Stock Returns Indicators: Debt to Equity, Book to Market, Firm Size and Sales to Price

Financial variables are useful indicator for future stock returns. In the USA market during the period of 1963-90 the book to market value and firm size have more explanatory power for future stock returns. But some studies argue that sales to price ratio and debt to equity explain future stock returns better than the book to market value and firm size.  The main objective of this study is to see which financial variable explains stock returns better than the others. In this study the four financial variables debt to equity, book to market value of equity, firm size and sale to price are used. The study includes   26 companies from pharmaceutical and chemical sector in Pakistan and listed on the Karachi Stock Exchange. The regression technique is used to see the relationship between stock returns and financial variables. We find that the best indicator for stock returns in Pakistani stock market is book to market value of equity for the studied period 2000-2009

The Evolution of Financial Innovation and Challenges for Small and Medium Enterprises: A Case Study from South Asian Economies

Deprived of reluctance, SME sector has developed the considerable thump of constant, rapid and dynamic growth of South Asian Economies. Furthermore, serve as breeding ground for young entrepreneurs and sheltered the unemployed laborer force by providing them working opportunities. Beside all these facts, due to globalization the Small and medium-sized enterprises fronting incredible variation and concentrated competition. Thus, this research study primarily consists of analyzing the sources of financ avilable for Small and medium firms along with financing challenges confronted by small business traders with the objectives to exploit the innovative ways to improve financing streams for Small and medium enterprises in South Asian Countries. For accomplish this purpose, four major South Asian Countries, India, Pakistan, Bangladesh and Sri lanka have been selected to analysis the growth of SMEs sector with the viewpoint of financial constrained and innovative financial provisions. This Study comprises of qualitative examination of secondary data gather from central banks of the respective countries along with SMEs development authorities in the country.This study suggest that the innovative entrepreneurs should be encouraged by government and financial institutions through the innovative technological education and financial literacy training programs. Moreover, the collaboration between Academia and researchers with innovative entrepreneurs are essential for growth of SMEs sector in the country because they provide referral and laboratory services to SMEs to promote innovation. Beside this, the need of establish business incubation centers are prerequisite in academia. The universities should have set up business centers with collaboration of SMEDA and Financial institutions to promote young entrepreneurs and enhance their business skills. Keywords: Financial Innovation, Entrepreneurs, Small and Medium-Sized Enterprises

FDI’s Role in Emerging Economies

This paper reviews the role of foreign direct investments in emerging market economies. The paper also exposes the merits and demerits of FDIs in emerging economies in order to understand the inflow and outflow of FDIs around the world and exhibit the global trend of FDIs. Many multinational firms have invested in emerging economies due to their attractive geographical location and cost minimizing factors including low wages, large market and growth opportunity. China, India and Brazil are the most attractive location for FDIs inflow in the world due to these factors. Some of the factors that discourage the foreign investors from investing in any country are the adverse law and order situation and lack of infrastructure. All those emerging economies that have no political and terrorism issues are flourishing because they have been able to attract major chunk of FDI which is playing vital role in strengthening economy due to capital inflows and currency appreciation. The paper conclude that FDIs have significant impact on the economies of different countries although there are certain unfavorable impacts of FDIs in the emerging economies but all in all the positive impacts are far more beneficial than the negative ones. Keywords: FDI, Emerging Economies, Economic prosperity, BRIC

The Role of Society in Nurturing Entrepreneurs in Pakistan

Understanding about the role society should play in nurturing and grooming of risk seekers is critical for every society in order to produce better entrepreneur and increase the prospects socio-economic uplift. The economic strength of a society stands on the number of risk seekers breathe in it. A nation is likely to remain rearward not because of scarcity of infrastructure or drought of natural resources, but because of the absence of entrepreneurial skill to tap the buried resources existing with in that society. The purpose of this study is to investigate the causal relationship between nurturing of entrepreneurs (dependent variable) and the societal factors (independent variable) including role of education system, family support and, government policies. Keywords: Society, Pakistan, Risk, Entrepreneurs, Socio-Economic Suppor

