Testing For Serial Correlation Research Articles

Does the Income from Tourism and Remittances Really Matter for Economic Growth? Evidence from the Nepalese Economy

This study investigates the effects of tourism and remittances on Nepal's Gross Domestic Product (GDP). It is based on secondary information acquired from Nepal's several economic surveys and publications from the Nepal Rastra Bank. It spans 34 fiscal years, from 1987/88 through 2020/21. The study employs descriptive and exploratory research designs.Descriptive statistics, unit root testing, Augmented Dickey-Fuller test, ARDL bound testing approach, heteroscedasticity test, serial correlation test, and CUSUM and CUSUM squares test of stability analysis are some econometrics instruments utilized.The GDP, remittances, and income from tourism are found to be correlated over the long term. In the long run, remittances and tourism revenue increase Nepal's GDP, but there is no discernible effect in the short run. The GDP increased by 0.794 and 0.157 percent for every one percent increase in tourist and remittance income. Therefore, the impact of tourism income is more significant than the impact of remittance income on GDP. Therefore, policymakers can employ tourism to promote Nepal's long-term economic growth.

EFFECT OF CREDIT RISK MANAGEMENT ON THE FINANCIAL PERFORMANCE OF BANKING SECTOR OF BANGLADESH: A STUDY ON GENERATION-BASED SELECTED LISTED COMMERCIAL BANKS

<p>The financial sector of the country is mostly comprised of banking institutions; those are leading the economy with great exposure with the contribution to the development process. However, the banking sector of Bangladesh is disturbed by the large-scale amount of non-performing loans while has become an essential part of the finance of the industries. As part of the measurement of credit risk and macro factors average lending rate, inflation, NPL size, capital adequacy ratio, liquidity ratio have been selected to test the influence on the financial performance found through the return on asset of the selected banks. To conduct the study 9 banks of three generations have been selected for the period of 2016 to 2022. Robust least square method of regression and error correction term have been run to oversee the real impact on financial performance while endogenity and random walk in the values are being considered to overcome through a dynamic regression model. NPL has a negative impact on the performance and average lending rate, inflation, liquidity ratio and capital adequacy ratio bring a positive impact on the financial performance of the banks. Breusch-Pagan LM test confirms that cross-sectional dependency exists and VAR serial correlation test finds autocorrelation in the data set. The policy implication of this study suggests that the high NPL ratio must be reduced and CAR and LR must be improved to get the desired results of the performance. Strong fiscal and banking regulation should implement so that governance can be ensured to create responsibility and financial strength.</p><p><strong>JEL:</strong> E4, D81, E33, E44</p><p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/soc/0045/a.php" alt="Hit counter" /></p>

Testing serial correlation in a general d-factor model with possible infinite variance

It is well-known that the presence of serial correlation may result in an inefficient or even biased estimation in time series analysis. In this paper, we consider testing serial correlation in a general d-factor model when the model errors follow the GARCH process, which is frequently used in modeling financial data. Two empirical likelihood-based testing statistics are suggested as a way to deal with problems that might come up with infinite variance. Both statistics are shown to be chi-squared distributed asymptotically under mild conditions. Simulations confirm the excellent finite-sample performance of both tests. Finally, to emphasize the importance of using our tests, we explore the impact of the exchange rate on the stock return using both monthly and daily data from eight countries.

Time Series Analysis of Temperature and Rainfall in the Savannah Region in Togo, West Africa

This study investigates the trend in monthly and annual rainfall, and minimum and maximum temperature (Tmin and Tmax) in the Savannah region of Togo. The historical data of Mango and Dapaong weather stations from 1981 to 2019 were used. A serial correlation test was applied to all time series to identify serially independent series. A Non-parametric Mann–Kendall (MK) test was applied to serially independent series. The magnitude of the trend was calculated using the Sen’s slope (SS) method. For the data influenced by serial correlation, a modified version of the Mann–Kendall test was applied. An open-source library package was developed in the R language, namely, “mkmodified”. For annual rainfall, results showed a significant increasing trend at Dapaong (p < 0.05) and a non-significant decreasing trend at Mango (p > 0.05) at 95%. There was an increasing trend in the Tmin both at Mango and Dapaong. No statistically significant trend was found at Mango (p > 0.05), while at Dapaong (p < 0.05), a significant trend was found at 95%. Simlarly, there was a statistically increasing trend in the Tmax both at Mango and Dapaong. Rainfall in Dapaong has increased (5.50 mm/year) whereas in Mango, it has decreased (−0.93 mm/year). Tmn increased by 0.04 and 0.008 °C per year in Mango and Dapaong, respectively. Tmax increased by 0.03 and 0.02 °C per year in Mango and Dapaong, respectively. A Rainfall Anomaly Index (RAI) was also used to present a temporal variation in rainfall; the historical series presented drier years. Many studies have analysed the trend of climate parameters in northern Togo, but none of them has specifically targeted the Savannah region that is considered the poorest region of the country.

