Influence Of Macroeconomic Factors Research Articles

The Influence of Macro Economic Factors on Mortgage Market Growth in Kenya

This study examines the influence of macro-economic variables on the growth of the mortgage market in Kenya. Panel data is collected for a 30 year period, from 1984 to 2013 on the outstanding Real Estate Loan Portfolio as the dependent variable and the macro-economic variables of Average Yearly Inflation Rate, Average Yearly GDP growth Rate, Average Yearly Exchange Rate, Percentage Informal Sector Employment, Treasury bill rate and National Savings Rate as the predictor variables. Regression Analysis was used and the study found no evidence of significant influence of inflation, average GDP growth rate, Treasury bill rate and national savings rate on total real estate loan portfolio. However, the study finds evidence of relationship between informal sector employment, the per capita income and exchange rate. However, the model showed that 81% of the variation in the dependent variable could be explained by the predictor variables.

Macroeconomic variables and default risk: an application of the FAVAR model

Variables macroeconomiques et risque de credit : applications du modele FAVAR L’objet de cet article est d’etudier l’influence de la conjoncture economique sur le risque de credit. Nous utilisons le modele factoriel dynamique (du type FAVAR) comme propose par Stock et Watson [2005]. Nous presentons deux applications empiriques : l’une est centree sur les Etats-Unis et l’autre est centree sur la Zone Euro. Dans les deux applications, nous trouvons que le facteur le plus explicatif pour le risque de credit est celui qui est associe aux variables reelles. Par ailleurs, nous nous interessons a l’influence de la politique monetaire sur les taux de defaut. Nous trouvons que les probabilites de defaut augmentent legerement avec l’augmentation des taux d’interet et d’autant plus pour les entreprises de mauvais ratings. Neanmoins, nos resultats montrent que la politique monetaire est loin d’etre le facteur determinant pour expliquer les variations des taux de defaut.

RATING EVALUATION OF SELF-REGULATING ORGANIZATIONS OF ARBITRATION MANAGERS AS A MECHANISM TO IMPROVE THEIR PERFORMANCE

The influence of macroeconomic factors and company characteristics on the financial decisions (financing sources, a choice of model of optimum financing) are considered. The economic policy of state allows to understand made decisions the company concerning the capital structure. The given work allows to draw certain conclusions on why the Russian companies, in a greater degree, adhere to the pecking order theory. On analogies to the public companies, the state in the field of a debt policy also adheres to the pecking order theory.

Influence of Macro Economic Factors, Banking Industry Factor, and Banking Specific Factors on Banking Profitability in Indonesia: Panel Data Analysis

This study aims to investigate the influence of macroeconomic factors, industry specific factors and specific factors in the bank's profitability of Indonesian banking. This research was conducted with a purposive sampling method, where the sample used is a bank listed on the Indonesia Stock Exchange and publicizing the full financial statements from 2006 to 2011. Based on those samples criteria, obtained samples of 18 banks. Data analysis method used in this research is the analysis of panel data. The analysis shows fixed effect method produces the best model for predicting the profitability of banks in Indonesia compared to method of pooled and random effect.The results are consistent with the theory underlying profitability of the bank, which was conducted by Ho and Saunders (1981), known by the dealership theory. The theory states that as financial intermediaries, bank expects to get a positive net interest margin (NIM) to face uncertainty generated by the unsynchronized between the deposits offers and credit demands. That consistency is shown with the support of the results of empirical testing of hypotheses related to the operating costs and capital adequacy for dependent variable which measured by the NIM. For the dependent variable of profitability as measured by ROA, consistency is supported by the empirical testing of hypotheses related to credit risk, operational costs, inflation and economic growth. The theory underlying negative impact of market concentration conducted by Bain (1951) known as the structure conduct performance theory is not supported by empirical results.

