• Title/Summary/Keyword: Hausman test

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Trade Effect Analysis of Korea.ASEAN FTA using a Panel Analysis (패널분석을 이용한 한.ASEAN FTA의 교역효과 분석)

  • Son, Yongjung;Kim, Hyunduk
    • Journal of Korea Port Economic Association
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    • v.29 no.3
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    • pp.95-111
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    • 2013
  • The purpose of this study is to draw out the trade effect of the Korea ASEAN FTA by carrying out a panel analysis. For achieving such a purpose, Panel Unit Root, Panel Cointegration Test, Pooled OLS, Hausman Test, Fixed Effect, Random effect are performed. The last 15 years's data over the period of 1997 to 2011 concentrated on the ASEAN countries such as Indonesia, Malaysia, Philippine, Singapore, Thai, Vietnam is used in this study. Major implications are summarized as following. First, our government need to maximize the effect derived from conclusion of FTA(Free Trade Agreement) in order to enhance the competitive edge through obtaining a stable foreign market. Second, it necessary for our government to improve a national system by orienting a FTA conclusion complying with WTO's product and service-related regulation.

Economic Growth, Financial Development, and Trade Openness of Leading Countries in ASEAN

  • HO, Chi H.P.;PHAM, Nhan N.T.;NGUYEN, Kiet T.
    • The Journal of Asian Finance, Economics and Business
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    • v.8 no.3
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    • pp.191-199
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    • 2021
  • The study examines the causal relationship between financial development and economic growth through trade openness for the leading ASEAN countries (Indonesia, the Philippines, Malaysia, Singapore, Thailand, and Vietnam). The study employs a panel data for the period of 25 years spanning from 1995 to 2015 for the six countries, yielding a balanced panel of 150 observations. Fixed effect model (FEM) and random effect model (REM) are used for the panel data, following the Hausman test performed for model selection. The trivariate Granger causality test is also used to check for possible relationship between the variables. The results show that REM is chosen based on the Hausman test result, suggesting that the trade openness has a positive association with growth whereas the financial development is positively, but insignificantly associated with growth. The reason for this is that the financial development and economic growth may be related to each other. The results are, then, further explored and confirmed by the causality test. That is, the financial development and the economic growth, through the trade openness, are found to have bidirectional positive relationships. This implies that there would be shortcomings when ignoring the presence of trade openness, which positively impacts the relationship between finance and growth.

A Study on the Determinant of Korean Fisheries Export to ASEAN (한국의 대ASEAN 수산물 수출결정요인에 관한 연구)

  • Lin, Xuemei;Kim, Ki-Soo
    • The Journal of Fisheries Business Administration
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    • v.47 no.2
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    • pp.15-32
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    • 2016
  • The Association of Southeast Asian Nations(ASEAN) has been the most essential organization in Asia. In spite of the world economic crisis, Southeast Asian countries have shown fast economic growth since 2000, and they have been actively expanding investments and trades especially with major countries. Research on competitiveness in ASEAN market has spawned an increasingly large literature, but empirical research on the determinants of Korea's export to ASEAN is limited. The purpose of this study is to draw out the determinant of Korean fisheries export to ASEAN by carrying out a panel analysis. For achieving such a purpose, pooled OLS, Hausman Test, Fixed Effect, Random Effect are performed. The last 20 years' data over the period of 1995 to 2014 concentrated on the ASEAN 6 countries such as Indonesia, Malaysia, Philippine, Singapore, Thailand, Vietnam is used in this study. Amount of aquatic products export to ASEAN is used as the dependent variable; real exchange rate, real GDP, relative price level and GDP per capita are used as the explanatory variables and FTA as dummy variable. Empirical results show that fixed-effect analysis is the best model among all the models. As the fixed effect model shows, real exchange rate, real GDP, GDP per capita and dummy variable(FTA) play positive and statistically significant roles in fisheries export to ASEAN, while price variable plays a negative and statistically significant role to the dependent variable.