Drought assessment and rainfall trend analysis in southwestern Nigeria

AbstractProlonged instability and insufficiency of rainfall resulting in drought, extreme weather events, and food insecurity are climate change‐related challenges bedeviling humanity. This study assessed drought conditions and rainfall trends in southwestern Nigeria, using the 1984–2014 rainfall dataset from the Nigerian Meteorological Agency (NIMET). The coefficient of variation (CV), long‐term standardized precipitation index (SPI), serial correlation test, Mann–Kendall trend analysis, Sens's slope estimation, and Pettit test were carried out using various R programming packages. Long‐term mean annual rainfall ranged between 1224.7 and 1537.1 mm. The highest variation (17.3%) was observed for Abeokuta and Ikeja. SPI analysis revealed Ibadan and Oshogbo as the driest and wettest stations, respectively. There was no serial autocorrelation in the dataset. The Mann–Kendall trend showed an upward rainfall trend for Abeokuta, Ibadan, and Ikeja and a downward trend for Akure and Oshogbo. Sen's slope annual rates of change in mm for Abeokuta, Akure, Ibadan, Ikeja, and Oshogbo are 6.69, −2.36, 2.07, 7.82, and 1.42 respectively. The Pettit test revealed change points that are not statistically significant. The drought assessment largely showed a cyclical SPI pattern with greater years of dryness. Given the increasing impact of climate change, future studies are needed to simulate the local drivers of drought severity and frequency and the changing rainfall pattern in rapidly urbanizing cities. There is also the need to incorporate climate‐related adaptive strategies in existing water management policies.

The impact of geopolitical risk on cash holdings policy: evidence from an emerging market

PurposeThis study aims to examine whether geopolitical risk (GPR) impacts the cash holdings behavior of 210 Turkish firms between 2005 and 2019. The authors choose Turkey as a country of interest because Turkey has an important place in terms of geographical location and serves as a bridge between Europe and Asia. Considering the prominent role that can play in decision-making processes, the authors thought that analyzing the impact of GPR on the cash holdings determinants of Turkish firms would be important and interesting. A widely accepted view is that GPRs play an important role in the economic decisions of emerging countries, such as Turkey.Design/methodology/approachThe authors examine models with fixed effects (FE), random effects (RE) and pooled ordinary least squares (POLS), respectively. First, the authors analyzed whether POLS, FE or RE would be the most appropriate model. According to the F-test and the Breusch–Pagan LM test, the FE and the RE models are more suitable than POLS. Then, according to the Hausman test results, the authors found that FE is this study's most appropriate model. After determining the validity of FE, the diagnostics tests of heteroscedasticity, autocorrelation and serial correlation tests are examined. Due to the presence of these problems, Driscoll and Kraay's (1998) test, which is the robust standard error estimator, is used.Findings The authors find a positive relationship between GPR and cash holdings after controlling firm-level control variables. Firms faced with uncertainty prefer to hoard cash as a precautionary measure. In keeping with real options theory, firms postpone the investments of firms under uncertain conditions. The use of alternative measurements for GPR and cash holdings ensures the validity of our results. The authors' research reveals that investors and politicians should pay more attention to the influence of GPR on the determinants of the cash holdings of firms.Research limitations/implicationsThere are limitations for this study, but this study may provide opportunities for further studies. First, this study has only data from Turkey. This situation mitigates cross-country effects. In future studies, the number of firms, countries of focus and time span can be expanded. Second, this study does not consider the period of coronavirus disease 2019 (COVID-19) that increased risk and uncertainty worldwide. Further studies may consider the impact of COVID-19 and geographical risks relating to cash holdings. Third, the authors try to choose more relied independent and control variables.Practical implicationsThe authors' results provide some insights that are relevant to practitioners and policymakers. Managers need to consider GPR in managers' financial decisions based on managers' firm-specific characteristics. Turkish policymakers should target improving policies to alleviate the negative effects of GPRs. Regulators should postulate more encouraging policies to firms in an environment of GPR. Regulators can give firms more time to understand and analyze the GPRs and the impacts of GPRs to adjust regulators' day-to-day activities.Originality/valueThere are fewer studies in the literature that analyzed the relationship between GPR and cash holdings. This study aims to full this gap in the literature.

