Muhammad Irfan Javaid Attari, Matloub Hussain and Attiya Y. Javid
This paper is a direct extension of the work by Hussain et al. (2012). They have investigated a long-term relationship between climatic change and economic growth in case of…
Abstract
Purpose
This paper is a direct extension of the work by Hussain et al. (2012). They have investigated a long-term relationship between climatic change and economic growth in case of Pakistan. Agricultural sector plays an important role in economic field, whereas industrial sector is the main source of carbon dioxide (CO2) emission. Therefore, this study aims to replace economic growth variable with industrial growth in case of Pakistan.
Design/methodology/approach
Investigation is made on the basis of the environmental Kuznets curve by using the time series data during the period 1971-2009. The per capital carbon dioxide (CO2) emission is used as an environmental indicator and per capita industrial income as the economic indicator. Different econometric tools including augmented Dickey–Fuller, autoregressive distributed lag and Granger-causality test are used to verify this relationship.
Findings
The empirical findings will help the policy-makers of Pakistan in developing new standards and monitoring networks for reducing CO2 emission. It is essential to extend the current research work at provincial and different sectors levels in order to have clear understanding about the impact of current emission rate.
Originality/value
This study replaces economic growth variable with industrial growth in case of Pakistan because the industrial sector is the main source of carbon dioxide (CO2) emission. This study is to investigate a long-term relationship between climatic change and industrial growth in case of Pakistan.
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Shahab Udin, Muhammad Arshad Khan and Attiya Yasmin Javid
The purpose of this paper is to explore the role of corporate governance proxies by ownership structure on the likelihood of firms’ financial distress for a sample of 146…
Abstract
Purpose
The purpose of this paper is to explore the role of corporate governance proxies by ownership structure on the likelihood of firms’ financial distress for a sample of 146 Pakistani public-limited companies listed at the Karachi Stock Exchange over the period of 2003-2012.
Design/methodology/approach
The dynamic generalized method of moments (GMM) estimator and panel logistic regression (PLR) are used to determine the impact of corporate governance on the financial distress. The ownership structure is used as a determinant of corporate governance, while the Altman Z-score is utilized as an indicator of financial distress, as it measures financial distress inversely. The smaller the values of the Z-score, the higher will be the risk of financial distress.
Findings
The authors find insignificant impact of ownership structure on firms’ likelihood of financial distress based on the dynamic GMM method. However, the PLR results indicate that foreign shareholdings have a significant negative association with firms’ likelihood of financial distress, in the case of Pakistan. An evidence of a negative and insignificant relationship between institutional ownership and financial distress was observed, which indicates the passive role of institutional investors in Pakistan. The results also reveal a positive and significant relationship between insider’s ownership and likelihood of financial distress. This finding is consistent with the entrenchment hypothesis which predicts that insiders are more aligned with their self-interest than outside shareholders’ interest when their shareholding increases in the business. Furthermore, the results also reveal insignificant association between government shareholdings and the probability of financial distress. The reason could be the social welfare objective of the government entities rather than profit maximization.
Practical implications
The findings of this study provide more insight to corporate managers and investors about the association between the quality of corporate governance and the degree of financial distress, with respect to Pakistani firms. Furthermore, this study contributes to the existing literature by adding new evidence from developing countries like Pakistan which are helpful for regulatory bodies and policymakers in the formulation of long-term corporate governance strategies to manage the financial distress. It is well established that strengthening the quality of corporate governance practices enhances the efficiency of capital markets and reduces the probability of financial distress.
Originality/value
The study extends the body of existing literature on corporate governance and the likelihood of financial distress with reference to Pakistan. The results suggest that policymakers may pay special attention to the quality of corporate governance, specifically ownership structure, while predicting corporate financial distress.
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Muhammad Irfan Javaid and Attiya Yasmin Javid
The purpose of this paper is to determine whether the original and the revised versions of the existing prediction models are the best tools for assessing the going concern…
Abstract
Purpose
The purpose of this paper is to determine whether the original and the revised versions of the existing prediction models are the best tools for assessing the going concern assumption of a firm in the creditor-oriented regime.
