The Relationship Between Government Policy and Financial Performance： A Study on the SMEs in Iraq

The study examined the relationship between government policies and financial performance in small and medium enterprises （SMEs） in Iraq. The study aimed at establishing the relationship between government policies and financial performance of SMEs. In the Republic of Iraq, it is estimated that 99% of the business entities are SMEs. They also contribute to GDP and provide employment. Notwithstanding the recognition of the important roles SMEs play in Iraq, their development is largely constrained by a number of factors, such as the existence of laws, regulations, and rules that impede the development of the sector. The study provided some relevant recommendations to policy makers, development agencies, entrepreneurs, and SME managers to ascertain the appropriate strategy to improve the SME sector in Iraq.     

An Empirical Examination of the Pricing of Seasoned Equity Offerings: A Test of the Signaling Hypothesis

This paper tests the predictions made by Signaling Theory against the competing Price–Irrelevance Hypothesis (Eckbo and Masulis, 1992). Signaling Theory suggests that the issue price of a security provides a signal of quality of the issuing firm. In contrast, the Price–Irrelevance Hypothesis suggests that equity pricing does not possess information content. This paper investigates the pricing of seasoned equity offerings by examining the role of firm quality and relative firm valuation on issue price discounts. Additionally, this paper investigates the relationship between the issue price discount and the market reaction at the issuance of seasoned equity offerings. The results indicate that firm quality does not have a significant impact on the degree of price discounting by the issuing firm. Relative firm market valuation does appear to be a determinant of the magnitude of discounting in setting the issue price. This paper also provides evidence that seasoned equity offerings firms that provide a lower issue-price discount experience a lower stock-price decline following the issuance as compared to firms offering a higher price discount.     

Spillover Effects among European,the US and Moroccan Stock Markets before and after the Global Financial Crisis

ABSTRACT

This paper assesses return and volatility spillovers among stock markets in Morocco, the US, UK, France and Germany represented respectively by MASI, S&P 500, FTSE 100, CAC 40 and DAX 30 indices, both before and after the global financial crisis (GFC) of 2008. The daily frequency data cover the period from January 2nd, 2002 to June 30th, 2016. Using the Diebold and Yilmaz approach, the results show varying financial connectedness between the Moroccan and the above mentioned developed stock markets. In fact, the significant increase of spillover index during the post-financial crisis period demonstrates that the US and European stock markets were the most affected. On the other hand, despite a relative increase of spillover effects coming from the US and German equity markets, our results show decline in the total net spillovers experienced by the Moroccan market after the recent financial crisis. These findings may provide some useful information to support decision-making and trading strategies for international investors.     

Effectiveness of Export Support Programs: Impact on the Relational Capital and International Performance of Early Internationalizing Small Businesses

This article evaluates the impact of public export support programs on the internationalization of early internationalizing small businesses. We build and test a conceptual model of the link between export support services and early internationalizing firms’ relational capital and international performance in terms of both economic international performance and the number of foreign markets in which they are present. The results show that financial support is effective in enhancing firm performance only in terms of the number of foreign markets but not in terms of economic performance, that informational support is effective through its influence on relational capital, and that operational support is not. Our findings contrast with those of previous studies on firms that internationalize through stages and suggest that new export support services adapted to early internationalizing firms are needed.     

The Impact of Foreign Agricultural Aid and Total Foreign Aid on Agricultural Output in African Countries: New Evidence from Panel Data Analysis

Official Development Assistance may play an important role in increasing the resources to finance the agriculture sector and improve agricultural outcomes in African countries. Although this is a relevant issue, very few studies have investigated the link between foreign agricultural aid and national agricultural output. Using advanced econometrics techniques, this paper examines the impact of foreign agricultural aid and foreign aid on agriculture output in the panel data set of 29 African countries over the period of 1975–2013. In particular, we employed two estimation methods: Augmented Mean Group and Common Correlated Effects‐2SLS. The first method accounts for heterogeneous slope coefficients across group members and cross‐sectional dependency among variables, whereas the second method accounts for endogenous regressors. Our main findings indicate a small and positive impact of foreign agricultural aid and total foreign aid on agricultural output for low‐ and middle‐income countries. Furthermore, the Pairwise Dumitrescu‐Hurlin Panel Causality test shows evidence of a bidirectional causal relationship between agricultural aid and agricultural output for the full sample, noting that the result changes at the different group income level. Based on the empirical results, recommendations for future policy are given.     

Making Globalization Inclusive: Job Creation and Wage Inequality in Developing Economies

Open Economies Review -     

Searching for value relevance of book value and earnings: a case of premium versus discount firms

We examine the premium/discount firm characteristic that fundamentally affects the value relevance of two key accounting line items, earnings and book values. We argue that from the perspective of both the residual income and option-style valuation models, the relative valuation roles of earnings and book values differ fundamentally between firms that trade at a premium vis-à-vis discount to book value. We find that book values play a significantly more important role in equity valuation than earnings when firms trade at a discount. We also find that other known influential conditions, such as the sign of earnings (Collins et al. in Acc Rev 74(1):29–61, 1999) or the relative levels of earnings and book value (Burgstahler and Dichev in Acc Rev 72(2):187–215, 1997), become inconsequential when the premium/discount condition of the firm is controlled for. The discovered relationships between the relative valuation roles of book values and earnings and the discount/premium characteristics of the firm are robust to the effect of time, information environment and the industry of the firm.     

Ending Food Subsidies: Nutritional, Welfare, and Budgetary Effects

Governments faced with growing budget deficits are cutting manysocial expenditures, including costly food subsidy programsthat have provided benefits to the rich and poor alike. Becausethe poor spend a larger share of their income on food than dothe rich, however, such cuts usually have negative distributional,welfare and nutritional effects. This article discusses themethodological issues in estimating the effects of price andtax reforms in developing countries. I apply a model that Deaton(1988) developed to estimate price elasticities from cross-sectiondata, the only reliable and detailed data available in mostdeveloping countries. I use measures of both real income andnutrition to evaluate the effects of changes in the Moroccanfood subsidy program. The analysis suggests that subsidies oninferior foods not consumed by the wealthy would reduce thewelfare costs to the poor and limit the budgetary expendituresrequired.     

Special focus: The Bangladesh sorghum experiment

In 1978, an experiment was undertaken in Bangladesh to test the possibility of targeting part of the country's public food system toward the poorer and more malnourished population groups through the introduction of a lower-status, but nutritionally valuable food. Sorghum, as a representative inexpensive coarse grain, was selected and introduced into a set of ration shops in both urban and rural areas. Given the low, or negative, income elasticity of demand for sorghum among the middle class, offtakes in the urban test were low. However, in the rural areas, offtakes were substantial, particularly among the lower-income groups, reaching almost 70% in one of the two districts studied. Although this would suggest that the programme has considerable potential in affecting malnutrition and, to a lesser extent, the distribution of income, other information collected on the rural ration system as a whole indicates that, unless the larger system is reoriented, this potential has little chance of being realized.