Impact of Intermediation of Commercial Banks on Capital Formation in Nigeria

This study examined the impact of intermediation of commercial banks on capital formation in Nigeria. A sample of fifteen (15) banks listed on the NSE between 2000 to 2019 was utilized by the study and data was gathered mainly through secondary sources. The study employed time-series data and ex-post facto research designs to establish the impact of total deposit liabilities, credit to private sector and bank investment on the gross fixed capital formation in Nigeria. The data was analysed using the ordinary least square (OLS) regression technique after conducting series of diagnostic tests, multicollinearity, serial correlation, normality, heteroskedasticty and stationarity tests. The study documented negative and statistically significantly between total deposit liabilities and gross fixed capital formation. Furthermore, results from the regression analysis established positive and significant impact of credit to private sector on the gross fixed capital formation in Nigeria. Further analysis revealed a positive and insignificant impact between bank investment and gross fixed capital formation in Nigeria. The study concluded that total deposit liabilities, credit to private sector play major role in influencing capital formation in Nigeria while bank investment does not influence capital formation in Nigeria. The study therefore recommended among others that adequate efforts be made by commercial banks to increase their level deposits as that will help in increasing the nation’s capital formation. This will most likely result into increased investment activities which will enhance capital formation in Nigeria needed for its real sector investments and industrial growth. It was also recommended that Commercial banks credit department should advance more credit to private sector used for economic activities that will impact the real economy like the manufacturing and agricultural sectors

Factors Influencing Foreign Direct Investment Inflow in Somalia

Purposes: The last four decades, the value of foreign direct investment (FDI) inflow in Somalia has fluctuated between $339,000,000 in 2016 and $43,390,000 in 1970. Thus, this research investigated the factors influencing foreign direct investment (FDI) inflows in Somalia. Over the period from 1980-2017 and data are obtained from the World Bank. Design/ Methodology/ approach: this study used The Vector Auto regression (VAR) model. The econometric methodology to be utilized includes the unit root test for used Augmented Dickey-Fuller (ADF), co-integration test, Johansen integration test and diagnostic test includes serial correlation, normality, heteroskedasticity and AR root test. Furthermore, they are also utilized for VAR Granger causality tests. Findings: The findings of this paper indicated unit root test showed that all variables except external debt are not stationary at the level but become stationary after first differencing at the 10% level of significant. The co-integration test indicates the relationships between variables are integrated. The Granger-causality test shows only one-way Granger-causality relationships from FDI to GDP, import and export variables or so-called unidirectional Granger causality. Moreover, impulse response function indicates results all variables are positive related in the short run and long run except for imports which is negative related with FDI. Although, GDP, imports and inflation are significant to FDI, but export and external debt are insignificant to FDI. Therefore, this research concludes that FDI influences economic growth in Somalia. Research limitations/ implications: Although this research has expended and evolved prior studied various respects, a comprehensive and systematic time-series study on FDI and its determinants in Somalia would involve more capitals than had been made available for this study. There are still a number of specific constrains to be noted on the investigating FDI and its determinants in this paper, some factors such as political and macroeconomic instability, human capital, infrastructure and corruptions are not considered owing to data availability. Moreover, it’s recommended that future studies could improvement widely and update research in FDI.

Spatiotemporal Rainfall Variability and Trend Analysis of Shimsha River Basin, India.

