Role Of Macroeconomic Factors Research Articles

The role of macroeconomic factors in shaping employment trends in Somalia

The role of macroeconomic factors in shaping employment trends in Somalia

The Increasing Trend in Effective Tax Rates in India: Role of Macroeconomic Factors, Tax Policy Changes and Firm Characteristics

We show that over the last two decades, India’s effective tax rates (ETRs) have increased by 7.8 percent, which contrasts with the downward trend in ETRs for US firms documented by Dyreng et al. (2017). After controlling for changes in firm characteristics, macroeconomic factors, and tax policy changes, our findings show that ETRs increased by 0.37 percent per year during the sample period. Further, we examine the proposition that public firms are more likely to engage in non-conforming tax management than private firms. We observe a stronger upward trend in ETRs among private firms than public firms, consistent with the capital market pressure hypothesis. The permanent book-tax difference is the primary driver of the ETR trend for both private and public firms. Our findings contribute to the recent debate about the trend in ETRs by undermining concerns regarding rising corporate tax avoidance and reinforcing the argument that improved tax efficiency and economies of agglomeration in countries with large domestic markets contribute to higher ETRs. JEL Codes: G38, H25, H26, H32

Nexus between Macroeconomic Factors and Economic Growth in Palestine: An Autoregressive Distributed Lag Approach

All countries are trying their best to achieve maximum economic prosperity through employing efficient economic strategies. Countries seem to be conscious of various factors that can potentially affect economic growth. Given that, the current study examines the impact of various macroeconomic factors on the economic growth of Palestine. By employing the large range of quarterly data spanning from 2001 to 2020, the statistical outputs of the ARDL model show that government debt, donations, government expenditures, and unemployment rate adversely impact economic growth. However, other factors including credit facilities, inflation, and total investments positively impinge upon the economic growth of Palestine. Such dynamic impacts of various macroeconomic factors display both the detrimental and growth-promoting role of macroeconomic factors in determining economic prosperity. Our analysis suggests various policy implications to economic policy officials regarding the effectiveness of various factors for economic health. It is further recommended that international agencies working in aid- and donation-intensive countries should design efficient economic policies that can help such economies in coming out from economic distress.

Determinants of Firm Profitability in Africa

Using a large firm-level data set of 896 firms selected from 27 African countries between 2005 and 2017 and the generalized method of moments (GMM) technique, this study investigates the firm-specific, industry-level, and macroeconomic factors affecting firms’ profitability in Africa. Unlike existing studies that adopt non-standard measures of a firm’s managerial efficiency, this study introduces the standard measure of managerial efficiency into the determinants of a firm’s profitability. The empirical results show that managerial efficiency, size, age, leverage, tangibility, and firm’s growth are significant firm-level determinants of a firm’s profitability in Africa. Similarly, an industry-specific factor of competition exercises a significant effect on a firm’s profitability. However, the role of macroeconomic factors are not validated by the study. Policy recommendations follow the study.

Cash Flow Volatility and Debt Maturity Structure: Role of Macroeconomic Factors

This study investigated the moderating role of macroeconomic factors in the relationship among CFV and DMS by considering a sample of 380 listed non-financial firms of Pakistan over a period from (1999-2018). Ordered probit regression and executed some standard econometric techniques such as two-way fixed effect, generalized method of moments (GMM), to explain the robustness of main findings. The study findings endeavor that role of macroeconomic factors weakens the CFV relationship with DMS. In addition, carried out a conditional analysis to analyze the effect of cash flow volatility on debt maturity structure at different percentiles (25th, 50th,75th) of macroeconomic variables. The conditional effects results indicate that when inflation, money supply and interest rate vary from low to high level, the inverse effect of cash flow volatility on debt maturity structure is determined. However, when a country experiences higher economic growth the direct effect of cash flow volatility on the debt maturity structure is determined. this research findings suggest some recommendations in the subsequent ways: Firstly, firms when facing variation in the earning level may mitigate their financial distress, cost of bankruptcy by choosing short-term maturity debts. Secondly, the role of macroeconomic factors should be considered by the financial managers in the decision-making process as it effects the firms DMS. Thirdly, non-financial firms, banks, financial institutions may lessen their risk of non-performing loans by limiting their financing when experiencing high CFV.

Cash Flow Volatility and Debt Maturity Structure: Role of Macroeconomic Factors

Cash Flow Volatility and Debt Maturity Structure: Role of Macroeconomic Factors

The Role of Macroeconomic Factors as Moderating the Global Sharia Stock Index to the Indonesian Sharia Stock Index

This study examined the influence of the global sharia stock index on the Indonesian sharia stock index considering macroeconomic factors and their moderating role. The Global sharia Stock Index in this study used the Dow Jones sharia Market Index and the FTSE Global sharia Index Series. The role of moderation is proxied by inflation rate and exchange rate. The research data analysis method used multiple regression analysis and interaction test or moderating regression analysis. The results of the study showed that there was an influence of the Global Sharia Stock Index on the Indonesian Sharia Stock Index. In the moderation equation 1 (inflation) and moderation 2 (exchange rate) that interact with the Dow Jones sharia Market Index has a positive influence on each moderation equation. This showed that a moderating interaction with the Dow Jones sharia Market Index will strengthen its influence on the Indonesian Sharia Stock Index. The FTSE Global sharia Index Series that interacted with inflation in moderating equation 1 and the exchange rate in moderating equation 2 showed a negative effect. This showed that the interaction of the FTSE Global sharia Index Series with the two macroeconomic variables in each equation weakens its influence on the Indonesian Sharia Stock Index.

The role of macroeconomic factors in the capital structure of European firms: How influential is bank debt?