Simultaneous Equations and Endogeneity in Corporate Finance: The Linkage between Institutional Ownership and Corporate Financial Performance

  • MALIK, Qaisar Ali;HUSSAIN, Shahzad;ULLAH, Naeem;WAHEED, Abdul;NAEEM, Muhammad;MANSOOR, Muhammad
    • The Journal of Asian Finance, Economics and Business
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    • v.8 no.3
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    • pp.69-77
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    • 2021
  • The objective of this research is to explore the inconclusive theoretical and empirical association between institutional ownership and firm performance in the context of emerging Pakistani economy. The data set consists of all the non-financial firms listed on the Pakistan Stock Exchange (PSX). Annual data set covers the period ranging from 2010 to 2015. However, the econometric analysis does not include those firms with incomplete data. Thus the final data set comprised of an unbalanced panel of sample of 276 firms with 1231 firms years observations. Data related to the institutional ownership and other variables taken for the study were extracted through the annual financial reports of the firms. The research used Tobin's Q as a proxy of market measure of firm performance and tested the endogenous relation with institutional ownership through OLS and 2SLS approach. The study also applied Durbin-Wu-Hausman test to determine the endogeneity before analyzing the 2SLS model. The Durbin-Wu-Hausman Test (DWH) conform the endogenous link between institutional ownership and performance and vice versa. The results derived from 2SLS also confirm a highly significant relationship and two way direct proportional relationships between the institutional investment and corporate performance in the studied companies.

Macroeconomic and Bank-Specific Variables and the Liquidity of Jordanian Commercial Banks

  • AL-QUDAH, Ali Mustafa
    • The Journal of Asian Finance, Economics and Business
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    • v.7 no.12
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    • pp.85-93
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    • 2020
  • This study aimed to explore the impact of macroeconomic (Real GDP growth (GDPG), Inflation rate (INF)) and bank -specific variables (profitability (ROA), capital adequacy (CADEQ), non-performing loans (NPL), deposit growth (DEPG)) on the liquidity (lIQ) of 13 listed Jordanian commercial banks for the period 2011-2018. Panel data analysis, Pooled least square, fixed effects model and random effects model, Lagrange multiplier test, and Hausman test were used. The random effects model output shows that, macroeconomic variables have a significant impact on Jordanian commercial banks liquidity since inflation has a positive impact while GDPG has a negative impact on banks (LIQ). On the other hand among the bank-specific variables capital adequacy and deposit growth have a positive significant impact on banks (LIQ), while (NPL) and (SIZE) have a negative significant impact on Jordanian commercial banks liquidity. But ROA has a negative insignificant impact on (LIQ). The findings of the study suggest that commercial banks departments need to pay attention to the economic and internal variables of banks in order to maintain acceptable levels of liquidity.

The Impact of Executive Compensation, Ownership, and Capital Requirement on Earning Management: Evidence from Indonesia Banking Companies

  • HUSNI, Tafdil;RAHIM, Rida;WIRANDA, Nadya Ade;D, Rizki Fadhel
    • The Journal of Asian Finance, Economics and Business
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    • v.8 no.6
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    • pp.849-858
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    • 2021
  • Earnings management is the use of accounting techniques to produce financial statements that present an overly positive view of a company's business activities and financial position. This study aims to find out the impact of executive cash compensation, ownership, and capital requirement (CR) on earnings management in Indonesian banks. This study uses panel data from banks whose shares are listed on the Indonesia Stock Exchange for 2013-2019 involving 30 banks with a total of 210 observations. Data was analyzed using the least square random impact regression and the Hausman test. The results showed executive cash compensation had a positive impact on discretionary accruals. Then, institutional ownership has a negative impact and CR had a positive impact on discretionary accruals. The findings in this research highlight that institutional ownership can reduce the level of discretionary accruals, but not managerial ownership. As a practical contribution, this finding proves the executive cash compensation can lead to earnings management. Thus, this research is useful in banks' decision-making regarding the treatment of executive cash compensation to CEOs or directors, especially for banks with most institutional ownership. This finding is also useful for regulators in determining the minimum limit of capital requirement ratio to minimize unhealthy or problematic banks.

The Role of Corporate Social Responsibility and Sharia Compliance on Islamic Banks Performance in Indonesia and Malaysia

  • SISWANTI, Indra;SHARIF, Sabri Mohammad;INDRAJAYA, Sonny
    • The Journal of Asian Finance, Economics and Business
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    • v.8 no.6
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    • pp.983-992
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    • 2021
  • This study aims to analyze the role of corporate social responsibility (CSR) as the moderation effect of sharia compliance on Islamic banks performance in Indonesia and Malaysia. The population in this study consists of 14 Islamic banks in Indonesia, and 17 local Islamic banks in Malaysia. The sample used in this study are the big five Islamic banks in Indonesia and Malaysia during the period from 2015 to 2019. This research used panel data regression with Eviews 10 software. From results of the Chow test, the model selected is fixed-effects, and from the Hausman test, the model selected is fixed-effects as well. The findings show the same results for both Islamic banks in Indonesia and Malaysia; the profit-sharing ratio has a significant effect on the financial performance of Islamic banks in Indonesia. Islamic income ratio has a significant effect on the financial performance of Islamic banks. Corporate social responsibility has a moderating effect of profitsharing ratio on the financial performance of Islamic banks. And corporate social responsibility has a moderating effect of Islamic income ratio on the financial performance of Islamic banks. Corporate social responsibility can strengthen the effect of sharia compliance on the financial performance of Islamic banks in Indonesia and Malaysia.