Regional Banks in the System of Government Regulation of Economy

The article analyses activities of regional bank which is interpreted as the commercial organization which functions as a part of the banking system under the control of the central bank and takes part in the system of monetary regulation of regional economy. Special attention is paid to the mechanism of interaction and interconnection of regional bank with participants of two-level banking system which is presented by horizontal connections and relations with the other elements of the banking system and market entities in the whole, as well as by vertical connections with the central bank presented by management of banking regulation and supervisory control. Influence of macroeconomic factors on condition of the banking system is shown. DOI: 10.5901/mjss.2014.v5n12p39

Macroeconomic Factors and Corporate Capital Structure

The aim of this study is to indicate the influence of macroeconomic factors on corporate capital structure in different European countries. The recent Global Financial Crisis and the following European debt crisis show the significance of the country financial stability, consequently the efficiency of fiscal and monetary policies, and their impact on the private sector. The macroeconomic policies of a country affect the financial performances of the companies and their future sustainable development and growth. We analyze the influence of external determinants on the corporate capital structure of non-financial manufactured companies based on the evidence from European developed countries and emerging markets for the period 2006–2010, in order to compare the level of the impact on the capital structure according to the countries’ specifics. The managers make their financial decisions according to the source of financing and capital structure based on the company's advantages and disadvantages, i.e. its internal characteristics, and doubtless on the macroeconomic conditions and country specifics, i.e. external factors. For the purpose of this study the macroeconomic factors are divided into two groups represented fiscal and monetary policies of a country. The correlation and regression techniques are used to identify the relations between these external determinants and capital structure. The findings show the significance of macroeconomic factors in the decision making process regarding capital structure and the source of financing.

The Influence of Macroeconomic Factors and Banking Fragility on Offshore Banking Unit (OBU)

This paper focuses on the offshore banking units (OBUs) of Taiwan, Singapore, Hong Kong, Japan, Malaysia, and Thailand as research samples and uses the bank competition index to separate both perfect competition and oligopoly. We employ the seemingly unrelated regression (SUR) model to examine the differences in the influence of OBU assets from macroeconomic factors and the degree of banking fragility. The empirical results from our monthly data from 1996-2005 suggest that the constrained equations of the SUR model are suitable for evaluating the OBUs. The main factors affecting OBU assets were the ratio of imports to GDP, financial deepening index, lending-deposit rate differences, banking sector fragility, M2 multiplier, and real exchange rates. If a regional crisis occurs, the spillover effect could be more easily avoided by having more restrictions on OBU loans. By contrast, Thailand and Malaysia have loose expansionary financial systems, leading to crisis occurrence.

Health in the Long-Term Unemployed

Although the unemployment rate in Germany is currently low, more than a million persons in the country have been out of work for more than a year. In this review article, we address these persons' state of health, the effect of unemployment on health, and the influence of macroeconomic factors and social policy. This article is based on a selective review of pertinent literature in the PubMed database. Large-scale meta-analyses and systematic reviews have shown that the long-term unemployed have an at least twofold risk of mental illness, particularly depression and anxiety disorders, compared to employed persons. Their mortality is 1.6-fold higher. Unemployment seems to be not only an effect of illness, but also a cause of it (i.e., there is evidence for both selection and causality). Learned helplessness is an important psychological explanatory model. Limited evidence indicates that the long-term unemployed have a moderately elevated prevalence of alcoholism; unemployment can be both an effect and a cause of alcoholism. Unemployment also seems to be associated with higher risks of heart attack and stroke. Cancer can lead to loss of employment. The link between unemployment and poorer health is strengthened by macroeconomic crises and weakened by governmental social interventions. The long-term unemployed carry a markedly higher burden of disease, particularly mental illness, than employed persons and those who are unemployed only for a short time. The burden of disease increases with the duration of unemployment. The vicious circle of unemployment and disease can be broken only by the combined effects of generally available health care, special health-promoting measures among the unemployed, and social interventions.