Karnataka state has the second highest rainfed agricultural land in India, where agricultural output relies heavily on rainfall. The Shimsha basin, a sub-basin of Cauvery in the state, comes under a semi-arid region and predominantly consists of rainfed agricultural land. Rainfall patterns have changed dramatically with time resulting in frequent floods and droughts. Understanding the spatiotemporal distribution of rainfall and its change patterns in the area would benefit sustainable agriculture planning and water resources management practices. The current study aims to determine the variability and trend in rainfall. The daily rainfall data of the Shimsha basin from 1989 to 2018 is collected, and the annual, seasonal, and monthly rainfall totals and the number of rainy days are derived. All the time series are subjected to statistical methods to examine rainfall variability and trend. The mean, standard deviation, coefficient of variation (CV), and Standardized Anomaly Index are used for the preliminary and variability analysis, while the coefficient of skewness and kurtosis are used to understand the rainfall distribution characteristics. The homogenous and serially independent series are identified by homogeneity and serial correlation tests. The trend in the homogenous and serially independent series is identified by Mann-Kendall and Spearman's rank correlation tests, while the magnitude of the trend is quantified using the Sen's slope technique, and the trend change point is evaluated using the sequential Mann-Kendall test. Based on the study, the average rainfall in the study area is 801.86mm, with CV ranging from 43.3 to 22.27%. The southwest monsoon (SWM) season brings the greatest rain to the basin, followed by the post-monsoon (PM), summer, and winter seasons. In the annual time frame, except one station, all other stations have shown significant or insignificant increasing trends. The seasonal rainfall has shown insignificant rising trends during the summer and winter seasons while insignificant increasing and decreasing trends during the PM season. The SWM season has indicated significant increasing trends, insignificant increasing and decreasing trends. Overall, the study area has noticed an increased annual and seasonal rainfall except for the post-monsoon season, during which the rainfall showed a considerable decline. The findings of the study are helpful in water resource management, agricultural planning, and socioeconomic development in the study area.

The Effect of Cashless Policy on Economic Growth in Nigeria: An Autoregressive Distributed Lag Approach

The study investigated the effect of cashless policy on economic growth in Nigeria using quarterly time series data spanning through the period of 2012 to 2021 while the research design adopted for the study was the ex-post facto research design. Diagnostic test such as serial correlation, heteroskedasticity and Cusum test were conducted. Phillip-Peron and Kwiatkowski-Phillips-Schmidt-Shin (KPSS) were used to carry out unit root test on the variables while the Auto-Regressive Distributed Lag (ARDL) was used for the data analysis. The findings revealed a significant relationship between Cheque (CQ) and Internet banking (IB) with the Gross Domestic Product while the relationship between the Automated Teller Machine and the Gross Domestic Product is negatively insignificant. The study concludes that cashless policy influences economic growth in Nigeria and therefore suggests that the Central Bank of Nigeria should encourage Banks to offer quality ATM services to their customers. This is expected to boost the adoption of alternative payment system which is amongst the rationale for introducing the cashless policy.

Impact of Crude Oil Shrinkage on Stock Market Returns in Nigeria

This study investigated impact of Crude Oil shrinkage (COS) on stock market returns (SMRs) in Nigeria. The study spanned for a period of twenty-one years (2000-2020). The SMRs which was proxy by market capitalization while COS which was proxy with CO price, inflation rate, balance of trade and exchange rate. The specific objectives are: the connection between the CO price and SMRs in Nigeria; the connection between Nigeria's SMRs and inflation rate; the co-existence between the balance of trade and SMRs and the link in Nigeria between the exchange rate and SMRs. The data was sourced from CBN Statistical Bulletin 2020. The study employed time-series data. OLS multiple regression estimation technique was used, normality test, serial correlation test, and Heteroskedasticity test with the aid of E-views 9.0 statistical software. The results revealed that; CO price has a P-value 0.002<0.05; inflation rate has a P-value of 0.000<0.05; balance of trade has a P-value of 0.04<0.05 while exchange rate has a p-value of 0.000<0.05. Considering that all of the independent variables' p-values are significant, are less than 5% significant level, the study concluded that COS has a crucial and positive effect on SMRs in Nigeria. The report proposed that the Nigerian government judiciously use oil revenue to favourably impact the economy, to adapt SMRs shakes it won't hurt the economy so harshly because the resources were used properly when it was thriving.

