Financial development and economic growth: a cointegration and error-correction modeling approach for south Asian countries

This paper assesses long-run causal relationship between financial development and economic growth for South Asian countries - India, Pakistan and Bangladesh for the period 1976 -2008. Financial development emanates from financial systems that encourage financial stability and foster a framework for the implementation of successful economic polices. Financial Systems can be divided into ‘bank-based'' and ‘capital-market-based'' categories. Bank-based financial systems are the close involvement of their banks with industrial firms; banks are the most important source of finance for industry. Capital-market-based financial systems are characterized by highly developed capital markets and banks. Bank-based financial systems may be in a good position to implement successfully expansionary monetary policy and industrial strategy. Financial liberalisation and repression may show a positive association between financial development and economic growth. We conduct cointegrated vector autoregressive model to assess long-run relationship between financial development and economic growth. Empirical results imply a stable relationship between financial development and economic growth for these countries. Results of error correction models indicate Granger causality between financial development and economic growth running from financial development to economic growth.Financial Development, Economic Growth, Cointegrated Vector Autoregressive Model, South Asian Countries.

The asymmetric effects of income and fuel price on air transport demand

Forecasts of passenger demand are an important parameter for aviation planners. Air transport demand models typically assume a perfectly reversible impact of the demand drivers. However, there are reasons to believe that the impacts of some of the demand drivers such as fuel price or income on air transport demand may not be perfectly reversible. Two types of imperfect reversibility, namely asymmetry and hysteresis, are possible. Asymmetry refers to the differences in the demand impacts of a rising price or income from that of a falling price or income. Hysteresis refers to the dependence of the impacts of changing price or income on previous history, especially on previous maximum price or income. We use US time series data and decompose each of fuel price and income into three component series to develop an econometric model for air transport demand that is capable of capturing the potential imperfectly reversible relationships and test for the presence or absence of reversibility. We find statistical evidence of asymmetry and hysteresis - for both, prices and income - in air transport demand. Implications for policy and practice are then discussed

A Comparative Study of Banking in China and India, Nonperforming Loans and the Level Playing Field

This paper compares the operative performances of the banking institutions in China and India, taking into account the contentious issue of institutional differences in banking sectors in these two economies, reflected in the generation of non-performing loans. The study also examines the issue of the use of banks to provide countervailable subsidies to exporting organizations. Our results show that the efficiency differences between banks in these two countries can be directly related to their institutional differences.Technical efficiency; Non-performing loans; Subsidies.

Understanding the mechanisms of phosphatidylserine exposure in sickle cells

Sickle cell disease (SCD) is the most common severe inherited disorder affecting millions of people worldwide. HbS polymerisation leads to a change in red blood cells’ (RBCs) membrane permeability, high phosphatidylserine (PS) exposure, altered RBC rheology and fragility. The high PS exposure is considered to cause some of the hallmark complications of the disease such as vascular occlusion, anaemia and inflammation. This study investigates the possible physiological and cellular signalling pathways involved in PS exposure in RBCs from SCD patients. In the first part, conditions specific to the renal medulla were examined as the majority of SCD patients suffer from nephropathy early in life. It is hypothesised that the ambient conditions of the renal medulla promote polymerisation of RBCs and PS exposure, and so contribute to the detrimental effects of SCD. Thus, the impact of the medullary environment, which is hypoxic, acidotic, hyperosmotic and hypertonic, on RBCs of SCD patients was investigated. In the second part of the thesis, intracellular signalling pathways which could cause high PS exposure were investigated. The study aimed to establish the molecular identity of Psickle and strengthen the link between Psickle and PS exposure. It was hypothesized that PIEZO1, a mechanosensitive ion channel, is a potential candidate for Psickle and a major channel for Ca2+ entry in RBCs. Thus, drugs acting on PIEZO1 such as Yoda1, Dooku1 and GsMTx4 were used to examine their effects on Ca2+ entry and PS exposure. The results from the first part of the thesis suggest that while the hypoxic, hyperosmotic and hypertonic environment have a substantial effect on sickling and PS exposure, the effect of pH is minimal. Furthermore, the experiments have also shown that urea inhibits both sickling and PS exposure (highly significantly in all the above conditions). Results from the second part of the thesis strongly suggest that PIEZO1 can be a major channel for Ca2+ entry leading to PS exposure, together with a Ca2+-independent pathway leading to PS exposure, which is reliant on protein kinase C (PKC). Furthermore, the sphingomyelinase (SMase) signalling pathway was also explored to identify its role in PS exposure. Results with a SMase inhibitor and ceramide on RBCs of SCD patients showed a strong correlation between SMase activity and PS exposure. Moreover, experiments revealed that urea inhibited SMase strongly and might be potentially working through this pathway to reduce PS exposure. These findings further increase our understanding of the conditions and mechanisms, which promote PS exposure and suggest potential future therapeutic targets