Design/methodology/approach
The analysis begins from estimating the classification accuracy of the original versions of the bankruptcy, going concern and liquidation prediction models. At the second step, the revised versions of the aforesaid existing prediction models are developed. At the third step, the accounting-based going concern prediction model is proposed by using multiple discriminant analysis for the creditor-oriented regime. The sample contains the financial ratios of manufacturing firms for the period 1997–2014.
Findings
The finding indicates that the five discriminatory variables, which belong to “income statement” and “statement of financial position,” of the proposed model are not only useful for evaluating the going concern assumption of a firm, but also give aid for evaluating the financial fraud risk of a firm as compared to the original and revised versions of the prediction models that are developed for the debtor-oriented regime.
Research limitations/implications
The external validity of the proposed prediction model can be tested on the large data sets of the countries where the liquidation provisions are a part of their local corporate law.
Practical implications
The proposed accounting prediction model will be helpful for the internal and external auditors in order to determine the going concern assumption at planning, performing and evaluation stages.
Originality/value
The proposed accounting-based going concern prediction model is based on liquidated firms.
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Khurram Ejaz Chandia, Muhammad Badar Iqbal and Waseem Bahadur
This study aims to analyze the imbalances in the public finance structure of Pakistan’s economy and highlight the need for comprehensive reforms. Specifically, it aims to…
Abstract
Purpose
This study aims to analyze the imbalances in the public finance structure of Pakistan’s economy and highlight the need for comprehensive reforms. Specifically, it aims to contribute to the empirical literature by analyzing the relationship between fiscal vulnerability, financial stress and macroeconomic policies in Pakistan’s economy between 1971 and 2020.
Design/methodology/approach
The study develops an index of fiscal vulnerability, an index of financial stress and an index of macroeconomic policies. The fiscal vulnerability index is based on the patterns of fiscal indicators resulting from past trends of the selected variables in Pakistan’s economy. The financial stress in Pakistan is caused from the financial disorders that are acknowledged in the composite index, which is based on variables with the potential to indicate periods of stress stemming from the foreign exchange market, the securities market and the monetary policy components. The macroeconomic policies index is developed to analyze the mechanism through which fiscal vulnerability and financial stress have influenced macroeconomic policies in Pakistan. The causal association between fiscal vulnerability, financial stress and macroeconomic policies is analyzed using the auto-regressive distributive lags approach.
Findings
There exists a long-run relationship between the three indices, and a bi-directional causality between fiscal vulnerability and macroeconomic policies.
Originality/value
This study contributes to the development of a fiscal monitoring mechanism, which has the basic purpose of analyzing the refinancing risk of public liabilities. Moreover, it focuses on fiscal vulnerability from a macroeconomic perspective. The study tries to develop a framework to assess fiscal vulnerability in light of “The Risk Octagon” theory, which focuses on three risk components: fiscal variables, macroeconomic-disruption-associated shocks and non-fiscal country-specific variables. The initial contribution of this work to the literature is to develop a framework (a fiscal vulnerability index, financial stress index and macroeconomic policies index) for effective and result-oriented macro-fiscal surveillance. Moreover, empirical literature emphasized and advised developing countries to develop their own capacity mechanisms to assess their fiscal vulnerability in light of the IMF guidelines regarding vulnerability assessments. This study thus attempts to fulfill the said gap identified in literature.
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Muhammad Sohail and Syed Tehseen Abbas
This study aims to analyze the Prandtl fluid flow in the presence of better mass diffusion and heat conduction models. By taking into account a linearly bidirectional stretchable…
Abstract
Purpose
This study aims to analyze the Prandtl fluid flow in the presence of better mass diffusion and heat conduction models. By taking into account a linearly bidirectional stretchable sheet, flow is produced. Heat generation effect, thermal radiation, variable thermal conductivity, variable diffusion coefficient and Cattaneo–Christov double diffusion models are used to evaluate thermal and concentration diffusions.
Design/methodology/approach
The governing partial differential equations (PDEs) have been made simpler using a boundary layer method. Strong nonlinear ordinary differential equations (ODEs) relate to appropriate non-dimensional similarity variables. The optimal homotopy analysis technique is used to develop solution.
Findings
Graphs analyze the impact of many relevant factors on temperature and concentration. The physical parameters, such as mass and heat transfer rates at the wall and surface drag coefficients, are also displayed and explained.
Originality/value
The reported work discusses the contribution of generalized flux models to note their impact on heat and mass transport.