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Article
Publication date: 16 October 2019

Tarek Eldomiaty, Yasmeen Saeed, Rasha Hammam and Salma AboulSoud

This paper aims to examine the effect of both inflation rate and interest rate on stock prices using quarterly data on non-financial firms listed in DJIA30 and NASDAQ100 for the…

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Abstract

Purpose

This paper aims to examine the effect of both inflation rate and interest rate on stock prices using quarterly data on non-financial firms listed in DJIA30 and NASDAQ100 for the period 1999-2016. The stock duration model is used to measure the sensitivity in variations in inflation rates and interest rates on stock prices.

Design/methodology/approach

The authors use standard statistical tools that include Johansen cointegration test, linearity, normality tests, cointegration regression, Granger causality and vector error correction model.

Findings

The results of panel Johansen cointegration analysis show that cointegration exists between the stock prices, the changes in stock prices due to inflation rates and the changes in stock prices due to real interest rates. The results of cointegration regression show that inflation rates are negatively associated with stock prices, the real interest rates and stock prices are positively associated, changes in real interest rates and inflation rates Granger cause significant changes in stock prices, significant speed of adjustment to long run equilibrium between observed stock prices and real interest rates and significant speed of adjustment to long run equilibrium between changes in stock prices due to real interest rates and changes in inflation rates.

Originality/value

This paper contributes to the empirical literature in three ways. The paper examines the effects of inflation and interest rates on stock prices differently from other related studies by separating inflation from real interest rates. The paper examines the causality between stock prices, interest and inflation rates. This paper offers significant updated validity to extended literature that a negative association exists between stock prices and inflation rates. This validity can be considered as an existence a theory of stock prices, inflation rates and interest rates.

Details

Journal of Economics, Finance and Administrative Science, vol. 25 no. 49
Type: Research Article
ISSN: 2077-1886

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Article
Publication date: 16 April 2020

Tarek Eldomiaty, Rasha Hammam and Rawan El Bakry

Financial inclusion is an approach for mobilizing saving and facilitating investments that help promote economic development and pave the way for sustainable development. This…

1133

Abstract

Purpose

Financial inclusion is an approach for mobilizing saving and facilitating investments that help promote economic development and pave the way for sustainable development. This paper aims to examine the impact of world governance indicators (WGIs) on the improvement of financial inclusion across world economies.

Design/methodology/approach

This paper uses the global database of financial inclusion indicators (global findex) for the years 2011, 2014 and 2017. The WGIs are used as proxies for the effects of governmental institutional arrangements. Using panel data analysis, a fixed generalized linear model is estimated for four common financial indicators; namely, borrowed from a financial institution, saved at a financial institution, credit card and debit card ownership.

Findings

The empirical results reveal that control of corruption, government effectiveness, political stability and voice and accountability are the significant WGIs that influence financial inclusion significantly.

Originality/value

This paper contributes to the literature in two ways. First, this paper offers validating the results previously reported in related studies. Second, this paper offers robust estimates of the effects of the institutional WGIs on the promotion of financial inclusion.

Details

International Journal of Development Issues, vol. 19 no. 2
Type: Research Article
ISSN: 1446-8956

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Article
Publication date: 10 February 2021

Maha Elhini and Rasha Hammam

This paper aims to examine the impact of the daily growth rate of COVID-19 cases in the USA (COVIDg), the Federal Fund Rate (FFR) and the trade-weighted US dollar index (USDX) on…

1628

Abstract

Purpose

This paper aims to examine the impact of the daily growth rate of COVID-19 cases in the USA (COVIDg), the Federal Fund Rate (FFR) and the trade-weighted US dollar index (USDX) on S&P500 index daily returns and its 11 constituent sectors’ indices for the time period between January 22, 2020, until June 30, 2020.

Design/methodology/approach

The study uses the multivariate generalized autoregressive conditional heteroscedasticity (MGARCH) model to gauge the impacts over the whole period of study, as well as over two sub-periods; first, January 22, 2020, until March 30, 2020, reflecting uncertainty in the US markets and second, from April 1, 2020, until June 30, 2020, reflecting the lockdown.

