Impact of the Yield Spread on Economic Contraction in Pakistan: An Adverse Relationship

The yield spread has a positive association with future economic expansion, up to a certain extent. An inverted yield curve is recognized as a potential indicator of economic contraction. This study aims to examine the impact of the yield spread, calculated as the difference between the weighted average rates of return on 5-year deposits and the 3-month rates of return, on the economy of Pakistan. To measure the contraction and expansion probabilities, Hamilton's (1989) Markov switching model is used. Afterwards, the impact of yield spread on economic contraction is analyzed by applying the ARDL bounds testing approach, based on 40 years of data ranging from 1980 to 2020. The findings indicate a positive association among the yield spread and the probability of contraction. Therefore, this study suggests that whenever there is an increase in yield spread, economic contraction rather than growth is expected. Whereas, control variables such as migration and foreign direct investment (FDI) reduce the chances of economic contraction. On the contrary, an increase in the price level increases its probability

Pakistan’s Trade Policies, Non-Tariff Measures and Concerns Of Stakeholders

Pakistan can increase its exports by 12 billion dollars till 2024 if integration with international market is improved, and strong linkages are developed among value chains (ITC, 2020). But this potential development is facing impediments due to transparency issues, imposition of non-tariff measures, ambiguous regulations at home and lack of information among both importers and exporters. This paper is dedicated to the discussion of Pakistan’s trade policies, tariff structure, rules governing non-tariff measures, and discussion about the concerns of business community and other stakeholders on NTMs. Application of NTMs in Pakistan, and their shortcomings are also discussed in detail. Then based on these discussions some recommendations are forwarded. Study shows that most of the hurdles faced by traders are home borne. If regulations are made easier at home and mutual recognition of standards is acquired with partner countries, then across the border trade can become much easier

Unraveling the Mystery of Default Prediction: A Study on the Textile Industry in Pakistan

Default events are inevitable in any economy and can have a considerable impact on economic stability. However, predicting defaults before occurrence has always been a challenging task for researchers around the world. In Pakistan, the textile industry experiences a high rate of default, which motivated us to conduct a study on predicting default in this sector. We analyzed data from 134 listed companies in the textile industry between 2000 and 2020, and segregated the industry into three sub-sectors (Composite, Spinning and Weaving with Textile Associated Products) for better analysis. After reviewing the literature, we identified five widely-used default prediction models which led us to perform a comparative study to validate their performance. Findings revealed that Grover’s G-Score Model was the best predictor of default, followed by Springate’s S-Score Model based on both model accuracy and model validation. However, it is important to note that our study is limited to the textile sector and future studies could include other sectors and more advanced methods to improve accuracy. This study can be useful for investors and financial analysts in assessing the risk of default in the textile industry and making informed investment decisions

Is this a reality? Occupational stress impacts on Employee Turnover Intention mediated by Democratic Leadership

Abstract: Purpose – Human Resource is an essential asset of any organization. Competent pool of employees imparts their potential for the success and sustainability of the organization but the democracy which prevail in some organizations render the potential of employees and employees suffered stress and anxiety which ultimately lead them towards quitting their jobs. Design/methodology/approach – Self-administered, and online method for surveying was used the gathering of data of the Pakistani banking sector. The data were collected from the 315 respondents. 400 questionnaires were distributed but get back only 315 responses for analysis. Findings – The structural model of Smart PLS and construct reliability and validity model were used which inclined towards the significant relationship between the variables. Results show that occupational stress and democratic leadership have contingent effect on the employee turnover intention. Practical Implications – organizations should eradicate the occupational stress on employees. They should develop the self confidence among the employees. Democracy should be minimized, and employees should be rewarded according to their performance not favoritism. These practices can eliminate the turnover intentions from the mind of employees. Originality/Value – This study suggests that Occupational stress is the important factors that influence directly on the Employee Turnover Intention and Democratic Leadership also mediated the effect of Occupational stress and Employee turnover intention

Examining the Relationship between Relational e-HRM and Organizational Performance: A Study of the Banks of Lahore during the COVID-19 Pandemic

The current study empirically investigated the implementation of relational e-HRM practices in banks and examined their relationship with the overall organizational performance of the banks in Lahore during COVID-19 pandemic. It also highlighted the issues that managers face during the implementation of relational e-HRM practices. The mixed method approach was adopted to conduct this cross-sectional study. Commercial banks with their head offices in Lahore were chosen and 171 branches were selected randomly. The purposive sampling technique was used to collect qualitative data and semi-structured interviews of sixteen (16) branch managers were carried out online. Qualitative data was analyzed thematically while covariance-based structural equation modeling (CB-SEM) was used to understand the effect of e-HRM practices on organizational performance. Most of the banks were found to have implemented all the relational e-HRM practices except e-selection which was implemented only in two branches. Relational e-HRM practices showed a positive effect on the overall performance of banks during COVID-19 pandemic. Centralized decision- making, limited autonomy of bank branches, presence of senior, computer illiterate employees, and inadequate financial resources were found to obstruct the implementation of e-HRM practices. The current research added to the e-HRM literature and examined the association between relational e-HRM practices and overall organizational performance in the context of banks operating in Lahore which apparently was never done before. Only the top commercial banks operating in Lahore, one of the largest metropolitans in Pakistan, were included in this study. The generalizability of findings may be enhanced with further studies

