the impact of the LP on VtP was investigated using the endogenous switching regression (ESR) approach. The FGLS estimates show that 34.7% of households are vulnerable to future poverty, which exceeds the actual poverty rate of 28.6%. The major factors responsible for exacerbating chronic poverty and causing transient poverty are chronic illness, climate shocks, and the sale of assets. The ESR results indicate that a household’s VtP is reduced by 3% for those that participate in LPs. Although the LP evaluated in this study has an average positive impact in reducing vulnerability, there is wide heterogeneity among the beneficiaries as the geographically disadvantaged communities lag behind the others. Therefore, the study suggests strengthening such LPs with a particular focus on disadvantaged and vulnerable communities.

Examining the link between integrated management systems and firm performance: do the integration strategies matter?

PurposeThis study attempts to examine the performance differences between firms with and without integrated management systems (IMSs), and the impact of three integration strategies (i.e. implementing quality management system (QMS) first, then environmental management system (EMS) (QMS + EMS); implementing EMS first, then QMS (EMS + QMS); implementing QMS and EMS simultaneously (QMS − EMS)) on firm performance to reveal the IMS–performance relationship and provide empirical evidence.Design/methodology/approachTwo panel datasets were collected during 2009–2019. This study used the Mann–Whitney non-parametric test and a sample of 33,155 observations from 4,316 Chinese listed firms to compare the performance differences between the IMS and non-IMS groups through performance indicators. This study also examined the effects of three integration strategies on firm performance using a cross-sectional time-series feasible generalized least squares (FGLS) regression model and a sample of 11,289 observations from 2,037 firms.FindingsThe results show that significant performance differences exist between IMS and non-IMS firms; however, the performance of firms with an IMS is not always better than that of firms without IMS. Furthermore, the simultaneous integration strategy has a positive impact, whereas sequential integration strategies (QMS + EMS and EMS + QMS) negatively affect firm performance. Compared with the EMS + QMS strategies, the QMS + EMS strategies have a more prominent effect on firm performance. Simultaneous strategies are more effective than sequential strategies.Practical implicationsFirms should fully consider the potential benefits and costs associated with the difficulties of IMS implementation and the implementation order of different management systems and the potential effects of the management systems in different conditions. Firms also should try to develop internal capabilities through implementing different integration strategies.Originality/valueBy comparing performance differences between firms with and without IMS, this study enriches the understanding of the performance benefits of IMS implementation in the Chinese context. By examining the impact of integration strategies that follow different sequences on firm performance, this study promotes an in-depth understanding of the integration strategies and their performance implications beyond simple descriptions and also provides new insights into operations strategy models.

Impact of global value chain embedding on industrial environmental performance: An empirical study based on the countries along the “Belt and Road”

Global value chain (GVC) embedding is a “Double-edged sword”. While the countries along the “Belt and Road” benefit from the dividends brought by GVC embedding, the environmental pollution caused by industrial production becomes increasingly severe due to the lack of core technology and weak research and development (R&D) capability. Environmental performance can comprehensively reflect the cleaner production level of the industry considering the interaction of various input factors. With the deepening of GVC embedding in countries along the “Belt and Road”, it is essential to improve industrial environmental performance from the perspective of GVC embedding. Based on the industrial sector data from 15 countries along the “Belt and Road” during the period from 2007 to 2020, the impacts of GVC embedding on industrial environmental performance are empirically examined in this study using the feasible generalized least squares (FGLS) and panel threshold model. The findings of this study could shed light on industrial pollution emission reduction measures through GVC embedding for the “Belt and Road” countries. Specifically, the results manifest that: 1) The increase of GVC forward embedding promotes industrial environmental performance, while the increase of GVC backward embedding has an inhibitory effect. 2) The impact of GVC position on industrial environmental performance shows a evident threshold effect with respect to the intensity of environmental regulation. In other words, when a country’s environmental regulation intensity rises continuously and crosses the threshold value, the upgrade of the GVC position will promote industrial environmental performance. 3) The effect of GVC embedding on industrial environmental performance is heterogeneous. From the perspective of cross-border times of added value, GVC backward simple embedding inhibits industrial environmental performance, while GVC backward complex embedding is promotive. From the perspective of time heterogeneity, the implementation of the “Belt and Road” Initiative has changed the impact of GVC backward embedding on environmental performance from inhibition to promotion. In the end, this paper provides policy implications for countries along the “Belt and Road” to establish a green and low-carbon circular development system and achieve the goal of industrial clean production.