Customer satisfaction in business : A case study of Moon travel ltd

Today, competition among businesses has become increasingly intense and organizations realize that they cannot compete with each other solely on price, but need to focus on their valued customers. The purpose of this thesis was to measure the current level of the customer satisfaction in the case company as well as to better understand customers’ needs from the company’s point of view in order to improve customer service. Another purpose was to analyze the reasons and factors that might obstruct efforts to affect satisfaction levels. The theoretical section of the thesis concentrates on service, service quality and factors affecting the satisfaction level. At the beginning of the theory, elements of service are first discussed and then, the importance of customer satisfaction and measuring customer satisfaction is described. All the data for the theoretical section was collected from the literature. This research was accomplished using a quantitative research approach by means of a questionnaire and small interview conducted with the company owner. The questionnaire was divided into three parts, containing multiple choice questions and including an open question about customer feelings and opinions at the end. The questionnaire was distributed to the company over a period of one month. In conclusion, the research revealed that the current service level of Moon travel can be judged as positive and customers are very satisfied with the service they have received. However, several areas were found that need to be improved. In order to improve the level of customer satisfaction, it is recommended that the company should improve its’ service environment, implement staff training, and adjust the price of the service, as well as conducting regular advertising campaigns to attract new customers and to inform exiting customers about special offers and upcoming events

Diesel demand in the road freight sector in the UK: Estimates for different vehicle types

Demand elasticity for petrol or diesel is an important policy parameter, both from energy security and global warming perspective. Despite an abundance of literature on petrol demand, there are few studies on diesel demand, and even fewer on demand by different vehicle types. This paper aims to model diesel demand for different freight duty vehicle types (e.g. heavy vs. light goods vehicles and rigid vs. articulated trucks) in the UK. We argue that the switch to diesel from petrol engines in the light vehicles sectors could have biased earlier petrol or diesel demand elasticities in Europe, and show that it was indeed the case for the light goods vehicle sector. Results show that both light and heavy goods vehicles have similar income elasticities, although within the heavy duty sector, articulated trucks are more elastic than rigid trucks. Overall, heavy goods vehicles were responsive to fuel prices, but light goods vehicles were not. Within the heavy duty sector, rigid trucks showed statistically significant price elasticity, but articulated trucks did not respond to changes in fuel prices. Our results show that price-based policies to curb fuel consumption from the light or heavy goods vehicles are unlikely to be effective

Interconnectedness between Commodity Futures and Equity Markets during the Pre-and Post-Financialisation Eras

NO ABSTRAC

(Unintended) Transport impacts of an energy-environment policy: the case of CNG conversion of vehicles in Dhaka

Motor vehicles are one of the major sources of air pollution in Dhaka, the capital of Bangladesh. The government took various policies to convert the petroleum vehicles on road to run on compressed natural gas (CNG), which allows both air quality improvements and energy security benefits. One of the market friendly policies to encourage the fuel switch was to increase the price differential between CNG and petrol and diesel. This has allowed a wide-scale adoption of CNG as the fuel of choice. However, several years into the policy, there is now a widespread belief among the policymakers that the CNG conversion may have increased car ownership and car travel due to their lower running costs, resulting in more congestion and a reversal of the strategy is on the cards. It is therefore important to test the hypothesis whether CNG conversion had genuinely increased car ownership and car travel in Dhaka city. This paper presents the results of a questionnaire survey and an econometric intervention analysis to understand the impact of CNG conversion on car ownership and car travel in Dhaka. Attention is also given to disentangle the self-selection and price-induced travel effects of CNG conversion. Results show that ownership did not increase, but travel of on-road vehicles increased due to the CNG policy. However, additional congestion costs are still around one half of the health benefits brought about by the policy

Trade arrangements, productivity growth and firm level technical efficiency in textiles and clothing industries of Australia and Bangladesh 1972-1998