Findings

Results of the MGARCH model reveal a negative and significant relation between COVIDg and S&P500 index daily returns over the first sub-period and the whole study period in the following sectors, namely, communications, consumer discretionary, consumer staples, health, technology and materials. Yet, COVIDg showed a positive and significant relation with S&P500 index daily returns during the second time period in the following sectors, namely, communication, consumer discretionary, financial, industrial, information technology (IT) and utilities. Besides, USDX showed a negative significant effect on S&P500 index daily returns and on the daily return on each of its 11 constituent sectors over the second sub-period and the whole period. Further, FFR showed a significant effect only in the second sub-period, specifically, a negative effect on the daily return of the financial sector and a positive effect on the daily return of the technology sector index. Nevertheless, FFR had a positive significant effect on the daily return of the utilities sector index for the whole period under study.

Research limitations/implications

The impact of the crisis on the S&P500 index can be assessed only with some limitations owing to available global data and the limited time frame of the lock-down.

Practical implications

The study proposes supporting a smooth, functioning and resilient financial system; increasing fiscal measures by the US Government to increase liquidity on constraints; measures by The Federal Reserve to alleviate US dollar funding shortages; support market integrity; ensure continuous transparency and sharing of information; support the health sector, as well as consumer-based sectors that faced demand shocks and facilitate investments in the technology sector.

Originality/value

The originality of this paper lies in the examination of the impact of the novel COVID-19 pandemic on each of the 11 sectors constituting the S&P500 index separately, reflecting how the main economic sectors formulating the US economy reacted to the shock during the peak time of the pandemic to observe a full picture of the economic consequences amid the pandemic.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 14 no. 1
Type: Research Article
ISSN: 1754-4408

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Book part
Publication date: 4 July 2019

Tarek Eldomiaty, Rasha Hammam, Yasmeen Said and Alaa Safwat

This chapter offers an empirical examination of the impact of World Governance indicators (WGIs) on stock market development. The understanding is based on the premise of…

Abstract

This chapter offers an empirical examination of the impact of World Governance indicators (WGIs) on stock market development. The understanding is based on the premise of institutional economics that strong institutional governance, in terms of laws and regulations, results in positive developments in financial institutions.

The data which covers the years 1996–2016, include all world countries where a stock market operates. The authors use standard statistical tools that include Johansen co-integration test, linearity, normality tests, and regression analysis, together with discriminant analysis as a robustness check.

The empirical findings show that (a) a negative association exists between Voice and Accountability and stock market development, (b) a positive association exists between each of Political Stability, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption, and stock market development for most World’s regions stock markets, (c) both Voice and Accountability and Political Stability indicators are the major influential indicators for the stock market development across world stock markets.

This chapter offers quantitative evidence about the benefits of strong institutional governance to stock market development. In addition, the chapter offers significant guidelines to policymakers regarding the institutional factors that can be enhanced to promote stock market development.

Available. Content available
Book part
Publication date: 4 July 2019

Abstract

Details

Contemporary Issues in Behavioral Finance
Type: Book
ISBN: 978-1-78769-881-9

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Article
Publication date: 23 September 2024

Souty Adel Nassef Beskhyroun and Mohamed Abdel-Aziz

This paper aims to assess the efficiency of emulsified essential oils in glycerol as eco-friendly antimicrobial and plasticized agents added to the biopolymer of gelatin for…

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Abstract

Purpose

This paper aims to assess the efficiency of emulsified essential oils in glycerol as eco-friendly antimicrobial and plasticized agents added to the biopolymer of gelatin for lining historical oil paintings on canvases.

Design/methodology/approach

Cedar oil, cinnamon oil and their mixtures were emulsified in glycerol and incorporated into gelatin adhesive as green biocides and plasticizers. Physical, biological, chemical and mechanical tests were conducted on experimental mock-ups to assess the gelatin-based adhesive formulations for the reinforcement of canvas supports. Scanning electron microscope, colorimetric measurements, antimicrobial activity test, attenuated total reflection-Fourier transform infrared spectroscopy, tensile strength and elongation tests were carried out on the mock-ups before and after the artificial aging.

Findings

The formulations of gelatin-based adhesive with cinnamon and cinnamon-cedar mixture emulsified in glycerol proved their efficiency on the antimicrobial activity test, chemically delaying the decomposition of gelatin and accordingly providing compatible mechanical properties. Gelatin-based adhesive with emulsified cinnamon oil showed a slight yellowing that was quite improved with the mixture of the cinnamon-cedar-based adhesive formulation.

Originality/value

This study promotes a green approach to lining historical oil paintings by developing green formulations from bio-based origins that minimize the shrinkage and microbial infection of gelatin for lining paintings.

Details

Pigment & Resin Technology, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0369-9420

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