Dynamic Linkages Between Profitability and Its Determinants: Empirical Evidence from Jordanian Commercial Banks

  • BEKHET, Hussain A.;ALSMADI, Ahmad Mohammad;KHUDARI, Mohamed
    • The Journal of Asian Finance, Economics and Business
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    • v.8 no.6
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    • pp.687-700
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    • 2021
  • This paper employed the panel Unit root tests, co-integration, and panel Autoregressive Distributed Lag (ARDL) model to examine the link between banks' profitability and its determinants for 13 Jordanian commercial banks between 2000 and 2018. Pooled mean group (PMG) and dynamic fixed effect (DFE) models were applied. Hausman test result confirmed that DFE was preferred to PMG. The results confirmed the existence of a long-run equilibrium relationship between commercial banks' profitability and their determinants. In the short-run, banks' profitability in Jordan is positively related to return volatility. However, this is negatively related to credit risk and market concentration. In the long run, profitability is positively related to credit risk and negatively related to operational risk, bank size, stock market volatility, and market concentration. Credit risk and capital have bi-direction causality with banks' profitability, while GDP and market concentration have uni-direction causality. At present, the Jordanian economy during the Covid-19 pandemic triggered the banking sector's impact on the economy as the sector contributed to 20.8% GDP in 2019. The findings can help stakeholders such as bank managers, investors, shareholders, and policymakers make better decisions on banks' performance, thereby contributing to their economies.

Do Roads Enhance Regional Trade? Evidence Based on China's Provincial Data

  • RAHMAN, Imran Ur;SHARMA, Buddhi Prasad;FETUU, Enitilina;YOUSAF, Muhammad
    • The Journal of Asian Finance, Economics and Business
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    • v.7 no.12
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    • pp.657-664
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    • 2020
  • We investigate the impact of roads and highways within the provinces on the regional trade of China using the augmented Gravity Model and theory of modeling trade. We take a panel data covering 31 provinces of China over 20 years period (1998-2017) for the estimations. We apply ARMA-OLS model, fixed and random effects, and robust findings by Hausman test. The results imply that road and highway lengths within the provinces have a significantly positive impact on the value of the province-wise exports. The positive impact is due to the fact the increased coverage of roads and highways increase accessibility to resources and mobility of goods and services within the regions. Moreover, employment in the transportation sector, per capita GDP and population of the provinces also illustrate positive and significant influence on regional exports and trade. The impact of China's WTO accession on regional exports has been positive, while the financial crisis has had a negative impact. The year dummies show that, in the years following the financial crisis, China was able to regress from the external shock as trade within the provinces increased. The increase in exports after financial crisis is mainly due to the government policies and support to every province.

An Analysis on Economies of Scale for Tuna Distant Longline Fishery Using a Translog Cost Function (트랜스로그 비용함수를 이용한 참치연승어업 규모의 경제성 분석)

  • Cho, Hoon-Seok;Nam, Jong-Oh
    • The Journal of Fisheries Business Administration
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    • v.51 no.3
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    • pp.17-31
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    • 2020
  • The purpose of this study is to identify economic situation on scale of tuna distant longline fishery by analyzing its economies of scale using the cost function. To analyze its economics of scale, the deep-sea fishing statistics were used from 2012 to 2016. In detail, the number of panels for estimating the cost function was 68 tuna distant longline vessels from 2012 to 2016, and the total number of observations over the five years were 340. As a final model, the two-way fixed effect model based on the translog cost function was adopted through the F test, the Breusch-Pagan test and the Hausman test. As a result of the analysis, it was found that tuna distant longline fishery between 2012 and 2014 was diseconomies of scale, the fishery between 2015 and 2016 was economies of scale. However, the economic indicators of the scale from 2012 to 2016 were almost close to zero, indicating that the constant returns to scale, the optimal scale, were reached. Therefore, in the situation where the amount of fishery resources in the world continues to decrease, it is necessary to prepare a method to obtain economic benefits through scale maintenance and reduction rather than indiscriminate scale expansion.