The extent of Vulnerability to Food Insecurity and Household Coping Strategies: Case of Yam Farmers in Ekiti State, Nigeria

The study analysed the extent of vulnerability to food insecurity and household coping mechanisms among yam farmers in Ekiti State, Nigeria. Cross-sectional data were used for this study with the aid of a well-designed questionnaire. A multistage sampling procedure was used to select 360 respondents. Multinomial logit (MNL) model and Feasible Generalized Least Square (FGLS) method were employed for the data analysis. The results of the FGLS model showed that 49.3% of the households were food secure and experienced low vulnerability to food insecurity. However, 30.23% of them were food insecure and highly vulnerable; they are considered as chronically food-insecure households. Also, the study revealed that 11.01% of the food secure households may be food insecure in the future if necessary attention and intervention are not given by both households and the government. Again, 9.4% of the households that were experiencing food shortage, as at the time of the study, may recover in the future. The findings of MNL revealed that the age of the household head, main occupation, household size, land size, net household income, and membership in a cooperative society were the main significant factors in yam farming households' decision to use coping strategies. As a result, it is recommended that leveraging the potential role of coping mechanisms already used by households during food shortages, and building a comprehensive human capital development, such as education, will be vital policy options to reduce food insecurity.

Complementarity or Substitution: A Study of the Impacts of Internet Finance and Rural Financial Development on Agricultural Economic Growth

Based on the Chinese county-level panel data from 2014–2018, in the study reported in this paper, we empirically tested the “complementarity and substitution” effects of internet finance and rural finance on rural economic development using the feasible generalized least squares (FGLS) estimation method. The research data were obtained from the China County Statistical Yearbook. Similarly, the data of agricultural credit societies were obtained from the unique database of the agricultural credit societies of Shaanxi Rural Finance Research Center, while the internet finance development index was obtained from the Digital Finance Research Center of Peking University. In this research, we found that rural finance and internet finance contribute to rural economic growth. In the context of rural economic growth, internet finance and rural finance development show a substitution effect. The scale and efficiency of rural finance contribute to rural economic growth, while the structure of rural finance has the opposite effect. The development of internet finance reduces the marginal contribution of the rural financial scale and efficiency to rural economic growth. It weakens the negative effect of the rustic financial structure on rural economic growth. Furthermore, the development of internet finance contributes to the rural economic growth of counties of high economic levels but hinders the development of counties of low and medium economic levels. In counties with a high economic status, the development of internet finance and rural finance have a complementary effect on rural economic growth, while in counties of low and medium economic levels, we can observe a substitution effect. These assessments provide guidance, a source for policy recommendations and a reference for researchers and policy makers seeking to optimize the structure and break the monopoly pattern of agricultural credit cooperation in the rural financial market and to strengthen innovation and significantly improve the operational level of rural financial institutions. Moreover, the development of internet financial business and technology is necessary to overcome the demerits of traditional financial institutions.

Corporate Social Responsibility Disclosure and Investment Decisions: Evidence from Saudi Indexed Companies

This study investigated the investment decisions of Saudi corporations in the corporate social responsibility (CSR) context and examined the moderated role of corporate governance quality. The panel dataset consisted of 82 firms and 328 Saudi firm-year observations listed on the Saudi Stock Exchange over the period of 2018–2021, and feasible generalized least squares (FGLS) regression was used for model estimation. The empirical findings indicated that companies with higher levels of CSR reporting invested more effectively than companies with lower CSR reporting levels. The empirical analysis suggested two main findings: (i) corporate social responsibility (CSR) reporting has a significant effect on investment decisions and (ii) this relationship depends on corporate governance practices. This research presents new evidence that improves the discussion around CSR involvement and corporate investment decision making in the emerging market of Saudi Arabia. Furthermore, it presents practical and managerial implications for policymakers and standard setters who are interested in ameliorating sustainable development in Saudi Arabia under the Kingdom Vision of 2030. Additionally, this work provides suggestions for firm management regarding the importance of CSR commitment and corporate governance mechanisms in enhancing corporate investment decisions. Finally, the outcomes of this research are beneficial for investors, as they represent the factors to be considered before making investment decisions.

The Impact of Market Integration on Renewable Energy Technology Innovation: Evidence from China

China is vigorously building a unified domestic market, with priority given to regional market integration while maintaining a national unified market. Limited research has been conducted on whether market integration affects renewable energy technology innovation (RETI). This paper empirically studies this topic based on panel data of 30 Chinese provinces from 2004 to 2020 using FMOLS (Fully Modified Ordinary Least Squares), DOLS (Dynamic Least Squares method), and FGLS (Feasible Generalized Least Squares). Research results have been verified by robustness tests. The main conclusions are as follows: (1) Market integration has an important positive impact on RETI, namely, boosting it. This conclusion remains robust when different indicators of innovation and market segmentation are included. (2) The regional impacts of market integration on RETI are heterogeneous, being the greatest in east China, followed by west China and central China. (3) Market integration affects RETI through energy structure and technological innovation. It can optimize energy structure, improve technological innovation, and thus enhance RETI. Based on the above conclusions, in order to improve RETI in China and expand its contribution to carbon neutrality and carbon peaking, China needs to strengthen the construction of a national unified market and implement differentiated market integration policies in east, central, and west China. Furthermore, it is necessary to give full play to the role of energy structure and technological innovation in market integration by optimizing energy structure and improving technological innovation.