Based on a partial target adjustment model and the trade-off theory, this paper investigates whether the influence of macroeconomic variables of monetary policy on corporate leverage is shaped by the nature of borrowing, and more specifically by the presence of bank debt. Given the importance of banking institutions as transmitters of monetary policy, we argue that this source of debt might play a critical role in capital structure behaviour. In addition, as banking relationships are more informative and flexible, bank debt is likely to soften the effects of the economic cycle. Using a sample of European countries from 2004 to 2015, our evidence reveals that bank debt modifies the impact which macroeconomic variables of monetary policy have on a firm’s leverage. By comparing crisis and non-crisis periods, our results also show a more stable influence of said variables over the business cycle on bank debt than on non-bank debt.

DETERMINANTS OF PUBLIC DEBT IN LOWER MIDDLE INCOME COUNTRIES

The ever increasing of public debt has been affecting the financial stability of both high and low income countries for years and is a considerable subject to various author all around the world. The aim of this study is to understand which all factors influence the public debt in lower middle-income countries using DGMM regression method. With the dataset of 40 countries during the 1996-2015, the study provides empirical evidences on the role of macroeconomic factors on changes of public debt in lower middle-income countries, including trade openness, interest rates, budget surplus, inflation, economic growth, foreign direct investment, infrastructure, scale of the financial system. However, the unemployment rate does not have any impact whatsoever on debt to GDP ratios of these countries for over the period.

Cross-border merger and acquisition activities in Asia: the role of macroeconomic factors

PurposeThis paper aims to examine the influence of key macroeconomic factors on the inward and outward acquisition activities of six ASEAN (ASEAN: Association of Southeast Asian Nations) countries, namely, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, over the 1996-2015 period.Design/methodology/approachThe study uses alternative panel data methods, including pooled mean group, mean group and dynamic fixed-effect estimators.FindingsThe results indicate that gross domestic product (GDP), interest rate, exchange rate, money supply and inflation rate are the most important macroeconomic factors explaining the trends of cross-border mergers and acquisition outflows of the ASEAN-6 countries. Specifically, GDP, money supply and inflation rate have significant positive relationships with acquisition outflows, while interest rate and exchange rate exert significant negative influence. On the other hand, the authors find four significant macroeconomic factors explaining the trends of the inward acquisitions. Essentially, GDP, money supply and inflation rate have significant positive impacts on inward acquisitions, while the impact of exchange rate is negatively significant.Research limitations/implicationsUnavailability of data limits this study to pool six sample countries from ASEAN, instead of ten representative member countries.Practical implicationsThe results of this study can signal to firms or investors, involving in cross-border mergers and acquisitions, where to direct foreign resources flows. Moreover, having the knowledge about the relative levels of market size and other macroeconomic factors in both home and host countries can be of great importance for investment decision. Therefore, policymakers of ASEAN countries should make appropriate macroeconomic policies that can stimulate inward and outward acquisitions.Originality/valueThe main contribution of this paper is that it is the first to present the analysis of macroeconomic influences on the trends of inward and outward merger and acquisition activities in six ASEAN countries.

Real Wages in the Manufacturing Industry in Macedonia: The Role of Macroeconomic Factors, with Reference to Recession Times

In this paper we analyze the determinants of real wages in Macedonia’s manufacturing sector. We emphasize the macroeconomic aspects involved, and use econometric panel data techniques to model the behaviour of real wages for the period 2005-2010, using monthly data. We find non-negligible persistence of real wages. We further find a role for overall unemployment, real exchange rate and the tariff index in determining real wages.

The Role of Macroeconomic Factors in Explaining the Cost of Capital: Evidence from a Group of Emerging Economies

This study analyzes the dynamic relationship between the cost of capital and macroeconomic factors for a group of emerging markets spanning the period 1996-2009 and using the GMM estimator methodology, suggested in Arellano and Bond (1991). The empirical findings indicate that these macroeconomic factors play a significant role in explaining the cost of capital in the emerging markets.

Public to Private Transactions: Company Characteristics, Wealth Gain and Role of Macro-Economic Factors

The project addresses the Public to Private (PTP) Transactions. In this project, I focus on specifying the characteristics of companies going private. I also explain the sources for the premium paid to pre-PTP shareholders and finally I trace the macro-economic factors to examine whether they affect the PTP decision. There are some clear traits for a PTP firm, but there are also unclear characteristics which depend on not only the time that firms decide to go private but also the location where they base. I use different papers from U.S, U.K, Australia and Malaysia to support my argument. Likewise, when analysing the sources for wealth gain, I put all findings together, compare them and evaluate them. The macro-economic factors are analysed based on some relevant literature and data that I find from different sources. I then use that data to comment on the finding about macro-economic factors.

The role of macroeconomic factors in growth

Using a regression analog of growth accounting, I present cross-sectional and panel regressions showing that growth is negatively associated with inflation, large budget deficits and distorted foreign exchange markets. Supplementary evidence suggests that the causation runs from macroeconomic policy to growth. The framework makes it possible to identify the channels of these effects: inflation reduces growth by reducing investment and productivity growth; budget deficits also reduce both capital accumulation and productivity growth. Examination of exceptional cases shows that while low inflation and small deficits are not necessary for high growth even over long periods, high inflation is not consistent with sustained growth.

An Empirical Study of Long-Term Unemployment in Australia

This paper has two parts. The first part concentrates on modeling transitions out of unemployment using aggregated gross flow data. Models are estimated using monthly transition probabilities for March-April 1984. This analysis produces evidence consistent with negative duration dependence but sheds no light on the role of macroeconomic factors. The second part focuses on this issue. A time-series analysis of the proportion of long-term unemployment using data for four age and sex groups provides evidence that a proportionately greater increase in long-term unemployment in Australia in the 1970s has been associated with reduction in job availability and the effect of certain supply shocks.