With inter-country differences in comparative advantage and the resultant perceived significance for product specialization, trade-based development strategies have become the key to ascending the development ladder. The role played by the textHes and clothing industries during the embryonic stages of such a process is enormous, but was Hmited through protective measures, such as the Multi Fibre Arrangement (MFA) adopted by the net importer developed economies. With the ongoing globalisation process under the auspices of the World Trade Organization (WTO), small players in the world market such as Australia and Bangladesh have been faced with severe policy questions. In view this, the impact of globalisation, microeconomic reform and firm-level responses have remained vastiy underinvestigated and this thesis is a novel attempt to bridge this knowledge-gap. Pubhc pohcy regimes and microeconomic reform in textiles industries have been examined and compared in the two economies with a third country, Thailand, chosen because of its intermediary development status, to facihtate comparative evaluation of performance of these industries. Dynamic comparative advantage and product hfe cycle hypothesis has been analysed with estimation of revealed comparative advantage (Balassa, 1965) for selected developed and developing economies. Subsectoral performance has been evaluated with productivity measured using both parametric and non-parametric techniques. Tornqvist\u27s (1936) non parametric superlative index with underlying flexible form translog function, as popularised by Diewert (1976,1978), has been used to index output, input and TFP growth for the three economies. Estimation of the Cobb-Douglas production function has revealed input elasticities, returns to scale and the rate of technical change. For firm level analysis of technical efficiency, a parametric measure of frontier function has been used based on the stochastic frontier approach developed by Aigner, Lovell and Schmidt (1977) and Meeusen and Van den Broeck (1977) with the parameterisation technique of the variances due to noise and inefficiency suggested by Battese and Corra (1977). Cobb-Douglas stochastic frontier production functions have been estimated in the error component model with alternative assumptions of half normal and truncated normal distributions of the inefficiency term for a cross section of Austrahan textiles and clothing firms in 1998 obtained from the Textiles, Clothing and Footwear (TCF) benchmarking database. To analyse factors determining variation in technical efficiency across firms, conventional two stage analysis that suffers from a contradictory distributional assumption of technical inefficienq\u27, where technical efficiencies are predicted first and then regressed against various firm specific factors has been substituted for single stage estimation following Battese and CoeUi (1993, 1995) where the inefficiency components are the fijnctions of a vector of firm specific factors (explanatory variables). Panel data for Austrahan and Bangladeshi firms was accommodated in this inefficiency effect model measuring Hicks neutral technical change and time varying technical efficiency over 1995 to 1998. Among other firm-specific characteristics such as age, size and ownership pattern, that were common to both Bangladesh and Austraha, additional variables such as export orientation (or openness), proportion of non-production to total workers, effective rates of assistance (ERA) and research and development (R&D) were included for Austrahan firms to capture the effects of recent microeconomic reforms. Based on predicted firm specific technical efficiency, measures of technical change, scale effects and technical efficiency was aggregated under non constant returns to scale to obtain TFP changes for each individual firm and for firms in various product categories. The major findings of this study are, (i) Developing economies have made great strides in achieving dynamic revealed comparative advantage in textiles trade over the last two decades. However, some developed economies also have made significant improvement in comparative advantage thereby engendering increased competitiveness among the trading nations. Bangladesh has a strong comparative advantage in clothing trade whereas Australia has improved but is yet to have a clear comparative advantage in clothing, (ii) Over rime, labour productivity growth has been strong in both the Thai and Austrahan industries while this has been only moderate in Bangladeshi clothing and low in its textiles industries. Evidence from factor proportions indicated that since the early 1970s, Austrahan industries became predominanriy more capital intensive as did Thailand, to certain extent, as opposed to Bangladesh where rising employment especially in the clothing industry reduced the pace of absorption of higher capital proportions, (iii) Despite export performance and a good trend rate of growth over the period, productivity growth has been slow m Austrahan and Bangladeshi industries in recent years. For Austraha the process was found to be energized by faUing ERA, as this indicated poUcy shifts, especiaUy for the clothing industries; (iv) The analysis at the firm level suggested that larger and more profitable Austrahan firms are technically more efficient than smaU and medium enterprises that had considerably lower efficiency. In Bangladesh, clothmg firms were found to be more efficient than the textile firms. (v) Analysis of composition of TFP revealed that technical efficiency changes sigmficandy contributed to the overall TFP of Austrahan and Bangladeshi firms with some contribution from scale effects and a neghgible impact of technical change, (vi) Empirical esthnates of the inefficiency effect model showed that several firm specific variables such as Age and Size had significant positive influence on technical efficiency of Australian textile firms. Further, significant negative influences on efficiency from capital intensit}\u27 were detected for Austrahan textile firms. Both textile and clothing firms in Austraha with higher proportion of non production to total workers were found to be significantiy less efficient and vice versa. Efficiency was found to be lower for older textile firms and higher for newer clothing firms in Bangladesh. Larger and privately owned textile firms in Bangladesh were found to be significantiy more technically efficient than the smaller firms and firms under government ownership. Several pohcy imphcations emanate from the findings of this study. It is evident that increased competitiveness has been the major consideration with the beginning of the Hberahzation process of the textiles trade and with there is considerable scope to reap the benefits of the fuUy integrated regime beyond 2005 if both Austraha and Bangladesh augment their comparative advantage based on high quahty and low cost processes, respectively. Adequate measures have to be taken to take care of the distressed productivity growth in both textiles and clothing industries in Austraha as evidenced from the mid 1980\u27s and in textiles industry in Bangladesh in recent years. There is enough scope to improve efficiency level of textiles firms in Bangladesh and small and medium textiles and clothing firms in Austraha, which would help the productive performance of these firms and industries. For technological improvement, care has to be taken to use existing technology more efficientiy for Austrahan firms while for Bangladesh there it could be recommended that older and obsolete plants be replaced by the newer ones. To ensure effective microeconomic reform, it is necessary that benefits be appropriately channelled to the individual producers with a stronger institutional base and transparency of pohcies and the pohcy variables such as the ERA revaluated. New and small firms need to be assisted in Austraha and excess non production workers have to be identified and curtailed. For Bangladesh, adequate technical assistance to older textiles firms have to be accorded and to the new entrants in the clothing industry^ to keep pace with acquired efficiency and profitabihty. It could be feasible for both Austraha and Bangladesh to emphasize the clothing industry more given the ample potential to enhance efficiency, productivity and export and the need for a better performing sub sector beyond 2005