Dynamic association between socio-economic, environmental and logistic operations: Evidence from SSA BRI host countries

This study examines the connection among green logistic operations, countries-level economic, environmental, and social indicators in Sub-Saharan Africa (SSA) Belt and Road Countries. Using the system generalized method of moments (S-GMM) estimator, this study analyses annual data from 2008 to 2018 and offers three key findings. First, economic indicators China’s foreign direct investment (FDI), trade openness and economic output) are positively associated with green logistic operations. Second, logistics are positively correlated with renewable energy while inversely correlated with carbon emissions. Third, social indicators are also directly associated with green logistic operations measured through health expenditure and institutional quality. Lastly, information communication technology also spurs green logistic operations. Manifestly, Chinese outbound FDI in SSA substantially improved the quality of their logistics in terms of infrastructure, cost, time, customs services, tracking, and the consistency of international shipments. These findings show that green logistics provide adequate infrastructure, and supply chain partners share information more frequently, increasing trade volume, growth potential, and environmental sustainability. Similar results are also endorsed using a feasible generalized least square (FGLS) estimator and suggest that SSA should take effective measures to improve their logistics operation.

Investigating the role of research development and renewable energy on human development: An insight from the top ten human development index countries

The human development index (HDI) is an inclusive indicator for measuring the standard of living with greater emphasis on development than the gross domestic product. The purpose of this study is to investigate the impact of economic growth, renewable energy consumption, research and development expenditure, and total natural resource rent on the HDI in the top ten human development countries. For this reason, we used datasets for 1996–2007 and employed a series of advanced econometric methods [the Driscoll-Kraay, feasible generalized least square (FGLS), and generalized method of moments (GMM)] to mitigate the existing cross-sectional problem. This study demonstrates that economic growth, renewable energy consumption, research and development expenditure, and total natural resources rent tested positive on the HDI. While the Dumitrescu-Hurlin panel causality tests showed a bidirectional relationship between the HDI and economic growth. In addition, a unidirectional causality relationship was found from the HDI to renewable energy consumption, and to research and development expenditure. The policy implication highlighting the directions for the use of variables in the context of sustainability is also discussed.

Natural Resource Rents and Economic Growth Paradox, the Analysis of Resource Curse and Its Transmission Channels in West Africa: The Role of Public Expenditure Policy

The study analyses the natural resource curse through the component of public expenditure policy, namely productive and unproductive expenditures, as plausible channels transmitting the resource curse in West Africa. The study examines which channel is the most prominent transmitter among public expenditure, Dutch disease, rent-seeking, and political institutions. A dynamic panel was adopted for the 1998-2018 period using Feasible Generalised Least Squares (FGLS) and Dynamic Ordinary Least Squares (DOLS) estimation techniques. The results confirmed the resource curse hypothesis in West Africa via productive expenditure and rent-seeking behaviour as the only relevant transmission channels. Moreover, productive expenditure interacting with natural resource rents mitigates the resource curse and can reverse it under a certain threshold. On the other hand, unproductive expenditure through government consumption expenditure exacerbates the resource curse. The findings suggest that appropriate productive expenditure policy measures in terms of fixed capital formation, and a diligent fight against corruption can overturn the resource curse over time.

Towards sustainable food production: What role ICT and technological development can play for cereal production in Asian–7 countries?

This article examines the impact of information–communication–technology (ICT) and technological development (i.e., fertilizers and pesticides usage) on cereal production in selected Asian–7 economies (Bangladesh, China, India, Japan, Nepal, Pakistan, and Sri Lanka) covering the period from 2000 to 2018. This empirical estimation has been carried out based on the CIPS, CADF, Westerlund bootstrap panel co–integration, Driscoll and Kraay (D–K), Feasible generalized least square (FGLS), and Dumitrescu and Hurlin (D–H) causality methods. The findings are the following: (1) the results confirmed that ICT has a statistically significant and positive impact on cereal production in the long run. (2) It is observed that fertilizers used have a statistically significant and positive effect on cereal production of selected economies in the long run. (3) Furthermore, the empirical outcomes identified a statistically significant two-way causal connection running from selected co–integrated variables (i.e., ICT, fertilizers, pesticides, and land size) to cereal production. Finally, this article suggests fruitful policy implications regarding ICT and technological development for selected economies.

DETERMINANTS OF PROFITABILITY OF REAL ESTATE COMPANIES: FGLS APPROACH EMPLOYED

The purpose of this research: The aim of this scientific work is empirically investigate the firm specific and macroeconomic factors that influence the financial performance of real estate companies in the US and UK.Originality / value of the research: The contribution of this empirical work is twofold. First of all, it is the first study where specific and macroeconomic variables are used to determine profitability of the real estate companies in US and UK, after global financial crisis period. Secondly, up to our best knowledge there is no study that employed political stability variable to determine profitability.Methodology: To empirically investigate the relationship between the dependent and independent variables, we conducted regression analysis. To correct for autocorrelation and heteroscedasticity, feasible generalized least square (FGLS) model is employed.Findings: Capital adequacy and capital structure, as well as management efficiency and corporate tax rate, were found to have a strong and significant impact on the financial performance of the real estate companies.