The Influence of Macroeconomic Factors over the Firm’s Diversification Strategy: Empirical Evidence from US Publicly Trading Firms from 1979 to 2006

The objective of this research is to establish whether a relationship between firm motives for diversification and macroeconomic conditions exists. To measure the influence of the eco nomic factors on the firm diversification decision, if any, several multi-factor models are employed. As a measurement of diversification level, the change in the number of segments per firm by year (SegGrowth) is estimated on some economic indexes. The study period is divided on sub-periods based on the bull and bear markets as defined by Dow Theory and the Standard & Poor’s Equity Research. Results from the regression models suggest that the firm diversification decision is influenced by poor macroeconomic conditions. The average number of segments per year during bear market periods is significantly greater than that for the bull market periods. These results indicate that firms have a propensity to diversify dur ing poor economic conditions. One possible explanation is that when the firm faces eco nomic and financial risks, the diversification could be a solution to lower the risk or to exploit new productive opportunities.

Have They VAR? Market Momentum, Macroeconomic Factors, and Investor Sentiment: Evidence from Taiwan Stock Exchange

Examining the Taiwan Stock Exchange during the period of January 1991 to June 2009, this research attempts to discover the influence of macroeconomic factors and investor sentiment on market momentum. The OLS model is used for initially understanding whether the influence on the market momentum, while the VAR models further considers the effect of the lagged variables and examines the interactions among the macro economy, investor sentiment, and momentum. The results which show the existence of the interactions support our predictions, implying that the pricing of stocks or firms should take account of future macroeconomic situation and investor sentiment to get an optimal price. Furthermore, the evidence indicates that the market momentum is affected by exchange rate and oil price. This effect can be possibly attributed to the US dollar fluctuation aroused by the volatility of the oil prices, and in turn affecting the consumers’ aspiration level. The changes in the consumers’ aspiration will further influence market momentum. Suggesting that the momentum can be attributed to investor sentiment, our conclusion supports the argument of Baker and Wurgler (2006).

Influence of macroeconomic factors on the Russian stock market

The article highlights approaches to estimating external factors having an impact on development of the Russian stock market. It contains different standpoints of international and domestic authors on this subject. The authors have tested the econometric EGARCH model in the article in order to evaluate the impact of various factors on the domestic stock market. The factors analyzed include the gross domestic product (GDP), US dollar exchange rate, euro/dollar ratio, net capital movement, and Brent oil free market price. The results of analysis show the heavy reliance of the dynamics of the Russian MICEX stock exchange index primarily on the oil price and US dollar exchange rate.

The Effect of Macroeconomic Factors on Indian Share Prices: A Sectoral Approach

The influence of macroeconomic factors on stock prices has attracted immense attention in recent years. The subject is being considered significant in both academic research and practical investment analysis. It is a common knowledge that fundamental analysts try to identify the trend in several macroeconomic variables and accordingly its effect on stock returns. The success of ‘buy and hold’ strategy adopted by these investors who focuses on ‘intrinsic value’ of assets is assumed to depend largely on future movements in various macroeconomic variables that directly or indirectly affect a firm’s business operations and thereby its stock returns. Considering the two significant sectors of Indian economy viz. manufacturing and financial services sectors, we address the following issues: (A) Does the long-run relationship exists between macroeconomic variables and stock prices in manufacturing and financial services sectors in India? (B) Is there any significant difference between macroeconomic factors affecting stock returns in manufacturing sector and those in financial services sector?

The Variable Response of Agricultural Supply to World Price Instability in Developing Countries

AbstractThis paper analyses the effect of world price instability on the agricultural supply from developing countries and determines to what extent this effect is dependent upon the macroeconomic environment. Producers from agricultural commodity‐exporting countries are particularly vulnerable to the fluctuations of world prices: they are widely exposed to price shocks and have little ability to cope with them. Nevertheless, the effectiveness of risk‐coping strategies is conditioned by the influence of macroeconomic factors (infrastructure, inflation and financial deepening). Thus country‐specific price indices are established, and the response of production indices to price instability indices is estimated by using a panel model including macroeconomic variables which interact with price instability. Such analysis is based on a sample of 25 countries between 1961 and 2002. The results highlight a significant negative effect of the world price instability on supply, and further show that high inflation, weak infrastructure and a poorly developed financial system exacerbate this effect.