Model‐based estimation in monetary policy inertia and it's another possibility

AbstractIn this paper, different monetary policy rules are re‐estimated employing real‐time data, known as Greenbook data, through MLE and Bayesian Estimation. The results favour the rule with persistent shocks and show that the inertial movement of the Federal funds rate is an illusion, as mentioned by Rudebusch (2002). Since it would be possible to have an omitted variable bias due to impure serial correlation, however, the rule with persistent shock could imply that the other serially correlated variable is required to explain the inertial movement of Federal funds rates. Based on this idea, serial correlation tests are implemented, showing the possibility of an omitted serial correlated variable. Therefore, it is reasonable to search for other persistent variables. As an illusion implies unpredictability in the movement of the Federal funds rate, this hypothesis could be against the credibility of the central bank. In order to have a reasonable explanation for the inertial movement other than persistent shocks, therefore, modifying the rule with a 3‐month t‐bill rate is re‐estimated. The result shows that the rule with the t‐bill rate outperformed in all aspects and is compatible with one theoretical explanation of minimizing the financial volatility for inertial movement.

ECONOMICS IS NOTHING WITHOUT THE IMPACT OF MACROECONOMIC DETERMINANTS ON ECONOMY OF PAKISTAN

This research aims to find the impact of Macroeconomic Variables on Economic Growth of Pakistan. The study helps to understand the implications of Personal Remittances, Inflation Deflator, Electric Consumption, Foreign Direct Investment, Imports, Mineral Resources, GDP Per Capita, Gross Capital Formation, Domestic Credit to Private Investment, Real Effective Exchange Rate, and Broad Money on the Gross Domestic Product of Pakistan. The 51 years of time series data is taken from 1971 to 2021 which is collected from the website of State Bank of Pakistan, International Financial Statistics and from World Development Bank Indicators for the years 2021-2022. The model is tested by using Ordinary least square. All the variables are significant. R2 is 0.98 which shows that selected independent variables are explaining the variation in dependent variable with the highest percentage. F-Statistics confirms the overall goodness of fit of the model. Stationarity level of the data is analyzed by Augmented Dickey-Fuller (ADF) test. Durbin Watson is 2.0, which is an indication of no autocorrelation. Descriptive Statistics are calculated to see the probability of Jarque Berra. To check the Normality Histogram is drawn. Stability of the model, serial correlation, heteroscedasticity, Normality and Structural Stability diagnostic tests have been applied on the data. LM Test, Ramsey Reset Test, Breusch-Pagan-Godfrey test, Correlation, Covariance Matrix, Correlogram, forecast model, CUSUM and CUSUM SQ and recursive stability graph has been tested to fulfill the conditions of time series analysis. Co-integration test has shown that there is long run association between variants.Another test to see the short run association between change ables show that there is neither one way nor two way causality among them..The findings are that macroeconomic variables Broad Money, Gross Capital Formation in $, Minerals and GDPPC$ have positive significant relationship with is significant relationship with GDP and their respective t-values are 3.6808, 10.99676, 3.55973, 3.0824338 and 2.7287. Imports, Foreign Direct Investment, Electric Consumption and Direct Credit on Private Investment have significant negative relationship with Economic Growth of Pakistan. Their respective t – values are -3.10085, -2.72875, -2.61744 and -6.15435. Personal Remittances, Exchange Rate and Inflation Deflator have insignificant relationship with GDP and their respective t-values 0.809843, 1.062302 and -0.10167.Government should ensure peaceful environment for foreigners to invest in Pakistan. The law-and-order situation, political unrest, high rate of unemployment, increase in prices, devaluation of currency and widening energy crisis needs to be handled from individual level to aggregate level. Keywords: Remittances, Foreign Direct Investment, Gross Domestic Product, Exchange Rate, ADF, ARD.