Influence of Coopetition on Firm Financial Performance: Mediating Role of Open Innovation Performance

It is essential for a firm to take advantage of the rising phenomenon of coopetition across multiple firms and marketplaces in today's highly competitive climate to enhance its financial performance. Hence, this study contributes to the existing body of literature by probing the link between coopetition and the success of open innovation initiatives in Pakistani SMEs. The failure of Pakistani SMEs to establish a controlled method of coopetition has had a deleterious effect on financial performance. The current research is conducted to identify the low open innovation problem in Pakistani small and medium enterprises (SMEs), which has a negative effect on financial performance. It aims to investigate the impact of coopetition on financial performance and the mediating function of the firm’s open innovation performance in it. To achieve this objective, a survey employing a cross-sectional research design was conducted. The respondents were selected from SMEs operating in the service sector in the cities of Bahawalpur, Multan, and Lodhran in Pakistan. A total of 155 questionnaires were distributed among managerial employees of the above SMEs. The data collected from the responses to the questionnaires was analyzed through Partial Least Square-Structure Equation Modeling (PLS-SEM). It was found that coopetition has a strong role in boosting financial performance. The importance of trust and dependence in crafting an effective coopetition strategy is also emphasized in this research

How Core Labor Standard and Informal Sector Employment Effect the Economic Growth?

At present time, the phenomenon of core labor standards and informal sector employment entice attention in the economic growth paradigm. This study elaborates the influence of core labor standards on the economic growth of Pakistan in the presence of informal sector employment. For this purpose, the human capital augmented solow growth model proposed by (Mankiw et al. 1992) is extended by adding core labor standards and informal employment. The aggregate time series data set is used for the time span (1999-2017). To resolve the endogeneity problem, the non- linear two stage least square instrumental variable (NLTSLS-IV) approach is applied to estimate the growth model. The estimated outcome elaborates the positive relation of core labor standards with the economic growth. The relation between the growth rate of both formal and informal employment is positive with economic growth. The conclusion is that the enforcement of core labor standards increase the economic productivity through protecting workers rights and will ultimately enhances the economic growth. The policy maker should consider the phenomenon of labor standards enforcement in the growth policies of the economy

Trends in Earning Management (EM) Practices: A Cross Country and Industrial Analysis

This paper analyzes the trends in earnings management (EM) practices of 500 non-financial firms across 8 major industries operating in both developing and developed economies for the period 2008-2017. It significantly contributes to the literature by identifying the country-specific, industry-specific, and over the time trends in accrual and real earnings management practices prevailing in the non-financial sector of both developed and developing economies of the world. EM trends are analyzed across countries, across industries, and over the sample period. The sample consists of 500 non-financial firms from 8 different industries of 22 developed and developing economies for the period 2007-2018. Accrual and real earnings management are alternatively used in the non-financial sector across the world. This study uses the Modified Jones Model (Dechow et al., 1996) and the Roychowdhury model (2006) to estimate accrual and real earnings management. The analysis of variance (ANOVA) is used to examine the mean differences between countries and industries as well as over the time differences. The country-wise analysis concludes that Pakistan is on the top of the list in managing earnings followed by Canada, particularly in accrual-based earnings management. It may be attributed to poor accounting standards and regulatory frameworks. The industry-wise analysis shows that the mining industry, characterized by high dependency on capital markets and the uncertainty associated with the prospects of mineral reserves, is highly involved in EM. Finally, the year-wise analysis determines that the year 2009 was highly escorted with accrual and real earnings management practices, which may be the result of the global financial crisis of 2007-2008. The findings imply that the policymakers of developing economies should strongly emphasize improving the general macroeconomic environment of the economy by controlling inflation, improving law and order conditions, and ensuring political stability. Additionally, the findings have potential implications for corporate managers while formulating strategies to restrict them from EM that may diminish both firm value and the economy

Time-frequency Volatility Spillovers of Conventional Stock Markets: Evidence from Developed, Emerging, and Frontier Markets

This study examines the volatility spillovers and financial connectedness of conventional equity stock markets in developed, emerging, and frontier economies in GCC, SAARC, BRIC, and G7. Diebold and Yilmaz (DY-12) and Baruník and Krehlík (BK-18) spillover methods are used to analyze the daily data for the period 2012-2021. The findings indicate that the coronavirus pandemic significantly affected return and volatilities in conventional stock markets, surpassing any previous economic instability event, such as the 2014-2015 crude oil crisis. The findings also reveal that conventional stock markets are weakly interconnected in terms of overall return, with the US stock market being the top transmitter of returns and volatility. These findings have significant policy implications for investors, regulators, and policymakers

Impact of Supply Chain Integration on Supply Chain Performance: Moderating Role of Supply Chain Flexibility.

Modern world is more uncertain than ever before. Organizations need to identify the capabilities needed to gain competitive advantage under these uncertain conditions. Supply chain integration is such a capability that may help a firm achieve competitive advantage under uncertain market conditions. The current study evaluated the multidimensional role of supply chain integration in supply chain performance. The moderating role of supply chain flexibility between different dimensions of supply chain integration and supply chain performance was also considered. Based on the data gathered from Pakistani manufacturing firms, structural equation modeling (SEM) was used to test the hypothesized model. The results showed that internal integration and supplier integration represented a positive impact on supply chain performance. However, the moderating role of supply chain flexibility was determined to be significant only in the case of customer integration – supply chain performance relationship.  &nbsp