Dividend behaviour of Indian companies under monetary policy restrictions

PurposeThe dividend payout behaviour of firms is a well‐studied subject in finance. In recent times, the influence of macro economic factors and understanding their implications far corporate financial decisions has assumed significant importance. The objective of this paper is to study the dividend payout behaviour of firms in India under monetary policy restrictions. Monetary policy restrictions are expected to affect the availability and cost of external fund relative to internal funds. The hypothesis is that during monetary policy restrictions the dividend payout policy changes and payouts reduce.Design/methodology/approachThe Lintner framework is extended to examine the impact of these restrictions on the dividend payout. Balanced panel data of 571 firms for years are used, from 1989 to 1997 together with, the GMM estimator, which is the most suitable methodology in a dynamic setting.FindingsThe results show that Indian firms have lower target ratios and higher adjustment factors. The finding suggests that the restricted monetary policies have a significant influence on the dividend payout behaviour of Indian firms; they cause about a 5‐6 per cent reduction in the payout ratios.Research limitations/implicationsThe findings of this paper suggest that macro‐economic policies do have an impact on corporate financing decisions. The future research should examine the impact of various other macro‐economic policies and its components on the corporate financing decisions of firms.Practical implicationsThe significance of the macro economic policy variables suggests that monetary policy restrictions do have an impact on the cost of raising funds, and the information asymmetry between lenders and borrowers increases, which forces companies to reduce their dividend payout.Orginality/valueTo one's knowledge this is the first study providing evidence of the restricted monetary policy constraining the dividend payout policies of firms in India.

Macro-economic factors influencing world aquaculture production

. The influence of macro-economic factors on production and consumption of aquatic products in the world was evaluated. World aquaculture production and its growth were analysed in terms of commodities, species, countries and regions. Special attention was given to interpreting the consequences of the results obtained on policy and planning of future aquaculture development. The consumption of both aquafood and meat increased significantly with income on a per caput basis in the world. The ratio aquafood:meat decreased with increasing per caput income, stressing the relative importance of aquafood in low-income countries. A significant correlation between the consumption of aquafood and aquaculture production was found for Asia, Europe and on a world-wide scale and it is therefore argued that fisheries pave the way for aquaculture development. Growth of finfish culture tends to correlate with agricultural growth. Africa and Latin America have low aquaculture productions compared with their aquafood consumption. These regions offer the highest probability for rapid growth in aquaculture production in the near future.

THE FACTOR OF THE STATE SUPPORT IN THE HORTICULTURE INDUSTRY DEVELOPMENT TRENDS

Justified socio-economic importance of the horticultural industry. Found that the lack of state support in the size, allowing to reduce the growing deficit of own funds of agricultural producers, hinders systematic development of horticulture, and allocations of state does not provide to mitigate the effects due to the negative impact of macroeconomic factors. Describes the main normative documents regulating the development of horticulture in the Russian Federation. The influence of macroeconomic factors on industry development, installed emerging trends: the rising costs for laying the Foundation plantings and care until fruiting stage, exceeding the relative increase in the volume of subsidy; increase in the deficit of own funds of agricultural organizations for the renovation of the space and costs for the organization of reproduction processes, which reduces the rate of renovation of plantations. The factors that have significant influence on the development of the industry, actualize, in particular, the need to increase volumes of state and differentiation of forms of state regulation. Comparable analysis of the dynamics laying areas of perennial plantings and measures of state support of horticulture is evidence of emerging imbalances in the organization of reproduction processes. A correlative relation of the degree of influence of the dimension of the state support at the rate of renovation of perennial plantings. Reviewed the new rules of subsidizing of horticulture in 2020. Justified by the necessary amount of subsidies for planting and care before the entry into fruiting with emerging macroeconomic imbalances in the sectoral development.