Determinants of the investments: a case study of Côte d Ivoire

Purpose- Based on the importance of investments in supporting the economic growth in the country, the main objective of this study is to investigate the determinants of the investment in Cote d’Ivoire over the period 1980-2020. In order to achieve the objective, this study examines the interactive effect of external debt, communication infrastructures, imports and inflation on the investments in Cote d’Ivoire. Methodology- Annual time series data over the period 1980-2020 were employed in this study. The data are obtained from the World Bank. The ADF unit root test, Johansen cointegration test, OLS model, Granger causality test, and CUSUM test were applied to analyze the data. Ordinary Least Squares (OLS) model has been used in this study to estimate the coefficient of the variables, and it has been subjected to a number of statistical diagnostic tests, namely, the normality, serial correlation, and heteroscedasticity tests to ascertain its statistical adequacy. Findings- The ADF unit root test results indicated that all variables in the model are not stationary at the level but became stationary after first differencing. The Cointegration test pointed to a significant long-run relationship among the variables. Besides, the results of OLS model showed that investment is positively and significantly related with communication infrastructures, importing and inflation, but it is related negatively and insignificantly with external debt. Imports have the biggest effect on the investment. The Granger causality test shows that there are no short-run causality relationships between the variables. However, there are bidirectional long-run causality relationships between investment, external debt and importing, and unidirectional long-run causality relationships running from communication infrastructures and inflation to investment. Lastly, CUSUM test indicated that there are no structural changes in the model. Conclusion- The study therefore recommends that the government should use external debt more efficiently, reduce corruption, improve the infrastructure and create an attractive investment climate, as well as reducing most tariff and nontariff barriers, which will support the investment in the country.

Household and contextual indicators of poverty in the Gauteng province of South Africa: A multilevel analysis

This study aims to analyse the socio-economic factors contributing to poverty reduction in South Africa using time series data from 2006 to 2019. The stationarity of the variables will be assessed by applying the Augmented Dickey Fuller (ADF) test. The Autoregressive Distributed Lag (ARDL) analytical technique will be adopted to analyse the cointegration amongst variables pertaining to different orders of cointegration amongst lower bound [I(0)] and upper bound [I(1)]. The study will analyse the long-term and short-term effects of the socio-economic factors contributing to poverty reduction in South Africa. If the calculated F-statistic is greater than the upper bound [I(1)], the Error Correction Model will be adopted to assess the short-run effects. Diagnostic tests will be performed to test the robustness of the model. The tests will performed will include: (1) the Breusch-Godfrey test for serial correlation; (2) the Jarque-Bera test for normality; (3) the Breusch-Pagan-Godfrey technique to test for heteroscedasticity; and (4) the cumulative sum chart to detect deviation from the average associated with a subgroup.

Impact of Climate Change on Cassava Yield in Nigeria: An Autoregressive Distributed Lag Bound Approach

Across the globe, climate change is threatening the environment, crop yield and food security. The key to ensuring a sustainable environment, crop yield increase and food security is to identify the long-term significant impact of climate change and the means of reducing the effect. This study examined the impacts of climate change on cassava yield in Nigeria. Data were sourced from the Climate Change Knowledge Portal and the Food and Agricultural Organization of the United Nations spanning from 1990 to 2019. The impact of climate change was analyzed using Autoregressive Distributed Lag Bound approach, Error Correction Model and Augmented Dickey–Fuller and Phillips–Perron tests for stationarity test. The model was subjected to diagnostic tests such as stability tests, normality tests, serial correlation tests and heteroscedasticity tests. With the exception of temperature, the study revealed that arable land, rainfall and greenhouse gases such as C2O, nitrous oxide and methane had a long-term significant impact on cassava yield in Nigeria. The study also noted that methane causes long-term significant damage to cassava yield more than any other greenhouse gas and climatic variables in the study. We recommended policies and programs that facilitate the uptake of climate-smart agriculture that centers on greenhouse gas emission reduction and on crop improvement research by breeding crop varieties that will be resilient to climate shocks.