TO BE RESPONSIBLE SOCIALLY IS VIABLE FINANCIALLY

This paper aims to evaluate the impact of Corporate Social Responsibility (CSR) on Company’s Financial Performance (CFP) operating or based in Pakistan. Emerging CSR practices in the developed world have raised question about the inclination of the developing world towards CSR. Pakistan being a developing country, its corporate sector is more concerned about profit maximization than CSR. Various studies around the globe have established that CSR has a positive impact on the financial performance of a company. In this study, secondary data has been used from audited annual reports of 26 companies listed in KSE of similar size from different sectors, which are striving towards better CSR. The data ranges from 2008 to 2012 (5 years). The researchers have used Stakeholder theory to measure CSR; stakeholders include Government, Employees, Suppliers, Creditors, Shareholders and Customers. Return on Asset (ROA) was used as a surrogate for Company’s financial performance (CFP). The result of Multiple Regression Model showed a significant impact of CSR on CFP for only a few stakeholders. After adjusting the model according to Pakistan’s scenario, customers, shareholders and creditors were identified as the key stakeholders for CSR to have an impact on CFP. Analyses also bifurcated the results for KSE 100 index companies and Non KSE 100 index companies in order to have an idea as to how firm size disparity affects CSR’s impact on CFP. The outcomes of the research would be helpful for the corporate decision makers, government policy formulators and other related quarters to understand the impact of CSR on CFP with reference to Pakistan

WORKING CAPITAL MANAGEMENT AND PROFITABILITY CASE OF PAKISTANI SUGAR FIRMS LISTED IN KARACHI STOCK EXCHANGE

The success or failure of an organization depends on the effective management of working capital as it directly affects the liquidity and profitability of any organizations. Working capital is required to meet the daily expenditures to run the business operations smoothly. The main purpose of the study is to investigate the impact of working capital components on sugar firms profitability listed in Karachi Stock Exchange (KSE) for a period of 7 years. In order to examine the relationship gross operating profit is taken as dependent variable and receivable conversion period, inventory holding period and account payable conversion period consider as independent variable. The secondary data for the period of 2008 to 2014 was taken from the annual financial statements of sugar firms. The regression and correlation analysis were used and it is based on a panel sample of 20 sugar firms. The results show that elements of working capital i.e. number of days account receivable turnover, number of days inventory turnover and number of days account payable turnover has negative impact on profitability of sugar firms. Therefore the finance management team can increase the value of share holder by managing perfectly each component of working capital

Global Financial Meltdown – Systematic Literature Review A Qualitative Research Study

Global Financial Meltdown was a major economic crisis in the recent past. It had devastating effects throughout the world. A clear understanding of the global financial meltdown is very necessary as it raised lots of concerns on the contemporary financial system. The complexity of this crisis event demands a detailed descriptive analysis for its understanding, which cannot be captured through a mere quantitative study. We have to see this economic crisis from various perspectives and angles, for which systematic literature review approach is used in this study and the global financial crisis is taken as an intrinsic case. Taking different perspectives of various researchers, thinkers and intelligentsia will also help in driving out an unbiased and factual view of these crises.The financial meltdown started from subprime crises. Financial derivatives and securitization were the main elements of the subprime mortgage. Financial derivatives are innovative financial products, whereas securitization is the process of converting mortgage loans into tradable securities. The unprecedented volume of derivatives trade and multiple cycles of securitization within a short span of time caused subprime crises in the USA. Since lots of financial institutions from various parts of the world have stakes in subprime mortgages, therefore resonance of subprime crises traveled across the globe. The shrinkage of profits forced financial institutions for rapid divestitures of investment from stock markets, which caused a dramatic drop in indices. This scenario destabilized numerous companies and dire effects of financial sector spilled over to other economic sectors in the various economies of the world

Customer satisfaction & loyalty and organizational complaint handling: economic aspects of business operation of airline industry

The undertaken study examines economic aspects of business operations of the airline industry vis-à-vis organizational complaint handling and customer loyalty. For this purpose, we used a structured questionnaire to collect sample data of 200 respondents from university students and households of Pakistan who are the customers of the airline industry. We employed five independent variables, namely, response time, complaint resolution perfection, executives’ attitude, brand image and responsiveness to complaints. We used the descriptive analysis and SEM-based approaches; namely, confirmatory and exploratory factor analysis for estimation purposes. The findings of the undertaken study demonstrated that the resolution of complaints, timely response, and responsiveness to complaints had a significant and positive influence on satisfaction of customers and loyalty of clients using international airline services, and this leads to the economic prospects of business operation in the airline industry. However, customer relationship, executives’ attitude and brand loyalty do not have significant influence on the customer satisfaction and customer loyalty. Thus, it is concluded that the immediate response to customer complaint handling enhances the customer satisfaction and customer loyalty that increases the economic aspects of business operation in the airline industryVadybos katedraVytauto Didžiojo universiteta