Impact of Bank Specific and Macro-Economic Factors on Financial Performance of Commercial Banks in Afghanistan

This study was carried out to examine the effects of bank-specific factors and macroeconomics on the financial viability of commercial banks in Afghanistan. The ten banking institutions' panel data sets for the years 2010–2021 were used. A random Effect model of regression was applied. The model of random effects was recommended when the Hausman test was employed to confirm the models' fitness. The null hypotheses were also rejected based on the results of the Wooldridge test for serial correlation and the modified Wald test for group-wise heteroscedasticity. The findings of current research revealed that bank determinants, specifically liquidity and asset management, showed a positive but slight effect on bank profits, while deposit ratio, bank number of branches, and ATMs showed a negative influence. Regarding macroeconomic factors, the outcomes indicated that the influence of the GDP, exchange rate, and inflation rate on bank profitability was negative, while the interest rate, taxes, and industry growth rate had a positive and significant impact on bank profitability. Additionally, by highlighting weak points, the study's findings will assist the management of banks, financiers, the government, policymakers, and shareholders in taking better decisions and enhancing bank performance. Overall, decision-makers need to be better knowledgeable about the factors that affect the profitability of Afghan commercial banks.

Impact of Bank Specific and Macro-Economic Factors on Financial Performance of Commercial Banks in Afghanistan

This study was carried out to examine the effects of bank-specific factors and macroeconomics on the financial viability of commercial banks in Afghanistan. The ten banking institutions' panel data sets for the years 2010–2021 were used. A random Effect model of regression was applied. The model of random effects was recommended when the Hausman test was employed to confirm the models' fitness. The null hypotheses were also rejected based on the results of the Wooldridge test for serial correlation and the modified Wald test for group-wise heteroscedasticity. The findings of current research revealed that bank determinants, specifically liquidity and asset management, showed a positive but slight effect on bank profits, while deposit ratio, bank number of branches, and ATMs showed a negative influence. Regarding macroeconomic factors, the outcomes indicated that the influence of the GDP, exchange rate, and inflation rate on bank profitability was negative, while the interest rate, taxes, and industry growth rate had a positive and significant impact on bank profitability. Additionally, by highlighting weak points, the study's findings will assist the management of banks, financiers, the government, policymakers, and shareholders in taking better decisions and enhancing bank performance. Overall, decision-makers need to be better knowledgeable about the factors that affect the profitability of Afghan commercial banks.

The Random Walk Model in the Pakistani Equity Market: An Examination

This paper examines the validity of the Random Walk Model in the Pakistani equity market. The model, extensively tested in other equity markets, implies that past movements in a stock price are not helpful in predicting future prices of that stock. The model states that changes in stock prices are serially independent and conform to some probability distribution. Conventionally, the independence part is examined through Serial Correlation Test, whereas the distributional aspect is analysed through Frequency Distributions. Same techniques are applied in this paper on daily closing prices of 36 individual stocks, 8 sector indices, and a market index from January 1, 1989 to December 30, 1993. The analysis indicates that the Random Walk Model is not valid in the Pakistani equity market as is the case in other emerging markets. The results show the presence of strong serial dependence in stock returns and indicate the slow adjustment of the market to new information. This points to the weaknesses of the market regarding the dissemination of pertinent information to potential investors, indicating that effective measures should be taken in this regard. The shape of the distribution reveals that stock returns in the Pakistani market, like in other equity markets, do not comply with the normal distribution, implying that theoretical models must be used with caution.

Modeling COVID-19 Infected Cases and Deaths Based on Generalized Method of Moments

Abstract This paper investigates the dynamic relationships between the number of COVID-19 infected cases and deaths in all the districts of Karnataka state, India, from July 2020 to December 2021 based on the panel Generalized Method of Moments (GMM). The panel GMM model with the first difference transformation was found suitable for studying the dynamics of the number of deaths due to COVID-19 infections over time. The one-period lag (DEATHS (-1)) has a positive and significant effect on the number of deaths (DEATH). The Wald test confirms the validity of the coefficients' significance and adds explanatory power to the model. The correlation between number of fatalities at time t positively correlated with the number of deaths in the previous period. Also, the number of infected cases positively and significantly influences the number of deaths over time. Granger pairwise causality test reveals the existence of bi-directional causality relationships between the COVID-19 infected cases and deaths. JEL classification numbers: E18, HO, I1, J64, J88. Keywords: Arellano-Bond serial correlation test, Cross-sectional dependence test, Cointegration test, Granger causality test, Generalized Method of Moments, Kao cointegration test, Hausman test, Levin-Lin-Chu unit root test, Wald test.